Distribution Finance Cap. Hldgs PLC Q2 Trading Update (9360D)
02 Julio 2021 - 1:00AM
UK Regulatory
TIDMDFCH
RNS Number : 9360D
Distribution Finance Cap. Hldgs PLC
02 July 2021
2 July 2021
Distribution Finance Capital Holdings plc
("DF Capital", the "Company" or, together with its subsidiaries,
the "Group")
Q2 Trading Update
and
Notice of Interim Results
Distribution Finance Capital Holdings plc, a newly authorised
bank providing working capital solutions to dealers and
manufacturers across the UK, today announces its Q2 trading update
and re-affirms the Board's expectation to achieve monthly run-rate
profitability during Q4 2021.
The Group is pleased with the progress it has made during the
quarter, building on the momentum reported since the beginning of
the year. New loan origination has continued at pace, exceeding
GBP295m during the 6-month period to June 2021 (2020: GBP115m)
underpinned by the strong pipeline previously reported by the
Group, which now exceeds GBP1bn.
The Group's progress in converting its pipeline and the
on-boarding of new dealers has exceeded expectations. During the
first 6 months of 2021 the Group onboarded more than 80 new dealers
and as at 30 June 2021, the Group had in excess of 700 dealer
relationships with aggregate dealer loan facilities totalling
c.GBP465m (2020: GBP364m).
Dealers across most sectors are reporting strong demand for new
and used assets, particularly amongst those sectors focused on the
leisure, recreational activities and home delivery markets. This
pent-up demand, driven by the impact of the global pandemic and
on-going foreign travel restrictions, has led to loan repayments
exceeding expectations. As a result, the Group's stock turn has
accelerated from c.150 to c.110 days in line with the speed of
product sales.
Whilst many dealers within the Group's network are reporting
record sales, inventory replenishment has been impacted, with many
of the Group's manufacturer partners reporting increasing commodity
prices and a knock-on impact on their supply chains. Manufacturer
production levels are exceptionally high, however the achievement
of projected delivery dates have been materially impacted. This
exceptional trend, coupled with high stock turn, has slowed the
Group's overall loan book growth. As a result, the Group's loan
book stood at GBP166m at 30 June 2021 (2020: GBP166m) and has
continued to deliver strong arrears performance.
Whilst the strong new loan origination, accelerated stock turn
and associated loan repayments are expected to continue through Q3
2021, which impacts near-term gross revenue, the Group expects
growth to normalise through the second half of the year and remains
confident about inventory replenishment beyond the summer months.
The Board is pleased to re-affirm its expectation to achieve
monthly run-rate profitability during Q4 2021. This target is
underpinned by pricing and operating cost disciplines, an
increasing number of dealers, total loan facilities provided and
the strength of projected manufacturer order books during the
winter re-stocking period, particularly in the transportation
sector, which is expected to lead to significant loan origination
in the second half of the year.
Carl D'Ammassa, Chief Executive of the Group, commented: "The
momentum we saw in the first quarter has continued at pace. We
continue to originate significant volumes of new lending to support
the strength of demand our customers are seeing on the back of the
staycation and UK leisure boom. It is pleasing to see the speed of
adoption of electric light commercial vehicles too, which we expect
to be a significant driver of our loan book growth in the second
half. Whilst these remain unusual times, it is clear that our
dealer and manufacturer partners are thinking beyond 2021,
anticipating normalising trading conditions which should positively
impact the Group's performance in 2022 and achievement of full year
profitability."
The Group's interim results for the six months ended 30 June
2021 are expected to be announced on 23 September 2021.
For further information contact:
Distribution Finance Capital Holdings
plc
Carl D'Ammassa - Chief Executive Officer +44 (0) 161 413 3391
Kam Bansil - Head of Investor Relations +44 (0) 7779 229508
http://www.dfcapital-investors.com
Investec Bank plc (Nomad and Broker) +44 (0) 207 597 5970
David Anderson
Bruce Garrow
Harry Hargreaves
Maria Gomez de Olea
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END
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