LendInvest plc (LINV) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to LendInvest Full Year Results 2026. [Operator Instructions] I would like to remind all participants that this call is being recorded. I will now hand over to the CEO of LendInvest, Rod Lockhart, to open the presentation. Please go ahead.

Good morning, everyone, and thank you for joining us. I'm delighted to share LendInvest's annual results for FY '26. I'm joined today by Stephen Shipley, our CFO; and this time also by Daniel O'Connor, our Chief Operating Officer. Daniel has driven our strategy to simplify our business over the last 2 years, delivering efficiency and scalability through automation. Daniel also leads our business in Glasgow, where we now have more than half our people base. Over the next 30 minutes or so, we'll take you through our FY '26 results, showcasing how we continue to grow our profitability, execute on our medium-term strategy. In our results presentation last year, we focused on the transformation of the business. We talked about simplifying the group, improving efficiency and building a platform capable of delivering sustainable, profitable growth. This year, we can demonstrate how that strategy is delivering, how LendInvest is built to scale. You'll hear a recurring theme through today's presentation, simplification, not just simplification of the business itself, but we're also simplifying the way that we explain it. We've worked hard over the past couple of years to make LendInvest simpler to operate, simpler to scale and simple for investors to understand. Today, I'll start with the highlights. Stephen will follow with our financial progress. Daniel will pick up on simplification and scalability, and I'll finish with the market, the outlook and summary. Then of course, we'll be happy to take questions. We'll kick things off with a highlight of this year's progress and a quick overview of LendInvest. FY '26 was a strong year of progress across the group. We originated a record GBP 1.44 billion of lending, which was up 17% year-on-year, and that's despite the challenging underlying property market and was driven by growth in our Lending portfolio to portfolio landlords Funds under management increased 7% to GBP 5.48 billion, and we continue to attract new institutional investors to our platform. Assets under management increased 18% to GBP 3.82 billion, reflecting the growth in new lending alongside increased customer retention through product transfers and transitions through our different product types. Financial performance strengthened across all of our key metrics. Our net operating income increased 12%. Adjusted EBITDA increased 200% to GBP 8.7 million. Underlying profit before tax improved to GBP 4 million. Diluted earnings per share returned to a positive 1.6p. Lastly, we grew our net assets to GBP 72.5 million, a 9% increase year-on-year, reflecting the Group's return to profitability, the strengthening of the balance sheet and cash generation. Just as importantly, those results were achieved while continuing to reduce our underlying cost base, demonstrating the operating model is delivering increasing scalability as the business grows. Before we go any further, I'd like to spend a minute introducing the business for those of you joining us for the first time. LendInvest is the U.K.'s leading alternative property finance platform through service-led technology-enabled lending platform, we provide landlords, developers and owner-occupiers with a range of property loans backed by institutional investors. Since 2008, we've lent more than GBP 9 billion across Buy-to-Let, Residential, Short-Term and Development mortgages. Our proposition rests on 3 things. Firstly, making borrowing faster and simpler for our customers. Technology supports every stage of the lending journey, delivering quicker decisions and making a better experience for both borrowers and brokers. As I mentioned earlier, we're a service-led business, not a price-led one. And that's increasingly paying dividends in supporting our strong growth in lending and our customer retention. We're seeing increasing numbers of customers staying with us through product transfers, and we're also transitioning them between our product types. Secondly, we've got a platform that's designed for scale. As Daniel will come on to show through automation, through an efficient operating model, we are able to significantly increase lending volumes without needing to materially increase our costs. And finally, our strong track record in specialist property finance with a credit model that we've honed through over GBP 9 billion of lending means that we're trusted by institutional capital with deep pockets. Our partners include JPMorgan, Societe Generale, HSBC, Castle Lake, AB CarVal, Lloyds, BNP Paribas and more, all supporting our platform today and our future growth. Those relationships have been earned over many years through disciplined underwriting, strong governance, consistent servicing and recoveries and proven performance through the property market cycle. Funding for our lending comes from the broad range of institutional partners that I've just mentioned, alongside investors in our listed bonds and funds. The total amount of all our funding that we have committed to