Non Standard Finance : Pre-close trading update

Non-Standard Finance plc

('Non-Standard Finance' or the 'Group')

Pre-close trading update

15 January 2018

Since our last trading update on 29 November 2017, the Group has continued to make good progress, delivering strong annual loan book growth and lower rates of impairment than in 2016 in all three business divisions.

Everyday Loans, our branch-based lending business, remains the driving force behind the Group's financial performance. At 31 December 2017 the net loan book had reached £148.5m (2016: £122.4m), an increase of 21% versus the prior year. Our proven underwriting and collections processes helped to maintain tight control of impairment as a percentage of revenue that ended the year in-line with our expectations. We opened 12 new branches in 2017 and remain on course to open a further 12 new locations during the first half of 2018, increasing our network to 65 branches.

At Loans at Home, the value of our net loan book at 31 December 2017 was up by 53% to £51.2m (2016: £33.4m), driven in large part by the addition of 442 new agents that joined our network during the year. This also helped to drive customer numbers that reached 104,100 at 31 December 2017 (2016: 93,600). Whilst the phasing of loan book growth in December was such that a greater than expected proportion of revenue will be recognised in 2018, we have been pleased with the quality of the new agents and the associated increase in the proportion of quality customers now on our books (64% in 2017 versus 52% in 2016). This has helped to maintain tight control on impairment that remained in-line with our previous guidance. Our focus in 2018 will be to ensure that all of the new agencies added in 2017 reach critical mass in terms of customer numbers and that we continue to improve the quality of our loan book.

Our guarantor loans division comprising George Banco and TrustTwo, has continued to perform strongly with record lending in both November and December 2017. At 31 December 2017 the combined net loan book had increased by 35% on a pro forma basis to reach £48.2m (2016: £35.6m). Despite this strong rate of loan book growth, impairment as a percentage of revenue remained stable. In 2018 we are on course to integrate both brands onto a single technology platform whilst continuing to deliver strong loan book growth.

As at 31 December 2017 the Group had cash at bank of £11.0m (2016: £5.2m) and gross borrowings of £208.1m (2016: £87.3m) leaving total headroom on the Group's debt facilities of £51.9m.

The full year results for 2017 will be announced on 13March 2018.

This announcement contains inside information.

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About Non-Standard Finance

Non-Standard Finance plc is listed on the main market of the London Stock Exchange (ticker: NSF) and was established in 2014 to acquire and grow businesses in the UK's non-standard consumer finance sector. Under the direction of its highly experienced main board, the Company has acquired a sustainable group of businesses offering credit to the c.10 million UK adults who are not served by (or choose not to use) mainstream financial institutions. Its three business areas are: unsecured branch-based loans, home-collected credit and guarantor loans. Each business is fully licensed by the FCA and now has access to increased levels of funding and has benefited from stronger management controls; has refined its product pricing in a number of areas; has introduced new compliance protocols; and is investing in new IT infrastructure and systems.

Each of the Group's operating subsidiaries is regulated by the FCA.