Novellus September 2022 Update

Novellus September 2022 Update

We are living and working through some very challenging times.

Often, the events that have the biggest step change impact in business and life are out of our control and we certainly feel this is one of those moments. 

Novellus has been growing well and in line with our existing plan. We have completed an office move, our current team has grown to 13 full-time employees and we have 5 open positions we are actively recruiting for. 

We are projected to have increased revenue by 600% from y/e 2020/2021 to y/e 2022/2023.

The business has grown swiftly, and revenues and profits have been incredibly strong. However, market conditions have been kind to us and our competitors. We believe the business will continue to thrive despite the challenging economic headwinds.

However, we are pleased that we have grown revenue in line with net profit (both will be c. 600% over the 2 year period) whilst maintaining our 100% record of no capital losses and no interest impaired. 

We are starting from a low base (that helps) and our estimated revenue remains quite modest at c. £10m but we are excited about the foundations we have laid with the recent changes that have undoubtedly made our offering materially more attractive.

Having access to fully discretionary capital without any legacy portfolio issues and with a lean and focused team gives us a great opportunity to try and grow our market share. Our current loan book sits at c. £130m but we have a strong pipeline building as a result of recent macro events. 

The certainty of our capital has become a much more significant selling point in the past few months. Our ability to pivot and deploy capital in any direction gives us a big advantage and allows us to react in real-time.

Our capital is more valuable through uncertain times and we believe this will also assist us as we look to further grow the loan book. 

Our team is now fully focused on our direct lending business with larger ambitions following the decision to wind down LendWell, a smaller bridging company we co-owned and fully funded.

The LendWell loan book is performing and all borrower terms are being honoured. In addition, for loans that meet our direct lending criteria, borrowers within the LendWell pipeline have the opportunity to switch across to a direct Novellus loan.  

The current interest rate environment and global market conditions will undoubtedly impact the Bridging market (especially within the UK). The data and shift in appetite from US capital markets will affect a large amount of institutional and what we would consider “detached capital” to pause and review the market.

This is already coming through with many lenders applying rate increases and moving towards variable pricing to mitigate some of the financing pressure they will be subjected to.

We believe this presents a further selling point for our flexible and sophisticated capital.

No sector and very few businesses will be immune to the significant headwinds but we feel fortunate to have significant capital to deploy and a group of people very capable of managing the risks associated with navigating and reacting to such a fast-moving lending environment. 

Our goal is to expand, with both our existing and new introducer relationships.

We continue to work closely with direct borrowers who we are hearing more and more from given where we are in the cycle.

We hope to grow our exposure on larger single transactions (£5m +) whilst hopefully being more active in the £500k – £5m short-term lending market.

We have the luxury of being able to fix rates and also the flexibility around pricing, term and asset class so feel we are well placed to help support borrowers through these uncertain times with many changes ahead.

Please reach out to any of the team on +44 203 397 4871 or email [email protected]