TIDMVCAP
RNS Number : 7596K
Vector Capital PLC
06 September 2021
Vector Capital plc
("Vector Capital", "Company" or "Group")
Half Year Results for the period ended 30 June 2021
A Strong Trading Performance
Highlights
-- Loan book growth 24.2% to GBP40.6m (as at 30 June 2020: GBP32.7m)
-- Revenue up 16% to GBP2.5m (H1 2020: GBP2.1m)
-- PAT up 3% to GBP1.05m (H1 2020: GBP1.02m)
-- EPS of 2.50p (H1 2020: 3.00p)
-- Interim dividend of 0.95p per share, reflecting a strong performance
Operational Highlights
-- Successful placing to raise GBP1.5m gross, to build further
the capital base and meet demand for new loans
-- Increased our wholesale banking facilities from GBP25m to GBP30m
-- Significant progress made in establishing new broker
relationships which have led to an increased number of new
enquiries and proposals
-- Continued to invest in our technology platform to ensure
operational resilience and efficiency
-- Invested in staff training to enhance expertise which has led
to ability to handle higher volumes and more complex
transactions
-- Best practice ESG policies in place to support responsible
lending and encourage sustainability across our business
Agam Jain, CEO of Vector Capital, commented : "Vector Capital's
first half performance has been strong. We have continued to make
excellent progress against our strategy and we are well placed to
capitalise on the healthy property market and demand for our loans.
In response to this demand and ensure we have a strong capital
base, we raised a further GBP1.5m in the period and increased our
wholesale banking facilities to GBP30m. Reflecting our performance
and the confidence we have in the business, we are declaring an
interim dividend of 0.95p per share.
"Pleasingly, we have a best practice ESG policy now in place to
support our commitment towards being a responsible lender and
encouraging sustainability across our business. This is an
important part of our business and underpins our values and how we
conduct ourselves.
"Our aim is to be seen by our customers as a trusted,
responsible partner that delivers outstanding services. We are
determined to build on the progress we have made and enhance our
capability to provide new loans which will help secure sustainable
benefits for all of our stakeholders."
Enquiries
Vector Capital plc c/o TB Cardew
Agam Jain
Allenby Capital Limited
James Reeve/George Payne (Corporate
Finance)
Tony Quirke (Sales and Corporate Broking) + 44 (0) 20 3328 5656
TB Cardew
Shan Shan Willenbrock + 44 (0)7775 848537
Lucas Bramwell/Charlotte Anderson + 44 (0)20 7930 0777
vector@tbcardew.com
About Vector Capital:
Vector Capital provides secured, business-to-business loans to
SMEs based in England and Wales. Loans are typically secured by a
first legal charge against real estate. The Company's customers
typically borrow for general working capital purposes, bridging
ahead of refinancing, land development and property acquisition.
The loans provided by the Company are typically for renewable
12-month terms with fixed interest rates.
Chairman's Statement
I'm delighted to present our 2021 Interim Results for the
six-month period to 30 June 2021, which report consolidated pre-tax
profits of GBP1,298,000 (H1 2020: GBP1,258,000, FY 2020:
GBP2,347,000), and to declare an interim dividend of 0.95 pence per
share to be paid on 24th September 2021 to shareholders on the
register on 17(th) September 2021. The results for the first half
of the year reflect the continued positive development of the
business linked to building the Group's loan book to GBP40.6m (30
June 2020: GBP32.7m, 31 December 2020: GBP36.4m) and creating a
leading presence in our chosen market in the provision of secured
loans to the SME sector.
It's also very pleasing to report that, following the successful
admission to the AIM market on 29(th) December 2020, the Company
returned to the market with a Placing of 3,191,490 new ordinary
shares at 47 pence each on 23 June 2021 to raise GBP1.5m gross, to
build further the capital base. During the period, we were also
able to increase our wholesale banking facilities from GBP25m to
GBP30m. In addition, we are in the early stages of trialling a
co-funding model, allowing third party lenders to participate
directly alongside the Group in the provision of certain loans.
