Lendinvest Plc · LSE:LINV
Lendinvest — H1 FY2023 Earnings Presentation
33 slides from Lendinvest's earnings presentation, Nov 30, 2022
Slide 1: Half year results presentation
Half year results presentation For the six months ended 30 September 2022 Property finance made simple 30th November 2022
Slide 2: Agenda
Agenda 1. H1 2023 Highlights Rod Lockhart, CEO 2. Financials Michael Evans, CFO 3. Strategic update Rod Lockhart, CEO 4. Outlook and summary Rod Lockhart, CEO 5. Appendix Property finance made simple | 2
Slide 3: H1 2023 Highlights
H1 2023 Highlights 3
Slide 4: Financial highlights
Financial highlights £3,442m +20% £2,431m +33% Platform Assets under Management Funds under Management £42.5m -8% £14.8m +45% Revenue Profit before tax 10.4p +63% 1.3p 30% of FY22 Diluted earnings per share Interim dividend per share Notes: Comparable period 6 months to 30 September 2022 vs 6 months
Slide 5: Strategic highlights - driving sustainable long-term growth
Strategic highlights - driving sustainable long-term growth Upsized the JP Morgan Completed our fourth Issued our third listed bond, separate account from securitisation - £270 million LendInvest Secured Income II £725 million to £1,000 million of BTL mortgages plc 6.50% bonds due 2027, raising £38
Slide 6: FuM - up 20% to £3.4 billion from a diverse pool of investors
FuM - up 20%1 to £3.4 billion from a diverse pool of investors Fourth upsize by JP Morgan separate Type of investor Value2 Key investors account from £725 million to £1,000 million, reflecting our strategy of optimising FuM and Funds and separate accounts £1,459 million JP Morgan - £1,000 million inv
Slide 7: Platform AuM - up 33% to £2.4 billion
Platform AuM - up 33%1 to £2.4 billion Buy-to-Let lending 44%1 increase in Platform AuM to 45% CAGR £1.7 billion BTL lending, which we launched less than 5 years ago, today represents 75% of total Platform AuM, demonstrating the scalability £1,749m of the platform £1,218m Short-term lending 11%1 inc
Slide 8: 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 and Competitors are slow to price Traditional lenders rely on frustrating and launch innovations manual underwriting Property finance made simple We identify new opportunities a
Slide 9: Mortgage brokers consistently rate our technology top quartile
Mortgage brokers consistently rate our technology top quartile Use of technology and automation in property finance significantly lags other segments of financial services We have invested more than £55m in developing our proprietary technology giving us a competitive advantage and creates a barrier to
Slide 10: Financials
Financials 10
Slide 11: Income statement
Income statement 30 Sep 2021 £m 30 Sep 2022 Change Platform AuM increased by 33% to £2,421 (Restated) million, driven by a 44% increase in Buy-to-Let Platform Assets Under 2,431 1,826 33% AuM to £1,749 milion Management Revenue 42.5 46.3 (8%) Gross profit increased by 17% primarily as a result of a £
Slide 12: Revenue is diversified and more than 80% is recurring
Revenue is diversified and more than 80% is recurring Revenue streams Revenue H1 FY23 Customer Recurring2 Driver % of Revenue stream (£m) Brokers & borrowers - Interest income for loans we hold on our balance sheet Interest on loans 31.2 ✓ Platform AuM 73% - Origination fees on every loan & advances
Slide 13: Gross profit - up 17% to £31.1 million
Gross profit - up 17%1 to £31.1million Platform AuM of £2.4bn - 33%1 growth Gross Profit of £31.1m - 17%1 growth £1,749m £1,218m £13.5m £22.9m £608m £682m £13.0m £8.2m ● BTL’s gross profit increased by 70%1 to £22.9 million, of which £9.2 million relates to a gain on the call of the Mortimer BTL 2019-1
Slide 14: Investment in technology driving operating leverage
Investment in technology driving operating leverage Our technology generates significant operating leverage demonstrated by the slower growth in operational expenditure versus growth in Platform 3.39% AuM 3.13% Operational expenditure as a % of 2.27% Platform AuM has decreased from 3.39% to 1.27% ove
Slide 15: Adjusted EBITDA to Profit Before Tax
Adjusted EBITDA to Profit Before Tax £14.3m £14.8m £2.7m Adjusted EBITDA of £14.3m £1.4m £0.7m Depreciation and amortisation of £1.4m, consisting of £0.5m depreciation and £0.9m amortisation Share based payments of £0.7m Finance income of £2.7m, consisting of a £3.6m gain recognised through the P&L r
Slide 16: Free cash flow
