Vector Capital plc (LON:VCAP) Chief Executive Officer Agam Jain caught up with DirectorsTalk for an exclusive interview to discuss what the company does, highlights from their full year results, growth in the loan book, an attractive dividend and what we can expect from the company in the next year.
Q1: First off, can you just remind us of what Vector Capital does as a business?
A1: So, VCAP provides bridging and development loans to small and medium size property developers. To give you some examples, it’s where people might buy properties at auction, convert office buildings to residential and some ground up developments as well.
Q2: Now, you released your 2021 full year results this Monday, can you just take us through the highlights?
A2: So, we’ve increased the loan book by 27% year on year, the profit before tax has gone up by 20.4%, revenues have gone up 22% and profit after tax at a 20.3% increase.
So, all the KPI’s we’ve done quite well on and we’ll be proposing an attractive final dividend.
Q3: It does sound like a good set of results but if we just drill down a little bit, can you tell us more about the growth of the loan book to £46.3 million?
A3: In our business, we have several redemptions during the year and in order to achieve growth, we’ve not only got to cover the redemptions that we’ve receive, but then also business beyond that in order to achieve the growth.
So, at the end of 2020, we had 63 live loans at the year end, this year we’ve got 79 live loans. The average loan size has gone up from 577,000 to 586,000 at the end of 21 so we’re just doing more loans than we did in the past and there’s quite a high level of demand out there for our products.
Q4: Now, you did mention a minute ago, the attractive dividend. Can you just tell us a bit more about that?
A4: We’re distributing about 40%/45% of the annual profit this year and that will be 1.51p per share final dividend.
Q5: Just looking forward, what can we expect to see from Vector Capital in the next year?
A5: We’re hoping that we’ll carry on and produce growth on all the KPIs and returns for the shareholders on the same growth path.
Some of the executive tasks that we are dealing with is that we’ve strengthened the infrastructure so we’re quite ready now for the next two years of growth without having to have more headcount, our software platform been upgraded and we’re ready to go for growth.
We’ve appointed a new non-executive director with 30 years of banking experience to our Board and he’ll bring in a lot of talent and market expertise.
We’ll be able to engage with a few more brokers this year than we were last year because of the increased capacity and we’ll carry on working with our banking line to increase the facilities that we can get from them.
So, with all those factors together, excluding whatever happens on the macro-economic front, we’re quite confident of delivering further growth in 2022.