# Vector Capital trading in line with expectations

- Link: https://www.directorstalkinterviews.com/vector-capital-trading-in-line-with-expectations/4121123945
- Published: 2023-07-18T07:22:49+01:00
- Author: Jacob Brown

**Vector Capital Plc** (LON:VCAP), a commercial lending group that offers secured
loans to property developers and investors in England & Wales, has provided a half-
year trading update for the period ended 30 June 2023 and a loan book summary as
at the same date.

**Trading update**

As indicated in our 2022 Annual Report, 2023 is a year of consolidation where the
Company plans to strengthen its position in a lending market which continues to 
be impacted by increasing interest rates, soft property prices and persistent inflation.

Vector Capital’s strong capital base, with share capital and reserves as at 31 December
2022 of £25.1m, representing 55.4 pence per share, together with competitively priced
borrowings of £4m advanced from its parent, Vector Holdings Limited, means that 
the Company is very well placed to withstand these challenging market conditions.
This financial stability is reinforced by the Company’s excellent relationships 
with its introducer broker network and the continued appetite to provide funding
from its wholesale and specialist lender contacts. Overall, the Board is pleased
to announce that at the half year the Company is trading in line with market expectations.

Given market conditions, the Company remains cautious in assessing new lending opportunities.
However, new business enquiry levels and the pipeline remain strong, despite higher
interest rates impacting borrower affordability. Redemptions continue to be applied
in new customer advances on a regular basis.

**Loan book summary**

As summarised below, the Company’s loan book at 30 June 2023 was £49.0m, reflecting
aggregate planned redemptions of £11.8m and new loans advanced of £7.6m during the
six-month period. The overall average loan to value at the period end was 58.3%.

|  | **As at 30/06/23** | **As at 31/03/23** | **As at 31/12/22** | 
| Loan book | £49.0m | £48.4m | £53.2m | 
| Number of live loans | 103 | 102 | 107 | 
| Average loan size | £476,000 | £475,000 | £499,000 | 
| Average loan to value | 58.3% | 57.1% | 59.0% |

The Company announced on 12^(th) June that its wholesale bank debt providers increased
debt facilities by £5.0m, bringing the total wholesale bank facilities available
to £45.0m. Furthermore, that within these facilities, the Group now has the capacity
to drawdown £2.5m toward loans secured by second charges, allowing the flexibility
for cautious and selective expansion of the Group’s loan book into higher margin
loan agreements. The Group has substantial unutilised bank facilities that can be
accessed when opportune.

> **Agam Jain, CEO of Vector Capital, commented:** “We are very pleased with the
> Group’s trading performance in the first six months of the year, further details
> of which will be presented in the interim results in the first week of September.
> Our strong capital base differentiates us from many of our competitors, while 
> the extension and broadening of our debt facilities provides valuable flexibility
> in the way that we can assess new lending opportunities. High interest rates are
> now likely to be with us for a continued period, during which time we can seek
> to maximise return on our own capital and, on a selective basis, borrowed funds
> from our debt providers.”

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