Distribution Finance flags higher full-year profit

(Sharecast News) - Distribution Finance Capital said on Friday that full-year profit was expected to be materially ahead of market expectations, after stronger-than-expected lending growth and low impairments in the first half. The AIM-traded specialist bank said new loan origination was expected to reach about £1bn for the six months ended 30 June, up 21% on the prior year, while its aggregate loan book was set to close the period above £915m, more than 25% higher year-on-year.

Its asset finance product also continued to gain traction, particularly in static caravans and holiday parks, with the loan book expected to reach almost £40m from £15m at the end of December.

DF Capital said portfolio quality remained "exceptionally strong", with cost of credit risk well within its target of less than 1%.

The group now expects first-half profit before tax of at least £13m, representing an annualised return on required equity of more than 17%, and said the shift towards longer-tenor lending was generating additional near-term benefits.

Chief executive Carl D'Ammassa said the group's multi-product strategy was "now bearing fruit", leaving it well placed to deliver on its FY28 and FY30 targets.

At 1230 BST, shares in Distribution Finance Capital Holdings were up 11.6% at 66.4p.

Reporting by Josh White for Sharecast.com.

See latest RNS on Investegate