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P2P recognises 2017 as a year of change

P2P recognises 2017 as a year of change – P2P Global Investments (P2P) has announce a change of management structure in its 12 months results to 31 December 2017. In the report it can be noticed that the NAV per share fell from last year but the discount reduced and the dividend rose, despite being uncovered.

Performance

The company delivered a NAV return of 3.03 per cent (2016: 4.10 per cent) and paid dividends of 47.0 pence (2016: 44.5 pence) per ordinary share in relation to the 2017 calendar year.  US consumer loans reduced from 55.0% to 22.8% whilst secured lending  increased from 5.1% to 23.8%. The cost of debt has fallen to 1.9% from 2.6% over LIBOR as a result of refinancing during the year.

Dividend uncovered

As with 2016, the dividend payments were not fully covered by earnings and the special distributable reserve was utilised. The dividend return was 4.7 per cent (2016: 45 per cent).

2017 was a year of change

In the chairman’s statement, Stuart Cruickshank observed that very early in the year the board identified that the company was not meeting its stated investment objectives. The board elected to take decisive action and instigated a review of the service provided by MW Eaglewood Europe LLP (“MWE”), the incumbent investment manager. The board conducted a detailed and robust review process in the first half of 2017. The board concluded the process by selecting a joint proposal by the existing investment manager and Pollen Street Capital Limited (“Pollen Street”) for the continued management of the assets of the company, with MWE being renamed PSC Eaglewood Europe LLP. The outcome was considered the optimal solution to retaining the experience and knowledge of the existing investment manager and introducing a revised investment strategy to improve the performance of the Company. Pollen Street and MWE subsequently merged in September 2017.

“While the performance from the inherited portfolio continues to be more volatile than expected, the Investment Manager has made substantial progress in repositioning the portfolio towards secured assets, a programme which will continue into 2018.”

Outlook

The board is optimistic that the changes put into place during 2017 have positioned the company to see improved performance in 2018. The new investment strategy is gathering traction and is on course as the chairman wrote in his statement. The board will continue to be vigilant on the performance of the company and will monitor the progress of the new investment strategy.

The board continue to closely monitor the political and economic uncertainty created by Brexit. Although current market conditions remain benign, the longer-term economic outlook and impact of Brexit on our customers and wider markets remain uncertain.

The regulatory framework remains an ever present factor as consumer credit regulation continues to develop. Developments in these areas have the potential to require changes to the way the industry transacts business, but the board welcomes oversight which encourages good customer outcomes.

P2P : P2P recognises 2017 as a year of change

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