Specialist lender well placed going forward following strong quarterly results
Cheadle-based Together Financial Services reported strong quarterly results, for the period to September 30, 2023, today.
The property specialist said it has a robust loan book at conservative loans to value (LTV), with low arrears.
Average monthly lending of £223.5m was down 22.9% on Q1 ‘2023 (£289.7m), but up 2.3% on Q4 2023 (£218.6m).
The group net loan book increased to £6.6bn, up 16.3% on Q1’23 (£5.7bn) and up 3.1% on Q4’23 (£6.4bn).
However, Together said while arrears remain below pre-pandemic levels, in line with the wider industry, it is seeing a gradual increase and it continues to monitor the situation carefully.
Interest receivable and similar income for the reporting period was £182.9m, up 53.7% on Q1’23 (£119m) and up 6.7% on Q4’23 (£171.5m).
The group said it remains highly profitable and cash generative.
Underlying profit before tax was £47.3m, up 36.2% on Q1’23 (£34.7m) and down 23.7% on Q4’23 (£61.9m), primarily due to higher charges this quarter relating to impairment, a discretionary staff bonus accrual and temporary fair value movements while the previous quarter benefited from both a release in staff bonus cost accruals and an adjustment to how the group spreads upfront fee income over the life of its loans.
Cash receipts were £653.8m (Q1’23: £541.8m; Q4’23: £583.1m) as redemptions remained strong.
During the period Together further strengthened and enhanced its executive team, with the appointment of John Barker as group chief operations officer and Andrea Dalton as chief transformation officer.
It maintained funding momentum to support growth plans, issued TABS8 RMBS, raising £426m in July 2023, and issued its second RMBS in three months, TABS 9, raising £443m in September 2023.
Together upsized and extended its BABS facility, securing an additional £42m of funding in September and extending maturity to September 2027.
Gerald Grimes, group CEO designate, said: “Together delivered another strong and sustainable performance in the quarter to 30 September, growing the loan book to £6.6bn with low LTVs and headline arrears, while remaining highly profitable and cash generative.
“Originations increased slightly against the previous quarter, as we delivered interest receivable and similar income of £182.9m, underlying profit before tax of £47.3m and cash receipts of £653.8m, in spite of the wider macroeconomic volatility.
“We continued to further strengthen and diversify our funding, raising or refinancing around £1bn of facilities and ending the quarter with £1.2bn of funding headroom, leaving us well placed for future growth. We also achieved a rating upgrade to ‘BB’ from Fitch in October, Based on our financial performance and resilient business profile.”
He added: “The UK economy continues to face headwinds, with GDP growth forecast to remain subdued as interest rates remain higher well into 2024.
“Against this backdrop, many more customers may find themselves underserved and look to specialist lenders for support. With a clear purpose, a proven and well-funded business model and a successful multicycle track record, Together will be there to help customers solve problems and realise opportunities, as we have been for the last 50 years.”
