16th Jan 2020 13:58
(Alliance News) - Non-Standard Finance PLC on Thursday said trading in the last few months of 2019 was as expected and its annual results are set to align with current consensus.
Shares in Non-Standard Finance were up 15% at 27.10 pence in London on Thursday afternoon.
In addition, the sub-prime lender said it is making "good progress" in finalising a new six-year securitisation facility of between GBP150 million and GBP200 million. This is intended to help Non-Standard Finance in funding future loan book growth.
Non-Standard Finance expects to complete final documentation for the facility "shortly", having already signed a term sheet. The loan facility is expected to "provide a meaningful reduction in funding costs" when compared to the company's existing long-term funding arrangements maturing 2023.
As at December 31, Non-Standard Finance had GBP14.2 million of cash at bank, up from GBP13.9 million the year before. Its gross borrowings had also risen to GBP323.2 million from GBP272.8 million.
Non-Standard Finance said its medium-term targets for loan book growth and impairment, when given as a percentage of revenue, have not changed.
Its Everyday Loans business net loan book before fair value adjustments totalled GBP218.3 million at the end of December, rising 17% from GBP186.2 million the year before. Everyday Loans is part of the company's branch-based lending business.
Non-Standard Finance said: "We continue to believe that consumer demand for branch-based lending will support a network of over 100 branches in the medium-term and so plan to continue to deploy our successful formula of splitting a limited number of larger branches in order to create additional capacity for future growth."
The company opted to consolidate all of its guarantor loans activities into a single location in October. Its branch-based lending net loan book was up 29% to GBP107.4 million at the end of 2019 from GBP83.1 million the year prior and the number of customers was up 30% at 32,600 versus 25,100 year-on-year.
As a percentage of normalised revenue, the rate of impairment was 23% on December 31, up from 20% the year before but lower than in the first half of 2019 and within the 22% to 24% medium-term target set by Non-Standard Finance.
Loans at Home did better than expected in November and December, the peak lending period.
The home credit net loan book, which includes Loans at Home, finished 2019 at GBP39.9 million, down from GBP41.0 million. Impairment at a percent of normalised revenue was 27%, down from 33% year-on-year and below the previously guided figure of 30% to 33%. The number of customers dipped 1.5% to 92,400 from 93,800.
"We now expect a period of relative stability in home credit and more normalised rates of loan book growth, in line with our medium-term targets," said Non-Standard Finance.
By Anna Farley; [email protected]
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