lending, we report as our funds under management, and this was GBP 5.48 billion at the end of March. Stephen will come on to show how this is broken down between the different partners and types and how it's grown, how it's now being simplified to support our scalability as we grow further. Every loan that we originate is serviced and actively managed by LendInvest through the life cycle of that loan. The total portfolio of all our loans managed by LendInvest, we report as our platform assets under management, AUM. This number was GBP 3.82 billion at the end of March. The difference between our FUM and our AUM is the capital available to us for funding future lending, which was GBP 1.66 billion at the end of March. Our revenue model is straightforward. When we're talking about our revenue, I'll refer to our net income, which is net of the amounts we pay to brokers and investors. And we have 2 ways of earning net income. The largest part of our net income comes from managing third-party funds. For FY '26, our total net fee income from third parties was GBP 23.7 million. Through a range of separately managed accounts, funds, we generate recurring asset management fees alongside loan servicing fees through the life cycle of the loans we manage. Alongside this, on our third-party lending, we also earn upfront origination fees. And for FY '26, these upfront fees equated to GBP 12.5 million, which was up 31% year-on-year. Our second way of earning net income comes from the loans that we've selected to retain as principal investments on our balance sheet. For FY '26, our net interest income from principal investments was up 26% to GBP 19.7 million. Again, we earn net interest income through the life of the loans that we manage and retain as principal investments. These 2 revenue streams work alongside each other to create a balanced and scalable business model. Third-party capital provides the capacity to continue growing our platform while our principal investments generate additional net interest income. We also have 2 lending divisions that we report on separately. LendInvest Mortgages, which houses our Buy-to-Let, Residential and Short-Term mortgage products and LendInvest Capital through which we provide development loans and more structured loans to larger property companies. LendInvest Mortgage division generates revenue on new lending from both third-party assets as well as principal investments. New lending for the LendInvest Capital division is focused on third-party assets. LendInvest Capital also has a legacy principal investments portfolio, which over the course of last year reduced by 20% over the period and is being actively run down. To make our revenue model simpler to understand, the detailed breakdown of our fees and interest margins by each division is now provided in our results. Our model is designed to deliver recurring revenue, capital efficiency and long-term resilience and scalability. Before Stephen takes you through our financials, I'd like to spend a moment on the key drivers of the growth of our business at the moment. On the left of this slide, you'll see 3 highlights and where we're seeing strong momentum. Firstly, for Buy-to-Let, during FY '26, we originated GBP 970 million of Buy-to-Let mortgages, up 17% year-on-year, outperforming the wider market, which we believe grew around 13% and that reflects our focus on professional portfolio landlords where we believe our service-led proposition, specialist expertise continue to differentiate us. Second, customer retention. Our Buy-to-Let retention rate increased from 35% to 56% and now also 28% of our short-term mortgage customers transition onto our long-term Buy-to-Let products. That's important. It reflects customers choosing to stay with LendInvest as their financing needs evolve, whether through product transfers or moving between different lending products. This improves the quality and predictability of our earnings and reduces our customer acquisition costs. Thirdly, short-term mortgages where we ended the year with a record GBP 113 million of offers in the final quarter. That gives us really strong momentum heading into FY '27 and again reflects the strong growing demand we're seeing from portfolio landlords. Turning to the right of the slide. Our growth engines look good on a look-forward basis, too. We entered FY '27 with the largest lending pipeline in our history. We've already delivered another record lending quarter in Q1. We had GBP 1.66 billion of committed funding capacity available to deploy in FY '27, giving us significant funding room to continue to grow without constraint. And finally, we've built an operating platform that can support materially higher lending without corresponding increases in headcount or operating costs. That's the result of the simplification and automation program we've been building and executing over the last few years, and it's something Daniel will explore in much more detail later in the presentation. We entered FY '27 unconstrained by funding and operational capacity. That gives us confidence in our ability to continue growing our business while converting more of that growth into sustainable profitability. With that, I'm going to hand over to Stephen to talk you through our financial performance in more detail.

