Sancus reveals £14.1m loss after Gibraltar sale
Sancus Lending Group has reported a pre-tax loss of £14.1m in 2022, following the £10,000 sale of its Gibraltar arm to co-founder John Davey.
It represents a 37 per cent increase on the previous year when pre-tax losses amounted to £10.3m.
The Gibraltar sale meant a write-down of goodwill to the value of £8.6m, in turn equating to the reported loss, according to the firm’s latest financial report.
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The alternative finance group’s results for the year ended 31 December 2022 show that group revenue increased by 11 per cent to £10m in 2022, from £9m the previous year.
Despite the increased pre-tax loss, operating losses narrowed by 117 per cent to £4.7m in 2022, from £10.2m in 2021.
The firm increased its IFRS9 provisions by 3.14 per cent (£0.4m) in 2022, compared to a £6.4m charge in 2021.
Sancus Lending Group chief executive Rory Mepham credited the marginal increase to the robustness of its credit process, due diligence, and institutional quality of its underwriting, despite inflationary and interest rate pressures. He said the IFRS9 provisions all relate to loans written in 2019 or before.
The firm also reported that the expansion of the business development team has led to an increase in the volume of new loan facilities written to £156m, versus £83m in the previous year.
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“After 18 months in my post as chief executive, the turnaround of the business is on track and we are confident of our ability to deliver profitability,” Mepham said.
“The business has undergone considerable restructuring and simplification during my tenure and we continue to be exclusively focussed on residential property lending in the development and bridging space, a market which remains underserved and offers significant growth possibilities.”
He added: “During the year, we have carried out various cost optimisation projects in an effort to ensure that every pound of cost incurred is geared towards delivering growth. We remain convinced that technological enablement holds one of the keys to our future and are pleased with both the progress that has been made to date and the further enhancements in the pipeline.”
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In January, the company announced it was closing its Guernsey and Gibraltar offices, retaining London, Dublin and Jersey.
The group’s chief financial officer Emma Stubbs will leave at the end of March when the finance function moves from Guernsey to Jersey. Tracy Clarke will be appointed interim chief financial officer for an initial period of 12 months.
Clarke has been a non-executive director of Sancus since March 2022. She is the managing director of Carlton Management Services in Jersey, which has been appointed to manage the finance function, including new technology integrations for forecasting, performance and treasury management from 31 March.
Sancus will pay Carlton £170,000 per year. The arrangement has an initial three-year term.