Free cash flow £m H1 FY23 H1 FY22 In addition to deducting capital expenditure from our net cash flow from operating activities we have made Net cash outflow from operating activities 10.1 (11.2) the following adjustment to derive free cash flow: - Added back movements in loans and advances Less Capital
Slide 17: Strategic update
Strategic update Property finance made simple | 17
Slide 18: Well-positioned against a challenging macroeconomic backdrop
Well-positioned against a challenging macroeconomic backdrop Proprietary technology Diverse and scalable source of funds - More than £55 million invested in technology - Scalable asset management platform attracts a diverse range of investors - High barrier to entry for new entrants - We are the tru
Slide 19: Short-term growth drivers
Short-term growth drivers Grow & Optimise FuM Expand Platform AuM Invest in tech New separate account with a US-based As market conditions changed we responded Significant technology capability has been annuity provider to grow our nascent by launching a new tracker mortgage to invested in the platfo
Slide 20: Long term growth drivers
Long term growth drivers Our bridging and development loans and professional £0.4bn* / c.£6bn (Market Share of 7%) Buy-to-Let mortgages provide substantial growth opportunities given our market share, £0.2bn* / c.£24bn (Market Share of 1%) £2.4 billion* out of a market size of £150 billion £1.7bn* /
Slide 21: Outlook and Summary
Outlook and Summary Property finance made simple | 21
Slide 22: Outlook - Confident in long term prospects
Outlook - Confident in long term prospects Our technology platform and robust business model provide us with flexibility and agility, while maintaining rigorous credit discipline, especially under evolving market conditions Short term Medium term Longer term FY guidance Expect a return to Confident in
Slide 23: Summary
Summary Competitive edge - Proven access to diverse Track record of profitability our technology platform sources and deep pools and high quality earnings that drives a virtuous of capital driven by recurring revenue cycle of benefits (80% of total revenue) Credible opportunity to Significant growth di
Slide 24: Q&A
Q&A Property finance made simple | 24
Slide 25: Appendices
Appendices Property finance made simple | 25
Slide 26: Our revenue model drives recurring income - Buy to Let
Our revenue model drives recurring income - Buy to Let Financial Partnerships and RMBS Separate Accounts & Funds 5.19% 2.41% 1.00% to 3.00% 1.22% Property finance made simple | 26
Slide 27: Our revenue model drives recurring income - Short term
Our revenue model drives recurring income - Short term Financial Partnerships and Bonds Separate Accounts & Funds 5.15% 1.81% 3.61% Property finance made simple | 27
Slide 28: Balance sheet and limited credit risk exposure
Balance sheet and limited credit risk exposure Loans & Advances supported by interest bearing £m 30 Sep 2022 31 Mar 2022 Change % liabilities Cash & Cash Equivalents 113.3 118.2 (4%) Total credit risk exposure on loans is limited to £139 million Trade & Other Receivables 6.7 6.3 5% - Loans & other a
Slide 29: Optimising the platform
Optimising the platform Platform AuM at 30 September 2021 Platform AuM at 30 September 2022 41% of AuM off balance sheet 50% of AuM off balance sheet In line with our strategy of moving further towards an off balance sheet platform model Property finance made simple | 29
Slide 30: Strong Platform asset performance driving low provisions
Strong Platform asset performance driving low provisions Impairment as a % of Platform AuM We’re able to maintain low provisions ● An increase in the proportion of assets held off balance sheet ● Our proprietary technology enables a more detailed underwriting and understanding of risk 0.26% 0.20% ● A
Slide 31: Lending sustainably and with purpose
Lending sustainably and with purpose £1bn+ 3,000+ £750m+ £250m+ £46m of existing property ‘upcycled’ new homes built and brought to of our Buy-to-Let loans Buy-to-Let loans originated of much needed capital through upgrade or conversion market since 2015 thanks to were to properties where at an EPC
Slide 32: 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 33: lendinvest.com Property finance made simple
lendinvest.com For more information: Property finance made simple Alex Dee Head of Investor Relations alex.dee@lendinvest.com lendinvest.com 33