Finance group satisfied with ‘resilient’ first quarter
Together, the Cheadle-based finance group, reported slightly better first quarter results for the period to September 30, today.
Interest receivable and similar income was marginally ahead at £95.3m, compared with £92.5m in the same quarter a year ago, while pre-tax profits of £32.4m was, again, slightly ahead of the £31.5m level last year.
The group loan book for the quarter was £4.0bn, up 3.2% compared with £3.9bn at September 30, 2019 and down 3.9% compared with £4.2bn at June 30, 2020.
The average monthly loan originations of £43.6m were down 75.3% compared with £176.2m in the quarter ended September 30, 2020, although up 118% from £20.0m in quarter ended June 30, 2020.
Despite the challenging climate, the group’s underlying EBITDA has decreased only slightly to £65.4m compared with £67.6m reported in Q1’20 and £67.7m in Q4’20
Cash generation remained robust, with cash receipts of £377.3m, although down 13.8% compared with £437.6m in Q1’20 but up 25.6% compared with £300.4m in Q4’20
Gerald Grimes, group chief executive designate, said: “Together delivered a resilient performance in the quarter to 30 September, despite the ongoing challenges of COVID-19, as we continued to focus on supporting our customers, protecting our colleagues and shaping our business for the future.
“We prudently increased originations, lending £130.7m as the loan book ended the quarter at £4bn, while maintaining very conservative portfolio LTVs of 52.4%.
“The group remained robustly profitable and cash generative, with underlying profit before tax of £33.9m and cash receipts of £377.3m.
“We also further strengthened our liquidity and capital positions including issuing our fourth public RMBS, the £366m TABS 4, and extending our revolving credit facility.
“At 6 November, the group had undrawn facility headroom of £937m and accessible liquidity of £287m.”
He added: “While we expect conditions to remain challenging for some time, as we deliver our modernisation and transformation programmes and with strong levels of capital and liquidity, we believe Together is well positioned for the future and to play our part in supporting the UK’s economic recovery.”
The business announced it has completed a thorough review of its operating model to ensure the cost base remains appropriate, including completion of an employee consultation process which resulted in reducing colleague numbers by 175 and savings of around £9m per annum.