Vector Capital plc (LON:VCAP), the commercial lending group that offers secured loans to property developers and investors in England & Wales, has provided an update on trading for the year ended 31 December 2022.
The Group has delivered a strong operational performance, despite the challenging market conditions in the UK, where certain borrowers have been adversely affected by delays in completions, supply chain delays, interest rate increases, inflation, and a general softening of residential property values. Arising from the Group’s strong loan book performance described below, and subject to completion of the 2022 audit, revenue for the year is expected to be in line with market expectations at not less than £5.9 million, representing year on year growth of 12% (2021: £5.3 million).
As previously announced, the Group’s loan book, a key driver for revenue generation, grew to £53.4 million at 31 December 2022, an annual increase of 15.4% (2021: £46.3 million). At 31 December 2022, the Group had 107 live loans (2021: 79), representing an annual 35.4% increase with an average loan size of approximately £499,000 (2021: £586,000).
During 2022 the Group was also able to increase its wholesale bank debt facilities by £5 million to £40 million and renew its £3 million inter-company funding agreement with its parent company Vector Holdings Limited.
Despite current market conditions, the Group is able in most cases to pass on interest rate increases and continues to witness strong demand from potential customers introduced by its established broker network. The Company is benefitting from its diverse portfolio as it increases it weighting towards lower value loans, reflected in the average year end loan figures referred to above.
The Company expects to announce its results and declare its final dividend for the year ended 31 December 2022 in early April 2023.
Agam Jain, CEO of Vector Capital, commented: “We are delighted to report on the Group’s strong and resilient revenue performance in FY 2022, achieved despite the challenging market conditions. The expected outturn for FY2022 is in line with market expectations and reflects the continuing demand for our loans, the robustness of our operating systems and the strong relationships with supportive wholesale debt providers. Our proven business model has created attractive revenue and loan book growth and places us in a strong position to continue to deliver on our strategy and to support continued growth in 2023. The Company has an optimistic outlook for the business and this confidence is demonstrated in its intention to deliver on its continued progressive dividend policy.”
