Lendinvest Plc · LSE:LINV
Lendinvest — FY2023 Earnings Presentation
32 slides from Lendinvest's earnings presentation, Jul 18, 2023
Slide 1: Full year results for the year ended 31 March 2023
Full year results for the year ended 31 March 2023 Mortgages made simple 18 July 2023
Slide 2: Agenda
Agenda 01 FY 2023 highlights Rod Lockhart, CEO 02 Financials Michael Evans, CFO 03 Strategic update Rod Lockhart, CEO and David Broadbent, CFO designate 04 Outlook and long-term opportunity Rod Lockhart, CEO and David Broadbent, CFO designate 05 Appendices Mortgages made simple | 2
Slide 3: FY 2023 highlights
FY 2023 highlights
Slide 4: Market backdrop
Market backdrop Base rate rising to its highest point since 2008 ¹ Base rate - 8 increases in FY 20231 Interest rate swaps - increased volatility CPIH2 - peaked at 9.6% in October 2022; 7.8% in April 2023 Buy-to-let mortgages - slowing growth: March 2023: +1.7%; December 2022: +3.6% House prices - r
Slide 5: Significant progress in a challenging year
Launching new products Successfully launched Residential Mortgages and the Residential Investment Portfolio Loan product Expanding our FuM Significant Diversifying our funding sources with J.P. Morgan, Lloyds, HSBC and our third retail bond progress in a Growing Platform AuM 21% growth in Platform A
Slide 6: Financial highlights
Financial highlights Platform AuM FuM Net operating income £2,587.0m £3,605.9m £54.7m 21% 23% 8% Profit before tax Basic EPS Full year dividend per share £14.3m 8.3p 4.5p 1% 0% 2% Mortgages made simple | 6
Slide 7: Platform AuM increased 21% to £2.6 billion
Platform AuM increased 21% to £2.6 billion 46% CAGR 21% increase in Buy-to-Let platform AuM Released new products to support landlords as rates increased 19% increase in Short-term lending platform AuM* Broker portal driving momentum *includes Residential Investment Portfolio Loan product Mortgages
Slide 8: FuM increased 23% to £3.6 billion and further diversified
FuM increased 23% to £3.6 billion and further diversified Key transactions in FY 2023 - Lloyds Bank - £300m mortgage funding partnership - J.P. Morgan - fourth upsize of separate account to £1bn - Raised £100m from HSBC, supported by the British Business Bank - Completed our fourth securitisation -
Slide 9: Financials
Financials
Slide 10: New disclosure - components of net operating income
New disclosure - components of net operating income We have revised our disclosure to enhance transparency for the following reasons: 1. Facilitating peer group comparison 2. Distinguishing income sources: a. Income from assets held on our balance sheet - net interest income b. Income from assets ma
Slide 11: Profit & loss
Profit & loss Year to Year to 31 March 31 March Group £m Change 2023 2022 £'m £'m Platform AuM increased by 21% to £2,587m: Platform Assets under Management 2,587.0 2,142.0 21% - Buy-to-Let increased by 21% to £1,857m - Short-term lending increased by 19% to £768m Net interest income 38.4 26.4 45% N
Slide 12: Strategic update
Strategic update
Slide 13: Making our divisional reporting simple
Making our divisional reporting simple Realignment of the business into two divisions: - Mortgages: online platform for streamlined customer experience - Capital: complex lending with an expert, human-centric approach Current split Future split Long-term lending Mortgages Buy-to-Let mortgages Buy-to
Slide 14: Our response to changing market conditions
Our response to changing market conditions Challenges Our response Diversify our sources of FuM Volatility in swap rates Agile pricing Economic conditions impacting the property Increased focus on the less price sensitive and growing and mortgage market segments of the mortgage market Affordability
Slide 15: Residential Mortgages
Residential Mortgages Disrupting a £100 billion market segment Opportunity - Customers underserved by high street 30% of key workers have been turned down for a mortgage lenders Objective - Replicate our success in BTL, utilising our tech platform, broker network and deep domain knowledge 28% of sel
Slide 16: Technology powers our disruptive and competitive edge
Technology powers our disruptive and competitive edge Mortgage applications Speed to market Risk management Tend to be slow, frustrating Competitors are slow to price Traditional lenders rely on and manual and launch innovations manual underwriting Mortgages made simple Delivering at speed without D
