H1 AUM in line, capital headroom up, outlook slows
AUM ended H1 of FY23 (30 Sep 22) on £2.43bn, 33% up y-o-y (30 Sep 21: £1.83bn) and 13% up over the half-year (31 Mar 22: £2.15bn). While market data is not yet available to 30 Sep, it is obvious that LendInvest is continuing to rapidly gain market share.Lending products also continued to prove attractive to institutional investors. Funds under management (capital committed by investors) stood at £3.44bn on 30 Sep, up 17% over H1, which provides ample lending capital ‘headroom’ of £950m to fuel future growth.
However, LendInvest is not immune to a weaker macro-economic environment, nor recent dislocations in the mortgage market. The company has stated that it is experiencing weaker demand, has tightened credit appetite to protect investor returns, and is reducing growth in operational expenditure accordingly. More specifically, it expects buy-to-let growth in particular to slow in H2, and for full-year PBT to be in line with FY-22.
Our forecasts reduce as a result of these macro-economic headwinds and in line with company guidance, with AUM for end-FY23 now forecast to be £2.6bn (previously £3.1bn), revenue for FY23 £105m (£117m) and PBT £14m (£18.5m). As such, our fundamental valuation falls to 180p per share from 280p, but that still stands 85% above the last closing price.
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