Together grows loan book to £3.25bn


Mike McTighe Together

Together, one of the UK’s leading specialist secured lenders, has announced continued robust growth in its quarterly results to 31 December 2018, as the group’s loan book reached a new high of £3.25bn driven by higher lending at conservative loan to values.

Building on over four decades of experience, Together continued to grow strongly over the quarter, with monthly loan originations up 24.9% to £171.7m, compared to the same quarter last year. The Group remained highly profitable and cash generative, delivering profit before tax of £31.2m and cash receipts to £363.0m for the quarter.

Group Chairman, Mike McTighe, pictured, commented:

“Together achieved strong lending volumes in the second quarter, with our Commercial Finance and Personal Finance businesses both achieving increased levels of originations to drive the loan book to a new high of £3.25bn. We also further extended our reach into the mortgage networks and clubs during the quarter, launching our bridging products via these channels, and added additional breadth and maturity to our funding.

“With the March 29, 2019 Brexit deadline looming and the UK parliament remaining divided over the best way forward, the UK’s economic outlook remains uncertain. Lead indicators are also mixed, with weaker consumer spending and UK house price inflation forecast to slow, while average weekly earnings are up 3.4% year-on-year and employment running at its highest level since 1971. Against this backdrop, we are continuing to see strong demand for our products and we believe Together remains well placed to deliver on our continued growth plans.”

Marc Goldberg, Commercial Finance CEO, said:

“We are very proud to be announcing this strong set of results for the quarter, as we lent more to our personal and commercial customers and our loan book reached a new high of £3.25bn. Accomplishing these results would not be possible without the hard work and dedication of our 750 colleagues who continue to deliver positive outcomes and great service to our customers. The future is very exciting for everyone at Together and we look forward to continuing to grow the business and helping more individuals, families and businesses to access the finances they need.”

Pete Ball, Personal Finance CEO, added:

“Together’s strong quarterly growth is a great testament to the success of our unique model, based on almost 45 years of experience, and to our ongoing focus on enhancing our offering to deliver the best outcomes for our customers. As part of this commitment, we are very excited to have just launched Together+, a new programme offering exclusive services and support to our key packaging brokers, as we continue to expand and strengthen our relationships with our distribution networks.”

 Higher lending volumes drive continued robust loan book growth

  • Average monthly loan originations of £171.7m, up 24.9% on Q1’19 (£137.5m) and up 28.3% on Q2’18 (£133.9m)
  • Increased levels of originations in both Commercial Finance and Personal Finance
  • Group weighted average loan to value of new originations in the quarter has remained conservative at 58.9% compared with 58.1% in Q1’19 and 58.7% in Q2’18
  • Loan book reached new high of £3.25bn at December 31, 2018, up 7.9% compared with September 30, 2018 (£3.01bn) and up 27.6% compared with December 31, 2017 (£2.55bn)

Strong profitability and cash generation maintained

  • Interest receivable and similar income at £84.1m, up 2.4% on Q1’19 (£82.2m) and up 18.1% on Q2’18 (£71.2m) driven by interest earned on the growing loan book
  • Net interest margin remains highly attractive at 7.1%, in line with Q1’19 (7.2%) although down on Q2’18 (8.0%), reflecting competitive market conditions, redemption of higher yielding legacy products and changes in product mix
  • IFRS 9 net impairment charge of £3.8m, compared with £4.3m in Q1’19 and £2.6m for Q2’18 (presented under IAS 39). IFRS 9 incorporates provisions for increased economic uncertainty.
  • EBITDA increased slightly to £60.5m compared with £59.8m in Q1’19, and was up 11.4% compared with £54.3m in Q2’18
  • Profit before tax remains strong at £31.2m, up 2.8% on Q1’19 (£30.4m), although down 1.0% on Q2’18 (£31.5m) reflecting the impact of the adoption of IFRS 9, net interest margin compression and ongoing cost of investment to support future growth
  • Group remains highly cash generative with receipts of £363.0m, up 21.2% compared with £299.5m in Q2’18, although lower than  £414.7m in Q1’19 reflecting seasonal factors

Significant additional liquidity raised to support lending growth

  • Successful completion of a second residential backed securitisation, Together Asset Backed Securitisation 2018-1 PLC (“TABS 2”) completed in November 2018 for £287m

Continued investment in platform and governance

  • Richard Gregory, OBE, announced as Chairman of Together Personal Finance

Basis of preparation

  • The results for Q1 and Q2 2019 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 statement included within this report.