Group Annual Results 2022/2023
Thursday 22nd June 2023
- Novuna, posted record pre-tax profits of £160.8m in FY22/23, up 24% on the prior year.
- The financial provider delivered a 10.4% year on year increase in new business volumes worth £4.5 billion across its five business divisions, including consumer, business, and vehicle solutions, while net earning assets hit £7.6bn.
- A revaluation of the company’s sustainable investments alongside gains from vehicle disposals helped to offset margin pressures from rising borrowing costs to deliver a record performance.
22 June 2023 – Record new business volumes, alongside exceptional one-off gains combined with an improved portfolio quality has helped the Group post record profit before tax (PBT) of £160.8m for the 2022/23 financial year. A significant uplift of 24% from £130m the previous year and the highest in its 41 year history.
Profits grew following a strong performance led by the Group’s Business Finance and Vehicle Solutions divisions, despite contending with turbulent trading conditions and margin pressures caused by rising funding costs.
New business volumes rose 10.4% to a record £4.5bn in FY 22/23, up from £4.1bn in the previous financial year, taking net earning assets to £7.6bn, up from £6.5bn in 2021/22. The revaluation of the Group’s investment in GRIDSERVE which generated a one-off fair value gain of £44.1m, underlines a keen focus on green investment led-growth and helped boost profits. Further exceptional gains came from vehicle disposals, reflecting the continued unprecedented strength of the used vehicle market, which enhanced the Group’s performance.
During 2022/23, the Group, which employs over 2,200 staff supporting nearly 1.3 million customers, continued to invest in major system enhancements within its commercial and consumer facing business divisions, improving credit decisioning and the customer experience, driving new business opportunities. This strategy improved the quality of the Group’s portfolio whilst reducing the Group’s charge for bad debt impairment by £5.5m, reflecting the stability in the credit quality of the business undertaken.
Key Financial Results
2023 | 2022 | |
Profit before tax (PBT) | £160.8m | £130.0m |
PBT growth | 24% | 25% |
New Business Volume | £4,479.4m | £4,056.4m |
Net earning assets | £7,586.1m | £6,469.7m |
Pre-tax return on total assets | 2.1% | 1.8% |
Bad debt charge as a percentage of total assets | 0.26% | 0.4% |
Cost / gross profit ratio | 61.3% | 50.5% |
Effective tax rate | 25.5% | 21.0% |
Post-tax return on equity | 11.1% | 11.1% |
Robert Gordon, CEO of Novuna, said:
“Despite the unprecedented pressure on our margins due to rising cost of funds and continued economic uncertainty, we remained firmly committed to supporting our customers. We maintained a constant presence in market across all the sectors in which we operate and focussed on improving the experience for our customers. As a result, we delivered record results.
“By outperforming competitors in key industry sectors, and delivering exceptional service through our range of products, we’ve not only gained market share but also improved the quality of our portfolio.
“We continued to expand our workforce and invest in technological improvements to drive operational efficiencies across the Group which provides us with a strong platform for further growth in the UK and Europe in the years ahead.”