VPC Specialty Lending Investments (VSL) H1 2024 earnings summary

Executive summary

• Net Asset Value (NAV) per Ordinary Share fell to 68.79p as of 30 June 2024, down from 80.91p at year-end 2023, reflecting a challenging period with negative net returns driven by unrealised capital losses.

• Total Shareholder Return for the six months was -23.32%, with NAV return at -4.76% and a dividend of 4.26p per share declared for the period.

• The company is in an orderly wind-down, focusing on realising assets and returning cash to shareholders while maximising value.

• Asset-backed lending investments remained robust, but equity investments, particularly in Wefox and eCommerce, contributed significant unrealised losses.

• A first B-share distribution of ~£11.9 million (5.12% of NAV) was made, and the dividend is expected to decrease further as the wind-down progresses.

Financial highlights

• Revenue return for the period was £12.71 million, down from £21.79 million in the prior year period.

• Total net return was -£11.03 million, compared to -£5.55 million for the same period in 2023.

• Ordinary share price dropped to 42.50p from 66.20p at year-end 2023, with the discount to NAV widening to 38.22%.

• Gross revenue return was 5.46%, offset by a gross capital return of -7.82%.

• Earnings per share (EPS) was -3.96p, compared to -2.00p in the prior year period.

Outlook and guidance

• The board expects further reductions in dividends as income falls during the wind-down.

• Macroeconomic conditions remain uncertain but are gradually improving as inflation abates; a more benign environment is anticipated.

• The company will continue to focus on maximising value from asset realisations and managing downside risk.