LONDON, UK: LendInvest plc (LSE: LINV), a leading technology driven asset manager for UK property finance, announced that its wholly owned subsidiary, LendInvest BTL Limited has successfully completed the sale of its residual economic interest in the Mortimer BTL 2022-1 plc securitisation for cash consideration of £5.8 million.
Citi’s secondary trading desk managed the sale process and purchase for onward sale.
In line with the Group’s strategy to optimise its funds under management, while at the same time moving more assets off its balance sheet, the transaction will result in a reduction in the Group’s gross loans and advances of c.£280 million.
The transaction brings forward profit recognition for the Group from future financial years and will therefore generate a net pre-tax gain of £3.3 million for FY2023, which will largely be recognised in H1 FY2023.
The difference between the cash consideration and the Group’s net gain is driven by gross profit lost in the second half of the financial year, and the impact of no longer consolidating the Mortimer BTL 2022-1 plc entity into the Group’s results.
These brought forward profits are offset by the weaker performance in the Group’s Buy-to-Let division as a result of volatility in interest swap rates in the first half of 2022. Given the impact of the transaction on the timing of the Group’s profit recognition, the Group has adjusted its profit before tax forecast for FY2024 by £2.3 million lower and for FY2025 by £2.0 million lower.
Commenting on the transaction, Rod Lockhart, CEO of LendInvest, said: “This transaction demonstrates our proactive approach to capital management and our ability to execute capital markets transactions even in difficult markets. Investor demand and the final terms achieved further reflect investor confidence in the quality of our underwriting and our track record.”