VPC Specialty Lending Investments (VSL) H2 2024 earnings summary

Executive summary

• Portfolio performance was disappointing in 2024, with negative net returns driven by unrealised capital losses, especially in eCommerce holdings, despite positive revenue returns.

• The company continued its wind-down, realising investments and distributing proceeds to shareholders, including an initial B-share distribution and ongoing dividends.

• Gearing was eliminated in early 2025 after asset sales, and all currency hedges were removed by year-end 2024.

• The board and investment manager remain focused on balancing early liquidity with maximising value during the wind-down.

Financial highlights

• NAV (Cum Income) return for 2024 was -20.78% (2023: -9.45%), with inception-to-date NAV return at 30.29%.

• Total shareholder return for 2024 was -40.59% (2023: -10.71%), with inception-to-date return at 2.92%.

• Net asset value per share fell to 52.71p (2023: 80.91p); share price dropped to 27.95p (2023: 66.20p).

• Discount to NAV widened to 46.98% (2023: 18.18%).

• Revenue return was £14.27m (2023: £25.62m); total net return was -£46.77m (2023: -£25.83m).

• Trailing twelve-month dividend was 7.12p (2023: 8.00p).

Outlook and guidance

• The board expects substantial NAV to be returned to shareholders in 2025 as the wind-down accelerates.

• Market uncertainty, potential recession, and new tariffs pose risks, especially to eCommerce holdings.

• Interest rate cuts by major central banks may improve fundraising opportunities for portfolio companies.

• Dividends are expected to continue declining as the portfolio is realised.