John Maltby, Chief Executive Kensington Group plc said: “Building on our recently reported 46% increase in profits at the half year, we are pleased to announce the launch of a new lender – Money Partners Ltd (MPL). MPL will be an equity partnership between Kensington and an experienced management team and we expect the initiative to add significant, incremental first and second charge mortgage business to Kensington, broadening access to the high growth UK non-conforming market and maximising the value from our established expertise in this area.
Kensington’s Finance Director, Simon Kingdon, will be moving to MPL as Finance Director and will be resigning from the Kensington Board on 1 October 2004 to take up his new role. Whilst we are sorry that Simon will be leaving Kensington, we are delighted that he is joining the Board of MPL and that our partnership will benefit from his extensive experience. Simon will continue in his current role with Kensington until 1 October 2004 and the recruitment of a new Finance Director is underway””
MPL – A new force in the UK specialist mortgage market
- MPL is an equity partnership between Kensington and an experienced and respected senior mortgage team to establish a new non-conforming mortgage lender.
- MPL will offer a new range of first and second charge mortgage products via UK mortgage introducers that do not currently recommend Kensington products. Kensington will acquire the loans originated by MPL. It is expected that over 75% (by value) of the mortgages sold by MPL will be first charge mortgages. The second charge mortgages are expected to have a weighted average Loan to Value (LTV) of below 75% and a maximum of 90%.
- The combination of the MPL team’s proven business origination pedigree with the strength of Kensington’s funding and mortgage servicing capability will bring a powerful new force to the UK specialist mortgage market.
Simon Kingdon to join MPL as part of an experienced and proven team
- David Johnson (ex igroup Managing Director) will be MPL Executive Chairman and Philip George (ex Managing Director of First National) will be a non-executive director. The senior team at MPL will be completed by experienced and respected senior mortgage professionals.
- Kensington will have representation on the board of MPL and key decisions about the business will require the agreement of Kensington.
- Simon Kingdon (Kensington Finance Director) will be joining the team as MPL Finance Director. Simon will continue in his current role with Kensington until 1 October 2004 and the recruitment for a new Finance Director is underway and an announcement regarding the position will be made as soon as possible.
- Mr Kingdon has been with Kensington since 1997 and has played an important role in a number of key milestones including the development of its successful securitisation programme, flotation of the company in 2000 and the acquisition of TML Financial Solutions in 2002.
Kensington’s investment is targeted to show positive shareholder return
- Kensington will make an initial modest investment of less than £1m to acquire a minority stake in the business and will also provide debt of up to £2m to the venture to support the start-up and anticipated rapid development of the business.
- Kensington has the option to acquire the remainder of the equity over the next four years.
- Kensington will not only benefit from the profits generated by MPL but also from the income generated by the loans acquired from MPL.
- It is expected that due to start up costs the venture will dilute Kensington’s eps in 2004 by 1-2p but will be earnings neutral in 2005 and strongly earnings enhancing from 2006 onwards.
