28th Sep 2021 10:48
(Alliance News) - Non-Standard Finance PLC on Tuesday reported a "pleasing" first half, with its loss narrowing significantly from a year earlier as it saw impairment costs fall dramatically.
"The group delivered a pleasing first half performance with both branch-based lending and home credit ahead of budget and delivering positive pre-tax profit before exceptional items. Despite not having issued any loans in the period, the Guarantor Loans Division also delivered an improved performance although remained loss-making at the pre-tax level," Non-Standard Finance said.
In the six months to June 30, the subprime lender reported a pretax loss of GBP7.5 million, sharply narrowed from GBP102.7 million a year before.
The company's impairment charge dropped significantly to GBP6.4 million from GBP39.2 million
Revenue dropped 26% to GBP67.8 million from GBP91.3 million. The loan book ended June at GBP229.5 million, down sharply from GBP300.0 million at the same point a year before.
Chief Executive Jono Gillespie said: "The group delivered a strong operational performance in the first half and both branch-based lending and home credit enjoyed a much improved financial result versus the prior year that was severely impacted by the pandemic."
"After a great deal of work over the past year and despite the challenges presented by the pandemic and a complex regulatory landscape, we are determined to continue to deliver on our original purpose. We are progressing our discussions with the Financial Conduct Authority and hope to reach a conclusion soon. While this work is ongoing, the group has concluded that an additional exceptional provision of GBP1.9 million is required to cover expected costs of redress due to customers that may have suffered harm. The methodology of this estimate remains unchanged, but the amount has increased due to the continued accrual of estimated penalty interest," Gillespie continued.
The review was put in place in August 2020 after the UK regulator raised "a number of concerns" regarding several aspects of the operating procedures at the company's Guarantor Loans division - which has now been shut down.
Gillespie noted the firm will look to go ahead with its planned GBP80 million capital raise once it has received more clarity around its redress programme.
Shares in Non-Standard Finance were 1.0% lower in London on Tuesday morning at 3.62 pence each.
By Paul McGowan; [email protected]
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