Sancus Lending Group wrote £51m of new loans in the first half of the financial year as its operating loss eased from £3.3m to £1.5m.
The specialist lender posted a net loss after tax of £600,000, an improvement on a figure of £3.3m a year ago.
Sancus Lending Group’s interim results said it was continuing to make “strategic progress” against a backdrop of economic uncertainty and attributed the “materially improved” loss to an “exceptional gain” of around £1.1m on zero dividend preference (ZDP) shares.
It said the company remained “disciplined in the volume of new loans written in H1 2024 and enters H2 2024 cautiously optimistic about its new business opportunities”.
Compared to the same period last year, the value of loans written was down on a total of £57m. Sancus Lending Group said loan originations were down partly because of low market confidence in its core markets.
The group said its geographic focus was unchanged with its three core markets, UK, Ireland and offshore accounting for 36%, 19% and 45% of the loan book respectively.
It reported a £500,000 reduction in expected credit losses, compared to a charge of £800,000 in the first half of last year.
Sancus Lending Group said its 2023 results were “materially impacted by [its] need to recognise expected credit losses against historic loans”.
Its revenue increased 39% year-on-year to £7.5m, which it said reflected its fee income growth especially in the UK, as well as a “modest growth” in its assets under management to £209m.
The group said: “As we enter the second half of 2024 we are optimistic that market conditions will improve, especially in the UK, allowing us to increase our loan volumes whilst retaining our underwriting discipline.”
Hawk Lending venture taking off
It said its joint venture business with Hawk Lending, which was announced last year, had also started to write new business.
Due to the delay of the joint venture launch and the start of writing new business, Sancus Lending Group said its share of the loss from its business with Hawk Lending was £262,000. The group said it was now focused on making the venture a profit contributor.
It said the £25m Morton Family facility agreed as part of its venture with Hawk Lending was now live and it expected to use this facility in the second half of this year.
As of 30 June 2024, Sancus Lending Group has £87.75m of its loans financed by an institutional line from Pollen Street Capital, compared to £77.75m at the end of last year.
Rory Mepham (pictured), chief executive of Sancus Lending Group, said: “We continue to believe there are grounds for optimism and that with our strategic focus and progress the long-term profitable growth potential for our business is clear. Whilst the operating environment was somewhat uncertain for much of H1 2024 we are cautiously optimistic as we enter H2 2024.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
