2nd Mar 2016 10:25
LONDON (Alliance News) - Non-Standard Finance PLC, which has expanded into the subprime lending market through acquisitions, on Wednesday said it aims to secure additional debt funding to grow the loan book of the Loansathome4u home credit business from S&U PLC in summer 2015.
Loansathome4u, which was acquired for an enterprise value of GBP82.5 million in cash, will look to add more agents to its team, enabling the lender to offer more door-to-door loans and attract more customers, Non-Standard Finance said.
Traditional door-to-door lending at Loansathome4u will be supplemented with the development of online customer recruitment, Non-Standard Finance said. That will come as part of a broader drive to introduce technology to the business, particularly making use of mobile, to designed to improve service, assist with compliance, and encourage efficiency.
"Since acquisition, the business has experienced a strong increase in agent and customer numbers. This is expected to continue during the remainder of 2016," Non-Standard Finance said, adding that it will seek bolt-on acquisitions in the home credit market amid wider consolidation of the sector.
Non-Standard Finance's acquisition of Loansathome4u was followed by a deal to buy Everyday Loans, which provides unsecured loans to UK consumers from a network of 36 branches, for an enterprise value of GBP235.0 million from AIM-listed Secure Trust Bank PLC. The deal is expected to complete by the end of April, subject to regulatory approval.
"Our plans include growing the branch network, expanding the customer base and implementing operational efficiencies to improve customer conversion rates. However, these will not cause any disruption to the business and we expect to continue growing the loan book and customer base so as to double the size of the business in four to five years," Non-Standard Finance said.
Overall, Chairman John van Kuffeler, the former chief executive and then chairman of FTSE 100 subprime lender Provident Financial PLC, said that Non-Standard Finance has performed in line with management expectations. He is confident of growing the loan books of the group's operating businesses by 20% in 2016.
"As we continue to invest in the growth of our businesses in 2016 we will focus on maintaining our current revenue yield and operating margins," the chairman said.
In addition, Non-Standard Finance intends to introduce dividend payments during the second half of 2016, subject to financial perfomance.
The updates came as Non-Standard Finance, which joined the main market of the London Stock Exchange in February 2015, reported a loss of GBP13.1 million from its incorporation in July 2014 to December 31, 2015. Revenue amounted to GBP9.2 million.
The loss is "not indicative" of underlying performance, Non-Standard Finance said, as the results included costs associated with Non-Standard Finance's initial public offering, acquisitions, and its transition from cash shell to operating group.
Shares in Non-Standard Finance were up 0.3% at 72.97 pence on Wednesday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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