CapitalRise narrows losses as live loan book swells to £160m
CapitalRise narrowed its losses in its last financial year and saw its rolling 12-month trading income rise by two thirds to above £4m in the 12 months to November, as it targets further growth in 2024.
The prime property investment platform reported a 70 per cent increase in its live gross loan book to £160m in the year ended 31 July 2023.
“We ended our last financial year in a good position, the business has continued to grow, and we’re happy with the way the loan book has grown,” chief executive Uma Rajah told Alternative Credit Investor.
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“Investor demand has been incredibly strong and our assets under management have increased as well.
“With interest rates going up so substantially this financial year, we’ve spent a lot of time and effort making sure our loans are priced attractively to our borrowers and investors.
“Our success this year has hopefully proven that we’ve struck that balance.”
CapitalRise said that while the business made a loss overall in the last financial year, it was significantly less than the previous year, although it would not disclose figures.
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It highlighted the fact that three of the last four quarters have been profitable for the business and it expects to increase the sustainability of its profitability next year.
The platform continues to grow both its retail and institutional investor base, noting a 115 per cent increase in new Innovative Finance ISAs (IFISAs) opened on the platform between January and August 2023, compared to January to August 2022.
On the institutional side, CapitalRise agreed a £20m funding line in November 2022, and said it is in final states of talks for another funding line, which will more than double funding capacity.
Looking ahead, Rajah highlighted opportunities for the platform at a time when the prime central London (PCL) market is recovering more quickly than the mainstream sector.
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“We’re very excited about next year, having made a lot of investment in the business this year,” Rajah said.
“We’re seeing billions of pounds worth of loan enquiries and we’re excited about the ability to continue to grow and serve that customer base, as well as our investors.
“The PCL market has been in decline since the end of 2014, with prices around 18 per cent lower. The market is turning for us; we’re in a very different point in the cycle to the rest of the property market.”