Distribution Finance Capital Holdings Plc · LSE:DFCH
Distribution Finance Capital — FY2021 Earnings Presentation
24 slides from Distribution Finance Capital's earnings presentation, April 2022
Slide 1: Full Year Results 2021
Distribution Finance Capital Holdings plc Full Year Results 2021 April 2022
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO None of the Company’s securities have been, nor are expected to be, registered under the United States THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY Securities Act of 1933, as
Slide 3: Introductions
Introductions Carl D’Ammassa Gavin Morris Chief Executive Officer Chief Financial Officer 3
Slide 4: FY21 – proven scalability of the business
FY 21 – proven scalability of the business Record levels of new lending that more than doubles loan book……….. New Loan Origination (£m) Loan Book (£m) 690 +173% 249 253 +120% 113 2020 2021 2020 2021 …whilst improving costs profile supporting route to profitability and medium term ROE Interest Cost (
Slide 5: FY21 highlights
FY 21 highlights Transformational impact of retail deposits Award winning retail deposit franchise : delivers 6.5% NIM; ahead of target retail deposits totalling £297m (2020: £146m) from 8,033 accounts £3.8m loss, a reduction of c£10m (2020: loss £13.6m) Net assets £86.1m, driven by £40m placing con
Slide 6: Q1 trading update
Q1 trading update £ £ Record level of loan origination – c£220m (2020: £83m) and £100m in March alone Loan book reached c£302m (2020: £193m), despite on-going supply chain challenges and strong dealer sales Increased dealers to 858 and total credit facilities to in excess of £680m Arrears has contin
Slide 7: Strong demand for new lending, but ongoing pace of redemptions holds back loan book growth
Strong demand for new lending, but ongoing pace of redemptions holds back loan book growth Originating record levels …but repayments remain ...accelerating stock turn of new lending… high due to strong end-user from normal levels but early demand for product signs of stabilisation Loan originations
Slide 8: Faster loan repayments and low arrears delivers high credit quality of portfolio
Faster loan repayments and low arrears delivers high credit quality of portfolio Arrears continue to operate well ...LTV increase driven by ...and with greater economic below expectations…… higher programme origination confidence has allowed us and faster stock turn… to reduce IFRS9 overlay. Total a
Slide 9: Retail deposits transforms interest expense
Retail deposits transforms interest expense 31 Dec 2021 31 Dec 2020 Change Change 1 Gross revenue increased 18% through 12-month 12-month higher average loan balance compared to Summarised Statement of Profit or Loss £m £m £m % 2020. Gross yield improved by 20bps to Gross revenues 1 13.6 11.5 2.1 18
Slide 10: Well capitalised balance sheet supports lending ambitions
Well capitalised balance sheet supports lending ambitions 31-Dec-21 31-Dec-20 Change Change 1 Record loan originations driven by dealers Balance Sheet & KPIs % experiencing strong demand for their products Loan book - £m 1 249 113 136 120 resulted in a 120% increase in the loan book to Customer depo
Slide 11: Robust retail deposit market enables growth trajectory
Robust retail deposit market enables growth trajectory Savings Market Best Buys Deposits now exceed £297m from 8,033 accounts Raised £164m of new deposits in 2021 at an average rate of c1.16%. £ 84% of £36m maturing deposits retained £ through loyalty products and seamless online product change Infr
Slide 12: Supporting more customers in spite of unpredictable market conditions
Supporting more customers in spite of unpredictable market conditions Manufacturer Dealers Stock Turn Current experience Programmes (No.) (No.) (days) % of loan Stock Product Sector Supply chain book Dec-21 Dec-20 Dec-21 Dec-20 Q1-22 Normal* availability Demand Lodges and High - lots of holiday 24.0
Slide 13: Opportunities in core inventory finance product remain robust
Opportunities in core inventory finance product remain robust • Working through entire pipeline to prioritise highest impact opportunities and narrowing focus of prospecting We have an increasing …through a growing number activities pipeline of opportunities… of qualified dealer leads • Continuing t
Slide 14: How we further scale the business to achieve ROE ambitions
How we further scale the business to achieve ROE ambitions Core Product New Products Increasing utilisation from New OEMs in existing Support existing relationships existing dealers sectors = more dealers beyond the forecourt E.g. prestige cars, technology and parts HP, leasing, development finance
Slide 15: Technology supports our growth plan and cost efficiency ambitions
Technology supports our growth plan and cost efficiency ambitions Lending Savings Future developments • Ongoing commitment to continuous improvement that (2020:+45) (2020: 4.3) delivers efficiency and better client service • Digital on-boarding, account • Fast online application process – open manag
Slide 16: Capital Plan
Capital Plan Net assets of £86.1m, sufficient capital to support loan book to c£0.5bn Intend to prioritise British Business Bank ENABLE Guarantee scheme participation and Tier 2 to support growth well beyond £0.5bn Participation in both could unlock additional scale and organic loan book growth to c
Slide 17: 2022 - Outlook
2022 - Outlook Whilst we anticipate supply chain issues and stock turn to improve later in the year, we forecast a closing loan book in the range of £400-500m FY 22 profit/loss expected to range between breakeven and £2m loss First full year of profit now expected in FY23 Our pipeline of growth oppo
Slide 18: Appendices
Appendices Distribution Finance Capital Holdings plc | Full YearResults Interim Results2021 2021 18
Slide 19: Summarised Statement of Profit or Loss and Other Comprehensive Income
Summarised Statement of Profit or Loss and Other Comprehensive Income 2021 2020 £’000 £’000 Gross revenues 13,641 11,511 Interest expense (2,338) (9,174) Net income 11,303 2,337 Operating expenses (14,507) (15,063) Impairment charges (556) (1,294) Provisions for commitments and other liabilities 25
Slide 20: Consolidated statement of financial position
Consolidated statement of financial position 31 Dec 2021 31 Dec 2020 £’000 £’000 Assets Cash and cash equivalents 29,597 21,233 Debt securities 108,867 66,601 Loans and advances to customers 247,205 111,337 Trade and other receivables 1,133 1,154 Property, plant and equipment 99 139 Right-of-use ass
Slide 21: Consolidated cash flow statement
Consolidated cash flow statement 2021 2020 £’000 £’000 Cash flows from operating activities Loss before taxation (3,735) (13,603) Adjustments for non-cash items and other adjustments included in the income statement 1,446 2,059 (Increase)/decrease in operating assets (136,244) 96,764 Increase/(decre
Slide 22: Loan book analysis by sector (£m) – 31 Dec 2021
Loan book analysis by sector (£m) – 31 Dec 2021 Distribution Finance Capital Holdings plc | Full Year Results 2021 22 -RESTRICTED-
Slide 23: Shareholders as at March 2022
Shareholders as at 4 March 2022 Distribution Finance Capital Holdings plc | Full Year Results 2021 23 -RESTRICTED-
Slide 24: DF Capital is a trading name of DF Capital Bank Limited
DF Capital is a trading name of DF Capital Bank Limited (company number: 10198535), which is a subsidiary of Distribution Finance Capital Holdings plc (company number: 11911574) and is registered in England and Wales. Registered office: St James’ Building, 61-95 Oxford Street, Manchester M1 6EJ. DF
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