Speaking about the results, chief executive John Goodfellow said: “It is testament to the power of our business that even with an erratic housing market, growing competition among lenders and a tighter squeeze on product margins, our total reported profit is 49% higher than at the same time last year and underlying profit before tax 27% higher.”
Financial highlights for the first six months of the year include:
At 30 June 2007
• Group assets £11.3billion
• Group pre-tax profit £107.6 million (including a one-off gain of £36 million)
• Society interest rate margin 0.76%
Year-on-year
• Group total reported pre-tax profit up 49% (underlying profit up 27%)
• Group assets up 13%
• Group mortgage balances up 15%
• Customer investment balances up 17%
Speaking about the Group’s lending operations, John commented: “Every facet of the Group is delivering sound financial results, but those with links to the house buying and lending process have performed particularly well. The Society has exceeded plan, as mortgage applications for the first half of 2007 totalled nearly 13,500, with a value of over £1.4 billion. Taking into account mortgage origination across the entire Group, this figure increases to a formidable £7.4 billion.
“For all of these loans, especially during this time of rising interest rates, it’s affordability that is key; we make every effort to ensure repayments can be met and borrowers’ homes will be kept. Our prudent approach to lending means we have one of the best records for arrears in the industry. For example, at 30 June the Society had only 15 properties in possession out of a population of 76,500 loans.
“The business of Amber Homeloans in the mortgage market has changed somewhat in recent years, as it builds on its specialist lending expertise through the purchase and sale of mortgage books. So far in 2007, the company has completed five such transactions totalling £715 million of mortgage assets.
“Our estate agency group, Connells, has used its robust business model to achieve another pleasing set of results and recently added £36 million to its profits from the sale of 5% of the shares in Rightmove, the property website it helped set up in 2000.
“Homeloan Management, Europe’s largest mortgage servicer, remains ever-expanding; it is adding to its sites in Yorkshire, Lancashire and Londonderry with a new office in Glasgow and also to its client list, with four new contracts signed so far in 2007. As a result, the value of mortgage assets the company services has continued its strong growth and now exceeds £47 billion.
“Callcredit, our credit reference agency, continues its excellent progress of 2006 - when it more than doubled its market share - into 2007. The company has built a strong reputation with key lenders for allowing them to understand new applicants’ and existing customers’ levels of debt and their ability to meet credit commitments.”
John concluded: “Our financial success for the first half of 2007 has been achieved in what is an increasingly difficult market, which makes our figures all the more satisfying. To see our profits climbing year-on-year is a testament to our business model, the scale of which makes Skipton unique in the industry and an example of modern mutuality in action. I expect, despite rising interest rates, that we will continue to progress in the second half of the year and 2007 will prove to be another successful year.”