While COVID-19 restrictions continued to impact the business
during the period our proven systems were able to manage all
operations successfully and the UK property lending market has
remained resilient.
The Group's half year results, recorded revenue growth of 15.8%
and an increase in profits before tax of 3.2%, year-on-year,
combined with an 11.6% rise in the value of the loan book from 31
December 2020 to 30 June 2021 referred to above, reflect the hard
work of the executive team, the quality of the underlying
operational systems and the strength of the business model.
We remain committed to building on the Group's strong business
foundations and its positive performance now as a public company
and to strategically grow the loan book using a combination of our
own resources, the facilities provided by our wholesale lenders
and, on a selective basis, via co-funding arrangements.
As a Board we are very mindful of our wider environmental,
social and governance responsibilities to shareholders and other
stakeholders and we have developed, from what we believe to be
market best practice, underlying principles and developing
procedures to address these important issues. Details of our ESG
policies and procedures, aimed principally at responsible lending
and encouraging sustainability and avoidance of waste in all we do,
are set out on the Company's website, www.vectorcapital.co.uk.
The results for the period, were only possible by the efforts of
Vector's employees and my fellow Board members and considerable
thanks are due to them and our business partners.
I am confident that as a team we have the skills, experience and
opportunities to make further progress throughout the rest of 2021
and beyond and to capitalise on the opportunities which will
arise.
Robin Stevens
Chairman
Chief Executive's Statement
A positive performance and continued growth
I am pleased to report a very healthy set of interim results
which evidences the Group's continued growth and development.
The loan book at the end of the period was GBP40.6m (30 June
2020: GBP32.7m, 31 December 2020: GBP36.4m). The average monthly
loan book value for the 6 months period was GBP38.4m (H1 2020
average monthly loan book: GBP34.7m, 2020 average monthly loan
book: GBP34.8m).
The average interest rate for the period increased to 11.70%
p.a. (H1 2020: 11.69%, 12 months to Dec 20 was 11.53%).
Pre-tax profit for the 6 months was GBP1.30m (H1 2020:
GBP1.26m).
Diverse portfolio
Our loan book security portfolio comprises:
-- residential investment properties
-- residential refurbishments
-- mixed use (commercial ground floor with flats above)
-- commercial (warehouse, retail, hospitality)
-- development projects (construction of houses and flats)
-- land with planning permission
The conventional residential bridging segment of the market has
become crowded with many new entrants however because of our
expertise in the different segments mentioned above we can still
target overall loan book growth. We are also issuing a limited
number of loans against 2(nd) charge where the equity is
substantial.
Funding
We raised further capital on AIM with a Placing of 3,191,490 new
shares at 47 pence each on 23 June 2021 to raise GBP1.5m gross.
Our capital and liquidity remain healthy and we are in a strong
position to fund new loan opportunities. We have two banking lines
that are available primarily for residential transactions. Both of
the wholesale banks from whom we have facilities have indicated
that they would be willing to offer increased facilities. We
continue to explore debt funding sources for the other market
segments that we operate in. At the end of the period, the Group
had GBP10.1m of available finance from the wholesale banks (30 June
2020: GBP5.68m, 31 December 2020: GBP10.2m).
Currently we have conservative gearing - we believe that there
is tremendous scope to use suitable debt facilities and start
gearing in the future. The Group has designed a co-funding
instrument and in the early stages of test marketing.
Information Technology
We continue to invest and initiate further improvements in our
software platform by reviewing and re-mapping our processes. These
software upgrades are expected to be ready for Q4 this year and
will further improve our operational resilience and efficiency.
Headcount
During the period we have invested significant effort in staff
training which has increased the expertise and productivity of each
team member. As a result, we have the capacity to handle increased
activity and handle more complex transactions with the same team.
We do not need to increase headcount.
Marketing
We have made considerable headway in establishing new Broker
relationships which have led to an increased number of new
enquiries and proposals. We will continue with this effort for the
rest of the year.
