Vector Capital upbeat on post-float performance

Property development commercial lender Vector Capital updated the market on its trading on Tuesday, reporting that its loan book stood at £38.6m on 31 March, up from £36.4m on 31 December and £33.6m a year earlier.

The AIM-traded firm said the number of live loans stood at 69 at the end of the quarter, compared to 63 at the end of December and 56 at the end of March 2020, while the average loan size was £0.56m, down from £0.58m quarter-on-quarter and £0.6m year-on-year.

Its average loan-to-value ratio was 46% at period end, up from 44.2% at the end of 2020 but down from 57.46% at the same time a year earlier.

Vector Capital's shares were admitted to trading on AIM on 29 December, and the company raised gross proceeds of £3.1m at the time.

The board said the net proceeds had largely been deployed into new lending, and would provide the base for drawing down further on its debt facilities.

It said current trading in 2021 had been in line with expectations, with its pipeline of new loan opportunities described as “strong”.

Vector said it was now concentrating on loan book growth by enhancing its engagements with its broker network, while also introducing additional staff training programmes so that the existing team could handle increased activity.

It did not expect an increase to its headcount would be required in the current year.

Discussions had been held with the company's two wholesale lenders, Shawbrook Bank and Aldermore Bank, with both said to be “fully supportive” of the group's operations, indicating that they would be ready to increase the facilities should the company request them.

The group said it had also been approached by three other wholesale banking providers who had offered indicative terms on additional facilities.

Vector said it would continue discussions with those providers to maintain flexibility as the business grew, but its board said it considered the group's existing facilities were the “best fit” for its current requirements.

“We have continued to trade strongly since our year end and our pipeline of new loan opportunities remain at a historically high level,” said chief executive officer Agam Jain.

“We are supported by the improving property and construction sectors, the latter of which has experienced its strongest growth phase for circa six and half years, driven by the easing of Covid-19 restrictions which has led to increased activity in housing and other commercial developments.”

Jain said the group continued to be “well-placed” to benefit from those opportunities to further grow revenue, profits and dividends, adding that it was “on track” against its strategy to establish itself as the “go-to lender of choice” in its market segment.

“The board is confident of the group's continued success.”

At 1023 BST, shares in Vector Capital were up 6.38% at 50p.