Group Annual Results 2023/2024
Wednesday 12th June 2024
Growth in new business volumes has propelled Group pre-tax profits to £126m, an 8% YoY increase1. Novuna saw new business volumes reach £4.5bn, increasing 1% on the prior year despite challenging economic conditions.
The Group, employing over 2,250 staff in the UK and Europe and serving more than 1.3 million customers achieved the results despite a very flat economy, high interest rates and high inflation.
In response to these pressures, the Group focused on delivering products with high-quality customer service underpinned by investment in enhanced credit decisioning, driving new business opportunities whilst maintaining long-term relationships to drive profitability.
The increase in new business to record levels has come while maintaining the Group’s track record of building a high-quality portfolio. Despite the challenging economic landscape, the Group reported a bad debt charge as a percentage of total assets of just 0.3%. This was achieved through rigorous credit underwriting, continuous improvements to affordability assessments and enhanced investment in customer servicing.
Alongside these investments, the Group has continued to diversify its capital funding sources with its first public issue in Australia and a further public issue in Europe during 2023/24. This strategy has attracted new funds to support long term growth and the Group plans to further increase public bond issuance in 2024/25.
Key Financial Results
2024 | 2023 | |
Profit before tax (PBT) | £126.0m | £160.8m (including one off gain of £44.1m relating to Mitsubishi HC Capital UK PLC’s investment in GRIDSERVE Holdings Limited.) |
PBT growth | 8% | 24% |
New business volume | £4,523.8m | £4,479.4m |
Net earning assets | £8,153.3m | £7,586.1m |
Pre-tax return on total assets | 1.4% | 2.1% |
Bad debt charge as a % of total assets | 0.30% | 0.26% |
Cost / gross profit ratio | 61.0% | 61.3% |
Effective tax rate | 26.5% | 25.5% |
Post-tax return on equity | 8.6% | 11.1% |
Robert Gordon, CEO of Novuna, said:
“Despite a difficult trading environment, it’s been an exceptional year for Novuna. Our commitment to delivering for our customers is demonstrated by the increase in new business to record levels, and our ability to grow and retain our existing customer base, against a background of high interest rates and prolonged instability.
“At the heart of our success is our commitment to invest in our people and the technology to support our customers. Building long-term sustainable relationships that can withstand challenging market environments, whilst maintaining a high-quality portfolio.”
Notes to Editors:
1 Excluding the one-off PBT gain of £44.1m relating to Mitsubishi HC Capital UK PLC’s investment in GRIDSERVE Holdings Limited.