Dividend
On the basis of the financial performance in the first half of
the year, a dividend of 0.95p per share is being declared. This
will be paid on 24th September 2021 to shareholders on the register
on 17(th) September 2021.
Outlook
The success to date of the vaccination programme and UK
Government's economic interventions provides cause for optimism and
allows us to move ahead with our growth agenda, supported by the
good level of interim profits.
There is heavy competition in the residential bridging segment,
but this is compensated by increased opportunities in the other
market segments such as land and development. We are confident of
continuing our positive performance in the remainder of 2021 and
generating healthy returns for the benefit of all stakeholders.
Agam Jain
Chief Executive Officer
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Revenue 3 2,467 2,130 4,325
Cost of sales (228) (132) (321)
------------- ------------- -------------
Gross profit 2,239 1,998 4,004
Other income 29
Administrative expenses 4 (378) (214) (668)
Operating profit 1,861 1,784 3,365
Finance costs (563) (526) (1,018)
------------- ------------- -------------
Profit on ordinary activities
before taxation 1,298 1,258 2,347
Income tax expense 5 (247) (239) (445)
------------- ------------- -------------
Profit after taxation 1,051 1,019 1,902
Other comprehensive income - - -
------------- ------------- -------------
Total comprehensive income attributable
to the shareholders of the Company 1,051 1,019 1,902
============= ============= =============
Pro - forma basic and diluted
earnings per share
attributable to the owners
of the Company (pence) 10 2.50 3.00 5.58
============= ============= =============
Condensed Consolidated Statements of Financial Position
For the six months ended 30 June 2021
Notes 30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Non-Current assets
Property, plant and equipment 6 3 - 4
3 - 4
------------- ------------- ------------
Current assets
Trade and other receivables 7 41,067 33,327 36,963
Cash and bank balances 971 1,612 2,569
42,038 34,939 39,532
------------- ------------- ------------
Total Assets 42,041 34,939 39,536
============= ============= ============
Current liabilities
Trade and other payables 8 18,653 16,220 18,030
Income tax payable 247 613 205
18,900 16,833 18,235
------------- ------------- ------------
Total Liabilities 18,900 16,833 18,235
------------- ------------- ------------
Equity
Share capital 9 226 170 210
Share premium 20,876 16,830 19,502
Group reorganisation reserve 188 188 188
Retained earnings 1,851 918 1,401
23,141 18,106 21,301
------------- ------------- ------------
Total Equity and Liabilities 42,041 34,939 39,536
============= ============= ============
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2021
Share Share premium Group reorganisation Retained Total equity
capital reserve profits
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2020 170 16,830 188 (101) 17,087
Profit for the six months
ended 30 June 2020 - - - 1,019 1,019
Dividends paid - - - - -
Balance at 30 June 2020 170 16,830 188 918 18,106
Issue of share capital 40 2,672 - - 2,712
Profit for the six months
ended 31 December 2020 - - - 883 883
Dividends paid - - - (400) (400)
Balance at 31 December
2020 210 19,502 188 1,401 21,301
Issue of share capital 16 1,374 - - 1,390
Profit for the six months
ended 30 June 2021 - - - 1,051 1,051
Dividends paid - - - (601) (601)
Balance at 30 June 2021 226 20,876 188 1,851 23,141
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2021
Six Months Six Months Year ended
ended 30 ended 30 31 December
June June
2021 2020 2020
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Profit for the period before
taxation 1,298 1,258 2,347
Adjustment for:
Interest expense 563 526 1,018
Depreciation 1 - 1
Tax paid (205) - (614)
------------ ------------ -------------
Operating cash flows before
movements in working capital 1,657 1,784 2,752
(Increase)/decrease in trade
and other receivables (4,104) 924 (2,713)
Increase/(decrease) in trade
and other payables 623 (2,169) (1,566)
------------ ------------ -------------
Cash generated from/(absorbed
in) operating activities (1,824) 539 (1,527)
Interest paid (563 ) (526) (1,018)
Net cash generated from/(absorbed
in) operating activities (2,387) 13 (2,545)
------------ ------------ -------------
Cash flows (for)/from investing
activities
Acquisition of property, plant
and equipment - - (5)
Net cash (used in)/generated
from investing activities - - (5)
