Together delivers solid quarterly results with the loan book reaching a new record


Together exterior

Together, one of the UK’s leading specialist secured lenders, has announced strong growth in its quarterly results to 30 September 2018, as the group’s loan book reached a new high of £3.01bn driven by robust lending at a conservative loan to value on originations of 58.1%.

Building on over four decades of experience, Together continued to grow strongly over the quarter, with monthly loan originations up 9.7% to £137.5m, compared to the first quarter last year. The Group remained highly profitable and cash generative, delivering profit before tax of £30.4m and cash receipts to £414.7m for the quarter.

Group Chairman, Mike McTighe commented:

“We maintained our strong growth momentum in the quarter, growing the loan book by 27% compared to 30 September 2017. We continued to add significant additional liquidity to support our growth plans, successfully refinancing and extending our AA rated CABS facility to £1.25bn on more favourable terms, and issuing £350m of 8.875% Senior PIK Toggle Notes as part of refinancing the existing 10.5% Senior PIK Toggle and Vendor Notes. Since the period end, we have also announced the completion of our second public residential mortgage backed securitisation for £287m.

“As Brexit negotiations enter a crucial phase, the UK’s economic outlook remains uncertain with a number of contradictory indicators. Despite these uncertainties we continue to see strong demand from customers with record levels of originations in October of £170.9m, and along with our recent work to increase and extend our funding lines, we believe Together remains well placed to deliver on our ambitious growth plans.”

Marc Goldberg, Commercial CEO, said:

“We are proud to announce Together continued its strong growth over the last quarter and delivered another great set of results. The success and continued growth of our business is a great testament to the hard work and dedication of our colleagues, who remain focused on our mission of helping customers achieve their financial ambitions. We look forward to building on the strong momentum as we enter the next stage of our exciting future.”

Pete Ball, Personal Finance CEO, added:

“We are delighted to have reached a new record during the quarter as we grew our loan book to over £3billion. A particular focus included building out our distribution partnerships with UK mortgage clubs and networks by adding two further influential mortgage networks and clubs, whilst also continuing to enhance existing relationships and strengthen broker relationships.

“Looking ahead to the next quarter, we are focussed on further enhancing our platform and extending our distribution reach to provide more customers with the products and finance solutions they need.”


Strong loan book growth driven by robust lending volumes at conservative LTVs

  • Loan book reaches new record level of £3.01bn at September 30, 2018, up 1.8% compared with £2.96bn at June 30, 2018 (Q4 ’18) and up 27.1% compared with £2.37bn at September 30, 2017 (Q1 ’18)
  • Average monthly loan originations of £137.5m, while lower than the record £153.3m in Q4’18 given lower levels of activity over the summer period, they were up 9.7% compared with £125.4m in Q1’18
  • Group weighted average LTV of new originations in the quarter has remained conservative at 58.1% compared with 56.8% in Q4’18 and 57.8% in Q1’18

Group remains highly profitable and cash generative

  • Interest receivable and similar income up 2.7% at £82.2m, compared with £80.0m in Q4’18 and up 20.8% compared to £68.0m in Q1’18, driven by interest earned on increased loan book levels
  • Net interest margin remains attractive at 7.2%, although lower than 7.5% at Q4’18 and 8.1% in Q1’18 reflecting competitive market conditions, redemption of higher yielding legacy products and changes in product mix
  • Net impairment charge for the quarter of £4.3m incorporating the recent transition to IFRS 9, compared with £4.2m in Q4’18 and £1.6m in Q1’18 presented under IAS 39
  • IFRS 9 replaces the ‘incurred loss’ model of IAS 39 with an ‘expected loss’ model. IFRS 9 therefore recognises credit losses earlier than IAS 39
  • EBITDA up 2.0% to £59.8m compared with £58.6m in Q4’18 and up 13.2% compared with £52.8m in Q1’18
  • PBT up 0.5% to £30.4m compared with £30.2m in Q4’18, although 2.1% lower compared with £31.0m in Q1’18 reflecting the impact of the adoption of IFRS 9, net interest margin compression and ongoing cost of investment to support future growth
  • High levels of cash generation maintained, with cash receipts of £414.7m up 12.1% compared with £370.0m in Q4’18 and up 29.9% compared with £319.3m in Q1’18


Significant additional liquidity raised to support lending growth

  • AA rated revolving Charles Street ABS programme successfully refinanced in September, increasing the size of the facility from £1bn to £1.25bn, improving the terms and extending its maturity to September 2023. Senior commitments increased from £1bn to £1.15bn and a further £104.5m added through two fully drawn tranches of mezzanine finance, both rated by Moody’s and DBRS
  • Successful completion of its second residential backed securitisation, Together Asset Backed Securitisation 2018-1 PLC (“TABS 2”) completed in November for £287m
  • Weighted average maturity of the Group’s debt facilities extended from 3.3 years at June 30, 2018 to 4.1 years at September 30, 2018

Refinancing of Holdco Structure extending maturity and reducing margin

  • Successfully issued £350m of 8.875% Senior PIK Toggle Notes at Bracken Midco1 as part of refinancing the existing £220m of 10.5% Senior PIK Toggle Notes held at Bracken Midco1 and £100m of 12.5% (escalating premium) Vendor Loan Notes held at Bracken Topco extending maturity from 2021 until 2023

Basis of preparation

  •  The results for the current period are reported under IFRS 9, while those for prior periods are reported under IAS 39. We have elected not to restate comparative figures. An explanation of the impact of transition to IFRS 9 is given in Notes 2 and 6 to the financial statements included within this report.