Together Financial Services Limited (‘Together’ or ‘the Group’), one of the UK’s leading specialist mortgage and secured loan providers, is pleased to announce its results for the quarter ended September 30, 2021.
Commenting on today’s results, Gerald Grimes, Group CEO Designate of Together, said: “Together has maintained the positive momentum from last year with another strong performance in the quarter to 30 September 2021. Average monthly lending was up 21.9% on the previous quarter at £179m, with originations in September rising above pre-pandemic levels to £202m. This resulted in the loan book increasing by 5.4% to end the quarter at £4.2bn.
“In parallel, we have further increased the diversity, liquidity and maturity of our funding, raising or refinancing over £1.4bn since June 2021. Most recently, we refinanced the Senior PIK toggle notes and issued an additional £120 million of our 2026 bonds, in a transaction that was upsized by £20 million, underlying the quality of our loan book and the strong levels of investor support for Together.
“Following a strong recovery over the summer, UK economic growth slowed during the quarter to 30 September as Covid-19 support schemes were withdrawn, although the outlook remains broadly positive. While we have seen a spike in inflation and some commentators are forecasting that interest rates will rise from the current record lows, we are also seeing signs of a consumer recovery. As we shape our business for an exciting future, we continue to believe that Together is well placed to help increasing numbers of customers to realise their ambitions and to play our part in supporting the UK’s economic recovery.”
Financial performance: quarter ended September 30, 2021
Group loan book of £4.2bn, up 5.7% compared with £4.0bn at September 30, 2020, and up 5.4% compared with £4.0bn at June 30, 2021
Weighted average indexed LTV remaining very conservative at 52.4% (Q1‘21: 52.4%; Q4‘21: 52.1%)
Average monthly loan originations of £179.0m, up 310.6% in the quarter compared with £43.6m in Q1‘21 and up 21.9% when compared with £146.9m in Q4‘21 as the Group continued to increase lending volume
– September 2021 loan originations exceeded £202m, rising above pre-pandemic levels
– Weighted average origination LTVs remain conservative at 60.1% (Q1‘21: 56.4%; Q4‘21: 61.2%)
Interest receivable and similar income of £93.3m, down 2.2% compared with £95.3m in Q1‘21, due to a reduction in yield across the loan portfolio, although up 0.5% compared with £92.8m in Q4‘21.
Underlying net interest margin remained attractive at 6.1%, when compared with 6.4% in Q1‘21 and 6.3% at Q4‘21
Annualised cost of risk has decreased to 0.1% when compared with 1.3% in Q1‘21 due to a reduced impairment charge during the year as a result of the improved macroeconomic outlook (Q4‘21: -0.4%)
Underlying profit before tax was up 14.5% to £38.8m when compared with £33.9m in Q1‘21 and up 15.1% when compared with £33.7m in Q4‘21
Cash generation remained robust, with cash receipts of £420.8m, up 11.5% compared with £377.3m in Q1’21although down 8.2% compared with £458.5m in Q4’21, as redemptions declined following the conclusion of the stamp duty holiday
Dividend paid in Q1‘22 primarily to cash service the interest due on the Senior PIK Toggle Notes of Bracken Midco1 plc