------------ ------------ -------------
Cash flows (for)/from financing
activities
Increase in inter-company
debts - 1,665 2,473
Amount withdrawn by directors - (3) (3)
Issue of new shares 1,390 - 2,712
Equity dividends paid (601) (400) (400)
Net cash generated from financing
activities 789 1,262 4,782
------------ ------------ -------------
Net increase(decrease) in
cash & cash equivalents (1,598) 1,275 2,232
Cash and equivalent at beginning
of period 2,569 337 337
Cash and equivalent at end
of period 971 1,612 2,569
============ ============ =============
Notes to the Interim Financial Statements
For the six months ended 30 June 2021
1 . Basis of Preparation
The interim financial statements of Vector Capital Plc are
unaudited condensed financial statements for the six months ended
30 June 2021. These include unaudited comparatives for the six
months ended 30 June 2021 together with audited comparatives for
the year ended 31 December 2020.The financial information for the
six months ended 30 June 2021 does not constitute statutory
financial statements within the meaning of section 434 of the
Companies Act 2006. A copy of the audited financial statements for
the year ended 31 December 2020 is available on the Company's
website. The auditor's opinion on those financial statements was
unqualified and did not draw attention to any matters by way of an
emphasis of matter paragraph. These interim condensed financial
statements have been prepared on the basis of the accounting
policies expected to apply for the financial year to 31 December
2021 which are based on the recognition and measurement principles
of United Kingdom adopted International Financial Reporting
Standards (IFRS), in accordance with the provisions of the
Companies Act 2006, applicable to companies reporting under
IFRS.
The financial statements have been prepared under the historical
cost convention. The Group's presentation and functional currency
is Sterling. The interim financial statements do not include all of
the information required for full annual financial statements and
do not comply with all the disclosures in IAS 34 'Interim Financial
Reporting', and should be read in conjunction with the Group's
annual financial statements to 31 December 2020. Accordingly,
whilst the interim statements have been prepared in accordance with
IFRS, they cannot be construed as being in full compliance with
IFRS. The preparation of financial statements in conformity with
United Kingdom adopted International Financial Reporting Standards
(IFRS) requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the Group's accounting policies. The accounting
policies adopted are consistent with those followed in the
preparation of the Group's annual financial statements for the year
ended 31 December 2020.
2. General information
The condensed consolidated financial information comprises the
financial information of Vector Capital Plc, Vector Asset Finance
Ltd and Vector Business Finance Ltd (the Group ).
The principal activities of the entities in the Group are as
follows: -
Name of company Country of incorporation Principal activities
------------------------------ ------------------------------ --------------------------
Vector Capital Plc England and Wales Holding company
Vector Business Finance England and Wales Commercial lending
Ltd
Vector Asset Finance Ltd England and Wales Commercial lending
There have been no significant changes in these activities
during the relevant financial periods.
3. Segmental reporting
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Operating Group that
are regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors) as defined in IFRS 8, in
order to allocate resources to the segment and to assess its
performance.
Based on management information there is one operating segment.
Revenues are reviewed based on the services provided.
No customer has accounted for more than 10 % of total revenue
during the periods presented .
4 . Administrative costs
30 Jun 21 30 Jun 20 31 Dec 20
(Unaudited) (Unaudited) (Audited)
Current GBP'000 GBP'000 GBP'000
Recurring 378 214 539
Non-recurring costs 129
Total 378 214 668
------------- ------------- -----------
During the year ended 31 Dec 20 exceptional non-recurring costs
in relation to the admission of the Company's ordinary shares to
trading on AIM were incurred totalling GBP129k.
5. Income Tax expense
The tax charge on profits assessable has been calculated at the
rates of tax prevailing, based on existing legislation,
interpretation and practices in respect thereof.
