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Vector Capital pleased but cautious amid "year of consolidation"

18th Jul 2023 14:34

(Alliance News) - Vector Capital PLC on Tuesday said it had performed in line with expectations in its first half year, and still plans to prioritise consolidating its position in a difficult market.

The London-based commercial lending group said its loan book was GBP49.0 million at June 30, down from GBP53.2 million at December 31. Vector said this reflected planned redemptions worth GBP11.8 million in total and new advanced loans worth GBP7.6 million. The average loan to value decreased to 58.3% from 59.0%.

Overall, the company said it was trading in line with market expectations during the first six months of 2023.

Vector said that as stated in its 2022 results, "2023 is a year of consolidation where the company plans to strengthen its position in a lending market which continues to be impacted by increasing interest rates, soft property prices and persistent inflation."

The company said it was "very well placed to withstand these challenging market conditions" due to its capital and reserves of GBP25.1 million or 55.4 pence per share at December 31, and competitively priced borrowings worth GBP4 million advanced from parent company Vector Holdings Ltd.

"This financial stability is reinforced by the company's excellent relationships with its introducer broker network and the continued appetite to provide funding from its wholesale and specialist lender contacts," Vector Capital added.

Vector said it "remains cautious" regarding new opportunities due to the uncertain market conditions, but continues to have a strong pipeline. It also has "substantial unutilised bank facilities" the capacity to drawdown GBP2.5 million towards loans secured by second charges, allowing more flexibility to expand its loan book into higher-margin agreements.

"We are very pleased with the group's trading performance in the first six months of the year," said Chief Executive Officer Agam Jain. "Our strong capital base differentiates us from many of our competitors, while the extension and broadening of our debt facilities provides valuable flexibility in the way that we can assess new lending opportunities."

"High interest rates are now likely to be with us for a continued period, during which time we can seek to maximise return on our own capital and, on a selective basis, borrowed funds from our debt providers."

Shares in Vector Capital were up 2.2% at 30.67p in London on Tuesday afternoon.

By Emma Curzon, Alliance News reporter

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