Together expects to benefit from Brexit as lending soars 65%

The lender said Brexit may create further opportunities for specialist lenders and that it was “well placed to benefit from these conditions.”

Average monthly loan originations reached £125.4m, a 15.8% increase from the £108.3m in Q4 2017 and a 65.4% year-on-year growth against £75.8m in September 2016.

To 30 September, Together’s loan book stood at £2.37bn, a 5.7% increase compared with the £2.24bn at June 30, and up 27.7% year-on-year against the £1.86bn in September 2016.
Group weighted average LTV of new originations in the quarter remained at 57.8% compared with 58.7% in Q4 2017 and 55.1% for the same period in 2016.

Together also said that net impairment charge for the quarter remains low at £1.6m, compared with the £0.4m in Q4 2017 and £2.1m in Q1 2017.

Rising profits

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) are up 2.2% to £52.8m compared with £51.7m in Q4 2017, and up 14.5% against the £46.1m EBITDA in Q1 2017.

Profit Before Tax (PBT) increased by 2.9% to £31m, compared with £30.2m in Q4 2017, and by 12.3% when compared with the £27.6m PBT in Q1 2017.

Mike McTighe, group chairman of Together, said: “While detailed Brexit negotiations may increase market volatility and the UK economic outlook remains mixed, this may create further opportunities for specialist lenders. With our successful 43 year track record, established business model and the investment we are making in our platform we believe Together is well placed to benefit from these conditions and to deliver on our ambitious growth plans.”

Cash and interest

Driven by interest earned on higher loan book levels, interest receivable and similar income rose 3.4% to £68m, against the £65.8m in Q4 2017 and the £58.3m recorded in Q1 2017. Meanwhile, cash receipts totalled £319.3m compared to £282.7m in Q4 2017, and £231.6m in Q1 2017

The group also said that the issuance of public residential mortgage-backed securitisation (RMBS) of £275m on September 26, 2017 added “significant additional liquidity” to support lending growth.

McTighe added: “During the quarter, we accelerated our strategic investment programme as we invest in the people, systems, distribution and marketing to build the platform to support our future growth ambitions. We also further diversified our funding structure with the issue of our £275m debut public residential mortgage backed security transaction.”