6. Property, plant and equipment
Fixture, fittings and equipment
---------------------------------------------
30 Jun 21 30 Jun 20 31 Dec 20
(Unaudited (Unaudited)GBP'000 (Audited`)
GBP'000 GBP'000
Cost
Brought forward 5 - -
Additions - - 5
Disposals - - -
Carried forward 5 - 5
----------- ------------------- -----------
Accumulated depreciation
Brought forward 1 - -
Depreciation 1 - 1
----------- ------------------- -----------
Carried forward 2 - 1
----------- ------------------- -----------
NBV c/fwd 3 - 4
----------- ------------------- -----------
NBV b/fwd 4 - -
----------- ------------------- -----------
7. Trade and other receivables
30 Jun 21 30 Jun 20 31 Dec 20
(Unaudited) (Unaudited) (Audited)
Current GBP'000 GBP'000 GBP'000
Trade receivables 40,604 32,740 36,374
Prepayments and accrued income 463 587 589
Total 41,067 33,327 36,963
------------- ------------- -----------
61% of trade receivables were held by third party secure funding
(30 Jun 20: 78%, 31 Dec 20: 73%).
8 . Trade and other payables
30 Jun 21 30 Jun 20 31 Dec 20
(Unaudited) (Unaudited) (Audited)
Current GBP'000 GBP'000 GBP'000
Trade payable 26 9 18
Amounts owed to group undertakings 3,000 1,791 3,000
Other payables 15,481 14,366 14,823
Accruals and deferred income 146 54 189
Total 18,653 16,220 18,030
------------- ------------- -----------
Other payables includes loan finance of GBP15,417k (30 Jun 20:
GBP14,320k, 31 Dec 20: GBP14,812k) which is secured against
associated loans assigned by way of block discounting.
9 . Called up share capital
30 Jun 21 30 Jun 20 31 Dec 20
Authorised Nominal value (Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
45,244,385 Ordinary GBP0.005 226 170 210
(30 Jun 20: 17,000,000 Ordinary (30 Jun 20 GBP0.01,
31 Dec 20: 42,052,895 Ordinary) 31 Dec 20 GBP0.005)
On 28 June 2021 the Company issued 3 , 191 , 490 new Ordinary
shares of 0.5 pence each at a 47 pence per share
10. Basic and diluted earnings per share
The calculation of earnings per share is based on the following
earnings and number of shares .
30 Jun 31 Dec 20
21 30 Jun 20
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Total comprehensive ( income for
the period, used in the calculation
of total basic and diluted profit
per share 1,051 1,019 1,902
Weighted average number of ordinary
shares for the purpose of basic
and diluted profit per share 42,079,055 34,000,000 34,066,007
Earnings per share
Basic and diluted earnings per
share (0.5 pence (30 Jun 20; 1
pence, 31 Dec 20; 0.5 pence)) 2.50 3.00 5.58
The weighted average number of shares for 30 Jun 20 include a
retrospective adjustment for the share split undertaken in Dec
20.
11 . Significant related party transactions
The Group owed GBP3 million to its parent company, Vector
Holdings Ltd (30 Jun 20 GBP1.8 million, 31 Dec 20: GBP3 million).
During the period the Company paid interest totalling GBP75k to
Vector Holdings Ltd in relation to the balance owed as per the loan
agreement (30 Jun 20: GBPNil, 31 Dec 20: GBPNil).
During the period the Company paid GBP486k in dividends to
Vector Holdings Ltd (30 Jun 20: GBPNil, 31 Dec 20: GBP400k).
12 . Subsequent events
There were no significant subsequent events which warranted
disclosure.
13 . Half Year Report
A copy of this half year interim report, as well as the annual
statutory accounts to 31 December 2020 are available on the
Company's website at
www.vectorcapital.co.uk/investors/corporate-documents
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END
IR FFFLLAVIEIIL
(END) Dow Jones Newswires
September 06, 2021 02:00 ET (06:00 GMT)
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