LendInvest H2 performance boosted by BTL success

In September 2020, the value of its assets under management were £1.4bn.

The specialist lender said the increase was driven by a 66 per cent rise in buy-to-let (BTL) assets since the previous interim period.

Funds under management (FuM) rose by 40 per cent year-on-year to £2.9bn, boosted by the arrangement of a £725m account agreement with J.P. Morgan and the completion of its third residential mortgage-backed securitisation of £280m BTL loans in June 2021.

Revenue generated by the firm’s lending platform increased 28 per cent to £72.4m while gross profit grew by 51 per cent to £26.5m. LendInvest said this reflected higher fees and interest income generated as a result of the increase in platform assets under management (AuM).

Profit before tax increased from a loss of £0.2m, posted on 30 September 2020, to £10.2m at the end of its latest interim reporting period.

The turnaround was driven by growth in its platform revenue, along with an increase in its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) and profits from the completion of its third securitisation and the transfer of a £100m portfolio of BTL assets to J.P. Morgan under the separate account.

In July, LendInvest was listed on the Alternative Investment Market (AIM), a sub-market of the London Stock Exchange. The firm raised £40m to invest in its products and technology.

Looking to H1 2022, which runs from 1 October to March 2022, the firm said lending conditions have remained positive. In spite of macroeconomic uncertainties over consumer confidence and interest rates next year, it expects conditions in the housing market to remain favourable.

The firm received record numbers of BTL applications in October and November following increased demand for its green range. This has offset slower volumes of applications for its short-term lending products as the property development market adjusts to the impact of Covid-19 on material and labour costs.

Rod Lockhart (pictured), chief executive of LendInvest, said: “We are delighted by the significant growth across all our metrics, with strong FuM and Platform AuM growth driving a 28 per cent increase in platform revenue and record profits.

“We continue to invest in our technology, which in turn is having a very positive effect on our operating leverage.

“With the mortgage process largely unchanged since the nineteenth century, LendInvest continues to have a unique opportunity to lead the digital transformation of one of the last verticals of financial services yet to be disrupted by technology. While we remain mindful of the competitive landscape and uncertain economic environment, we are very excited about the opportunities ahead.”