Distribution Finance Cap. Hldgs PLC Progressive publishes new research

TIDMDFCH

Distribution Finance Cap. Hldgs PLC

09 July 2021

 
Significant loan origination to continue 
 DF Capital's (DFC) recent Q2 trading update reported that the Group saw very strong new business 
 originations over the quarter while arrears levels remained favourable. Dealer loan facilities 
 were also at a robust level. Market dynamics which reflected record sales for many of DFC's 
 customers also included an accelerated stock turn and subsequent delays to stock replenishment. 
 The nub of this environment is that DFC's loan book reduced to GBP166m by the end of Q2 from 
 GBP193m at the end of Q1. As manufacturers work through delivery delays, DFC expects to see 
 'significant' loan origination during H2. Management also reiterates its expectation of achieving 
 monthly run-rate profitability during Q4 of FY 2021E. We adjust estimates to reflect the pattern 
 of growth in the loan book which mainly affects FY 2021E and FY 2022E through lower anticipated 
 average loan books during those years. Our FY 2023E numbers are substantially unchanged. Meanwhile, 
 the outlook is one based on a supportive market backdrop with significant lending opportunities 
 for DFC. 
 

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July 09, 2021 02:51 ET (06:51 GMT)