LendInvest lowers full-year profit guidance due to accounting issue

LendInvest has lowered its full-year profit guidance due to an accounting discrepancy relating to the sale of its securitised loans.

The specialist mortgage lender announced on 5 January that it would earn £12.1m from the sale of its interest in Mortimer BTL 2023-1 – a securitisation of buy-to-let mortgages.

But it has now reduced its expected net operating income (NOI) and profit before tax (PBT) for its 2024 financial year, due to “an isolated issue with the accounting advice concerning the sale”.

It said the issue relates to swap and hedge accounting assumptions that include mark-to-market adjustments and fair value hedge accounting applied as part of the derecognition calculation.

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“On the basis of the company’s revised derecognition calculation in respect of the sale, the company advises the market to reduce expectations for NOI and PBT for FY 2024 by disregarding the previously expected net gain of £12.1m,” LendInvest said in a regulatory announcement.

Guidance for the 2025 fiscal year remains unchanged and the company expects to return to profitability during the financial year.

Full-year results for the 12 months to 31 March 2024 and an update on LendInvest’s strategy will be announced next month.

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