NewDay BondCo plc

6 November 2023

NewDay BondCo plc

Group results for the nine months ended 30 September 2023 

The information in this announcement relates to the consolidated financial results of NewDay Group (Jersey) Ltd (“NewDay”, together with its subsidiaries and subsidiary undertakings, the “Group”) - a wholly owned subsidiary of Nemean Topco Limited and indirect parent company of NewDay BondCo plc. As a result, it excludes the financial results of Pay4Later Limited (trading as Deko).

NewDay, a leading digital consumer credit business in the UK, has today released its financial results for the nine months ended 30 September 2023. Details can be found on the Group’s website at www.newday.co.uk/investors with the Q3 report attached to this announcement.

Highlights

• Underlying Profit Before Tax for the nine months to 30 September 2023 of £150 million (Q3 YTD 2022: £152 million) and £202 million over the last twelve months
• New account growth in the nine months to 30 September 2023 was 308k, reflecting continued caution in the acquisition of new customers (Q3 YTD 2022: 1,001k). The prior year comparative was significantly boosted by the onboarding of more than 420k John Lewis & Partners (‘JLP’) customers in an assisted transfer programme
• Gross Receivables increased by 14% to £4.2 billion (Q3 2022: £3.7 billion) and customer spend increased by 98% to £11.1 billion (Q3 YTD 2022: £5.6 billion). The spend increase reflects the transactional velocity in the JLP programme
• Underlying Risk-Adjusted Margin reduced to 11.0% (Q3 YTD 2022: 12.8%) primarily due to the mix effect of including the largely prime JLP portfolio
• Underlying Cost:Income Ratio was 31.2% for the nine months to 30 September 2023 (Q3 YTD 2022: 29.1%, H1 2023: 32.0%), reflecting significant growth in cost of funds with operating costs controlled despite higher servicing costs from the JLP programme
• Senior Secured Notes due 2024 were fully repaid. Corporate debt was reduced by £87 million over the last twelve months
• Funding and liquidity position remains strong with £1.8 billion (Q3 2022: £2.3 billion) of headroom and £5.9 billion (Q3 2022: £6.0 billion) in total committed facilities
• The business continued to generate good levels of cash. As at 30 September 2023 cash held outside of securitisation structures(1) was £70 million (Q3 2022: £95 million)

Notes:

(1) Excludes cash held for specific funding activities

Commenting on performance for the period, John Hourican, CEO said:

“Against a challenging macro-economic backdrop and funding environment, the business continues to make steady progress. Our caution in new business acquisition, our continued underwriting discipline and our focus on cost control have resulted in consistent levels of profit and good cash generation, allowing us to fully redeem the 2024 Senior Secured Notes and significantly reduce group leverage. 

“Risk in the book has further moderated since H1 and we continue to deploy tailored strategies to support our customers. 

“We remain focused on delivering against our strategic objectives, including building leading technology solutions in support of outstanding customer experience.”

Summary of financial performance

Selected Alternative Performance Measures and Operational Metrics

Notes:

(1) Reflects FX hedged view which has also adjusted the prior year comparator.

(2) Represents Ratio of net corporate senior secured debt to adjusted EBITDA excluding funding overlaps for LTM ended 30 September.

(3) Represents Ratio of adjusted EBITDA to cash interest expense for LTM ended 30 September.

Enquiries

Investor Relations Email: investor.relations@newday.co.uk

Media Powerscourt Email: newday@powerscourt-group.com

Results presentation

A webcast for analysts and investors will be held at 10:30am (UK Time) on 6 November 2023. For video / listen-only, and to ask written questions please access via:

https://www.lsegissuerservices.com/spark/NewDay/events/588754d6-13b8-472f-a7e8-3a560faf7ec8

If you wish to ask a question, please access the presentation via Zoom with the link below:

https://newday-q3-results.open-exchange.net/registration

The presentation can be found at: www.newday.co.uk/investors

About NewDay

NewDay is a leading provider of unsecured consumer credit in the UK, providing technology-enabled, highly flexible and innovative products directly to consumers and via its merchant relationships. The Group’s product offering includes credit cards and digital revolving credit incorporating BNPL and instalment finance functionality.

NewDay operates multiple direct-to-consumer products through well-known brands such as Aqua, Fluid, Marbles and Bip – the UK’s first digital only credit “card”.

In its Merchant Offering business, NewDay offers white-labelled credit cards in partnership with well-known brands such as John Lewis and Argos. NewDay also offers Newpay, a flexible digital finance offering incorporating BNPL and instalment finance. NewDay’s prime and near-prime underwriting capability and over 20 years of experience allow it to responsibly say yes to more customers in the UK, making NewDay a merchant partner of choice for leading brands.

NewDay has a clear purpose: to help people move forward with credit. It provides c.3.9 million customers with responsible access to credit. NewDay’s leading, highly scalable digital platform alongside its proprietary credit decisioning capability allows it to continually innovate within the UK consumer finance sector, unlocking competitive advantage and developing products that meet customer and merchants’ changing needs.

Important disclaimer

Certain financial data included in this report consists of ‘non-IFRS financial measures’. These non-IFRS (International Financial Reporting Standards) financial measures, as defined by the Company, may not be comparable to similarly titled measures as presented by other companies, nor should they be considered as an alternative to the historical financial results or other indicators of the Company’s cash flow based on IFRS. Even though the non-IFRS financial measures are used by management to assess the Company’s financial position, financial results and liquidity and these types of measures are commonly used by investors, they have important limitations as analytical tools, and you should not consider them in isolation or as superior to or substitutes for analysis of the Company’s financial position or results of operations as reported under IFRS. These non-IFRS financial measures have not been audited. The inclusion of such non-IFRS financial measures in this report or any related presentation should not be regarded as a representation or warranty by the Company, any member of the Group, any of their respective affiliates, advisers or representatives or any other person as to the accuracy or completeness of such information’s portrayal of the financial condition or results of operations of the Company and should not be relied upon.

Certain statements included or incorporated by reference within this report may constitute ‘forward-looking statements’ in respect of the Group’s operations, performance, prospects and/or financial condition. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements express the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “aim,” “anticipate,” “believe,” “can have,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “project,” “should,” “target,” “will,” “would” and other words and terms of similar meaning, the negative thereof or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. No responsibility is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this report should be construed as a profit forecast.

The information contained in this report should be considered in the context of the circumstances prevailing at the time and will not be updated to reflect material developments that may occur after the date of this report. The information and opinions in this report are provided as at the date of this report and are subject to change without notice. None of the Company, any member of the Group, any of their respective affiliates, advisors or representatives or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection with this report, or any action taken by you or any of your officers, employees, agents or associates on the basis of the information in this report.

This report does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in any member of the Group, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto. Statements in this report reflect the knowledge and information available at the time of its preparation. Liability arising from anything in this report shall be governed by Jersey law.