23rd Mar 2020 16:24
(Alliance News) - Orchard Funding Group PLC on Monday posted higher interim profit as its overall volume of lending improved.
In the six months January 31 the finance company, which focuses on the insurance premium finance, recorded pretax profit GBP1.0 million, slightly below the GBP1.1 million reported in the same period the year before.
Revenue was up year on year to GBP2.9 million from GBP2.8 million.
Orchard's loan book ended the period at GBP34.0 million, up from GBP31.6 million at the same point the year before and up from GBP32.1 million six months prior.
The company's average gross rate on loans made in the first half was 6.22%, unchanged on the year before.
Chief Executive Ravi Takhar said: "Our lending and revenue has increased and in line with expectations our costs have increased due to the bank licence application process. To increase our lending we have entered adjacent low-risk credit markets, whilst still focusing on our key insurance premium finance market and are looking forward to continuing our lending growth and progressing our bank licence application."
He added: "We are currently living through unprecedented times. The implications of restricting individual movements to consumers, businesses, borrowing, lending and liquidity are still unclear. We have the benefit of a short-term lending book, with a quick contractual pay-back and which in the main finances essential items. As we found in the Global Financial Crisis, in times of stress a shorter-term lending book provides some comfort over a longer-term book."
Orchard still believes there remains "considerable scope" to pursue its strategic objectives. This includes submitting its banking licence application, which is expected to be submitted before the end of April.
Orchard declared an interim dividend of 1 pence, unchanged on the year before.
Shares in Orchard Funding were untraded in London on Monday but last closed at 77.50 pence each.
By Paul McGowan; [email protected]
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