2nd Jul 2021 09:55
(Alliance News) - Distribution Finance Capital Holdings PLC on Friday reaffirmed its expectations to achieve monthly run-rate profitability during the fourth quarter.
The Manchester-based bank providing personal savings products and working capital to dealers and manufacturers said it has been pleased with its progress in the second quarter of 2021.
New loan origination exceeded GBP295 million during the six-month period to June, sharply higher from GBP115 million in the same period a year before.
"The group's progress in converting its pipeline and the on-boarding of new dealers has exceeded expectations," DF Capital said.
During the first 6 months of 2021, DF Capital onboarded more than 80 new dealers. At June 30, the company had in excess of 700 dealer relationships with aggregate dealer loan facilities totalling about GBP465 million, up from GBP364 million at the same point the year before.
"Dealers across most sectors are reporting strong demand for new and used assets, particularly amongst those sectors focused on the leisure, recreational activities and home delivery markets. This pent-up demand, driven by the impact of the global pandemic and on-going foreign travel restrictions, has led to loan repayments exceeding expectations. As a result, the group's stock turn has accelerated from about 150 to about 110 days in line with the speed of product sales," DF Capital continued.
DF Capital's loan book ended June at GBP166 million, unchanged on the year before.
The company added: "Whilst the strong new loan origination, accelerated stock turn and associated loan repayments are expected to continue through the third quarter, which impacts near-term gross revenue, the group expects growth to normalise through the second half of the year and remains confident about inventory replenishment beyond the summer months."
As a result, DF Capital re-affirmed its expectation to achieve monthly run-rate profitability during the fourth quarter.
"The momentum we saw in the first quarter has continued at pace. We continue to originate significant volumes of new lending to support the strength of demand our customers are seeing on the back of the staycation and UK leisure boom," Chief Executive Carl D'Ammassa said.
Shares in DF Capital were untraded in London on Friday, last quoted at 59.00 pence each.
By Paul McGowan; [email protected]
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