LendInvest pleased with performance in tough financial year

13th Apr 2023 14:38

(Sharecast News) - Lending platform operator LendInvest reported 20.5% growth in platform assets under management in a full-year trading update on Thursday, and 6.4% growth in the second half.

The AIM-traded firm said that was driven by growth across all of its key product categories, including professional buy-to-let, bridging and development finance.

However, the pace of growth began to slow towards the end of the first half of the 12 months ended 31 March, due to the increase in interest rates, and the market reaction to Liz Truss' and Kwasi Kwarteng's botched 'mini-budget' in September.

It said funds under management increased 45.2% year-on-year, and 4.8% in the second half, with resilient demand from sophisticated investors for funding loans originated on the platform.

LendInvest said it maintained its lending headroom at more than £1bn, to support borrowers as market conditions improved.

The company also launched its first residential mortgage products, targeting borrowers with multiple sources of income, the self-employed and small-business owners.

To support the new growth vector, Lloyds Banking Group increased its funding to LendInvest by £120m, bringing its total funding to £300m.

In addition, HSBC was providing up to £100m in funding, together with the British Business Bank via its government-backed 'ENABLE Guarantee' programme, to fund LendInvest's development finance products.

That, the board said, would allow it to continue to support housebuilding, and alleviate the undersupply of housing in the UK.

LendInvest also noted the successful completion of the sale of its residual economic interest in the Mortimer BTL 2020-1 securitisation for £7m, in line with its strategy to optimise funds under management while selectively moving assets off the balance sheet.

"We have continued to deliver on the commitments we laid out at our initial public offering," said chief executive officer Rod Lockhart.

"We are growing and optimising our funds under management, accessing strong demand from some of the world's largest and most sophisticated financial institutions.

"We are expanding our platform assets under management, and we are continuing to invest in our technology platform to further strengthen our competitive advantage as a technology-driven lending and funding platform for mortgages."

Lockhart noted that the company also celebrated a landmark for LendInvest, with its entry into the UK residential mortgage market, leveraging its track record in professional buy-to-let, bridging and development finance.

"Our proprietary technology is now available to help individuals with multiple sources of income, or the self-employed, and small-business owners, to secure a mortgage, meeting the needs of a large, underserved segment of the market.

"While we remain mindful of the macroeconomic backdrop, we have confidence in our growth strategy.

"Our technology enables us to continue developing disruptive new solutions in existing and new parts of the mortgage market, giving us a competitive edge with brokers and borrowers and helping us to continue to attract diverse sources of capital."

At 1146 BST, shares in LendInvest were down 1.73% at 85p.

Reporting by Josh White for Sharecast.com.