Distribution Finance Capital Holdings plc (LON:DFCH), a specialist bank providing working capital solutions to dealers and manufacturers across the UK, has announced its results for the six months ended 30 June 2021 and a trading update.
The Group confirms the following financial highlights, and has provided its full report for the period within this announcement:-
| 30 June 2021 6-month | 30 June 2020 6-month | 31 December 2020 12-month | |
| Financial Highlights | |||
| Gross revenues (£m) | 6.1 | 7.4 | 11.5 |
| Loss after taxation (£m) | 2.3 | 7.2 | 13.6 |
| Loan Book (£m) | 166.8 | 165.9 | 113.3 |
| Net assets (£m) | 87.3 | 57.0 | 50.9 |
| Customer deposits (£m) | 160.0 | – | 146.0 |
| Regulatory capital (£m) | 84.0 | n/a | 47.8 |
| Common Equity Tier 1 capital ratio | 57.1% | n/a | 50.1% |
| Gross yield | 7.9% | 7.6% | 7.7% |
| Net interest margin | 6.8% | 2.0% | 1.5% |
| Cost of risk | 0.21% | 0.95% | 0.86% |
| Impairment loss coverage on loans to customers | 0.80% | 1.31% | 1.14% |
| Cost income ratio | 142% | 426% | 641% |
| Key Performance Indicators | |||
| Loans advanced to customers (£m) | 295 | 115 | 253 |
| Number of dealer customers | 706 | 779 | 623 |
| Number of manufacturer partners | 74 | 77 | 65 |
| Total credit available to dealers (£m) | 467 | 364 | 358 |
· In excess of 6% net interest margin now flowing through the Group’s financial performance from 1 January 2021, transforming the Group’s financials
· Loss after tax of £2.3m, a reduction of £4.9m or 68% (June 2020: £7.2m)
· Record new loan origination of c£300m during the period with a strong Q1 performance
· Loan book exceeded £166m at 30 June 2021, up 47% on year-end, despite supply chain headwinds
· Loan book arrears of 0.2%, down from 1.5% in June 2020
· Over 150 new dealers and 10 new manufacturers added in the eight months ending 31 August 2021
· Loan facilities provided to dealers increased 28% to £467m (June 2020: £364m)
· £40m placing concluded in February 2021 gives the Group capacity to grow its loan book to approximately £550m
Post period end highlights and trading update
· Loan book increased to £194m as at 20 September 2021 with growth now normalising as the Group enters the traditional dealer restocking period
· Successfully launched full online in-life account management for retail depositors with feefo customer satisfaction of 4.5 since this launch
· Raised over £120m of retail deposits at an average rate of 1.3% during August and September 2021 to support expected loan book growth
· Retail deposits now exceed £280m and 7,200 accounts
· Evaluating Tier 2 capital to support the Group’s future loan book growth
Carl D’Ammassa, Chief Executive, commented: “We are pleased that momentum has started to build in growing our loan book. Loan originations are at record levels which gives us confidence in the strategy and growth potential laid out by the Group, but also the depth of relationship we have with our customers. Despite the widely publicised impact of the pandemic on manufacturers and supply chains, the current pipeline of product scheduled to be delivered to dealers over the coming months underpins the Board’s expectation that the Group will achieve run-rate profitability on a monthly basis during Q4 2021.
I’m also delighted that we now have a fully online service available to our retail depositors which give us a scalable platform to raise further liquidity to support our lending growth ambitions.”