Slide 17: Our technology is a differentiator
Our technology is a differentiator “ They have a very easy application system, helpful staff and speedy decision making. A quick and simple process for a client. Application to offer in 11 working days which is great! “ Broker user experience and product administration is market-leading. Underpinned
Slide 18: ESG
Lending sustainably and with purpose Our aim is to provide accessible environmentally friendly options to help customers prioritise the well-being of our planet. Gender pay gap better than Certified Carbon Neutral peers* FY23 > 50% of Buy-to-Let ESG Management 40% female on EPIC products Green Bond
Slide 19: Moving towards a "capital-lite" model
Moving towards a “capital-lite” model As at 31 March 2022 As at 31 March 2023 As at 30 June 2023 Platform AuM managed on behalf of third parties Platform AuM held On balance sheet Notable transactions in FY23 Notable transactions post YE August 2022 - derecognised £280m of loans April 2023 - derecog
Slide 20: Outlook and long-term opportunity
Outlook and long-term opportunity
Slide 21: Near-term outlook
Near-term outlook ● Market backdrop to remain challenging in the near term ● Platform AuM ○ Expect to maintain current growth trajectory, primarily driven by Mortgages division ○ Increasing proportion of platform AuM managed on behalf of third parties ● Income ○ Gross income expected to increase due
Slide 22: Long-term opportunity
Long-term opportunity ● Expanding market opportunity amidst mainstream banks' retrenchment ● Continuous expansion of distribution channels ● Strengthened market positioning through new funding lines ● Best-in-class technology platform ○ Scalable solutions for future growth ○ Agile approach for produ
Slide 23: Q&A
Q&A
Slide 24: Appendices
Appendices
Slide 25: Platform AuM by new divisions - Mortgages and Capital
Platform AuM by new divisions - Mortgages and Capital 46% CAGR 23% increase in our Mortgages Platform AuM in FY23 11% increase in our Capital Platform AuM in FY23 Mortgages made simple | 25
Slide 26: Limited Credit Risk Exposure (as at 31 March 2023)
Limited Credit Risk Exposure (as at 31 March 2023) No risk retained as no residual interest held No risk retained in either RMBS 2022 or RMBS 2020 and Funds & Separate Accounts are off balance sheet Mortgages made simple | 26
Slide 27: Adjusted EBITDA to Profit Before Tax
Adjusted EBITDA to Profit Before Tax Adjusted EBITDA defined as Group profit or loss before finance income, finance expenses, income tax, depreciation and amortisation, share-based payment charge, and exceptional items. Mortgages made simple | 27
Slide 28: Long-term growth drivers
Long-term growth drivers Est. Total Addressable Market* £bn Market Share £0.5bn 9% Given our market share, Bridging, £0.2bn 1% Development and BTL provide substantial growth opportunities £1.8bn 2% Launch of Residential Mortgages increased - - our current addressable market by £100bn - - - - Mainstr
Slide 29: Balance sheet
Balance sheet £m 31 Mar 2023 31 Mar 2022 Change % Cash balance excluding monies held for lending reduced £25.7 million to Cash & Cash Equivalents 46.7 118.2 (60%) £13.7 million - £18.6 million relating to equity Trade & Other Receivables 6.1 6.3 (3%) co-invested into new lending - £7.9 million of di
Slide 30: Technology Capability recognised across the market
Technology Capability recognised across the market Accelerate state of DevOps Report - produced by Google DevOps Research and Assessment Team (DORA) Software Delivery Performance Metric Elite High Medium Low On demand (multiple Between once per week Between once per month Fewer than once per six Dep
Slide 31: Disclaimer
Disclaimer Certain statements in this presentation are forward-looking statements. In some cases, these forward looking statements can be identified by the use of forward looking terminology including the terms “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “will”, “seek”, “continue
Slide 32: lendinvest.com Mortgages made simple
For more information: lendinvest.com Alex Dee Head of Investor Relations alex.dee@lendinvest.com lendinvest.com Mortgages made simple 32