Vector Capital posts weaker first half, announces tender offer

Vector Capital reported a cautious half-year of new lending on Friday, amid challenging market conditions, as it announced a share buyback offer ahead of its planned delisting from AIM.

The company posted revenue of £2.5m, down from £2.9m in the same period last year.

Profit before tax decreased to £0.71m from £1.3m year-on-year, largely due to lower revenue and the write-off of £0.36m in bad debts.

The company maintained a doubtful debt reserve of £0.93m.

Its loan book stood at £44.8m as of 30 June, down from £47.9m at the end of December, reflecting net redemptions and selective new lending during the period.

Vector Capital said it had decided not to declare an interim dividend for the period, due to a planned buyback of ordinary shares announced in a tender offer.

The board said the buy-back would coincide with its intended withdrawal from the AIM market.

Despite the challenging conditions in the small-to-medium enterprise bridge financing sector, with borrowers facing supply cost issues, high interest rates, and a cautious lending environment, Vector Capital said it kept its wholesale banking facilities unchanged at £45m.

The company continued to invest in staff training and development, while adhering to best practice ESG policies to support responsible lending and sustainability across its operations.

“These results are released alongside the shareholders' circular referring to a tender offer to buy back up to 11,244,385 issued ordinary 0.5p shares for 33p per share which will absorb up to £3.7m, plus expenses, as a prelude to a withdrawal from the AIM market,” said chief executive officer Agam Jain.

“This will reduce the company's ability to expand its loan book in the short to medium term, but in view of the generally challenging market conditions and limited expectations for expansion at our previously intended rate, we believe it is important to provide shareholders with the opportunity to withdraw their investment and re-invest in the market as they think fit.

“Vector is in a financial position that allows it to undertake the planned buyback and we hope to return to a growth path when market conditions improve.”

At 1053 BST, shares in Vector Capital were up 14.91% at 31.6p.

Reporting by Josh White for Sharecast.com.