Thank you, Rod. Rod has just talked about the strategic progress we've made. This bridge shows how that has translated into the financial performance of the business. Net interest income increased by 26% to GBP 20 million, reflecting very strong growth in principal investments, particularly in long-term lending. Net fee income also increased by 8% to GBP 24 million, driven by strong third-party originations. Together, along with loan sale gains minus a one-off bond exchange charge, that delivered net operating income of GBP 43 million, up 12% year-on-year. Excluding the one-off charge, net operating income grew a strong 16%. Importantly, we achieved that growth while reducing our administrative costs despite delivering a record year for lending. While impairments remain elevated as we continue to work through the legacy capital portfolio, stronger income and disciplined cost management delivered a reported profit before tax of GBP 3.2 million compared with a loss of GBP 1.2 million last year. On an underlying basis, excluding a small number of noncore items, profit before tax was GBP 4 million, giving a clearer view of the earnings power of the business. Now let's look at those results in a bit more detail. This slide gives a little more context around the quality of our revenue. Average principal investments increased 48% during the year, driven by 70% growth in the Mortgage portfolio, offset by a 20% reduction in the legacy capital portfolio treated as orderly rundown. The shift in portfolio mix towards mortgages, combined with the lower margin profile of the legacy capital profile, limited net interest income growth to 26% despite improved margins across the Buy-to-Let and short-term portfolios, driven by disciplined pricing and funding optimization. Net fee income on origination of loans grew 31%, driven by 16% growth in third-party originations and growth in fee income yields. Net fee income on asset management declined 14%, reflecting lower income from self-select platform and funds while average assets under management grew 9%, driving up core loan servicing fees. Operationally, the business continued to become more efficient. Excluding performance incentives and restructuring costs, underlying administrative expenses reduced by 5% despite record lending volumes. Taken together, these drivers resulted in underlying net operating income increasing 16%, underlying profit before tax improved by GBP 5.3 million and adjusted EBITDA increased 200%. These are the characteristics of a business that's not just growing, but importantly, it's improving the quality of its earnings as well. Turning briefly to the balance sheet. The balance sheet strengthened during the year and continued to support growth across the platform. Loans and advances increased 36%, reflecting continued growth in the Mortgage portfolio. This comprised 64% growth in long-term mortgages and 35% growth in the short-term mortgages during the year. Interest-bearing liabilities grew in line, driven with the growth of the Mortgage portfolio. In the year, we executed the well-priced Mortimer 25 securitization, improving margins and releasing additional funding capacity to support future lending. Unrestricted cash increased 18%, giving us good liquidity and financial flexibility. The net assets increased 9%, reflecting the strengthening of the business following our return to profitability. TNAV grew 13% to GBP 65 million with intangible assets reducing GBP 1.5 million over the period as we leverage our existing technology platform. Overall, the balance sheet remains well positioned to support continued growth while maintaining a disciplined approach to capital allocation. Turning to credit quality within our principal investments book specifically, the headline number is a 30% reduction in the impaired balances during the year, down to GBP 63 million from GBP 90 million. Just as importantly, the quality of new lending remains very strong. Average loan-to-value across the book is around 71%, reflecting the disciplined underwriting standards we've maintained throughout the cycle. Cost of risk on average principal investments in total was just 48 basis points. It's also worth distinguishing between our 2 lending businesses. Impairment remains concentrated in the Legacy Capital portfolio, GBP 3.4 million against just GBP 0.6 million in Mortgages. And that legacy book continues its orderly rundown, while new mortgages lending continues to perform well. There is an active strategy to run off the principal investments of the capital division and the portfolio reduced 20% in the year to GBP 109 million. New lending for capital is focused on third-party assets. New lending for principal investments carries lower credit risk and is less capital intensive. That combination of disciplined underwriting, improving portfolio quality and the orderly rundown of legacy assets gives us confidence in the quality of the book we're building. Access to funding for lending has become one of LendInvest's strongest competitive advantages. Funds under management has grown 33% over the past 2 years to GBP 5.5 billion. This has been driven by third-party funding growing approximately 60% to GBP 3.4 billion. Third-party funding comes from separately managed accounts, funds and Self-Select and RMBS. Going forward, the third-party model will simplify to be focused on separately managed accounts. You can see all of these together in yellow on the pie chart. Following funding for our principal investments is shown in blue on the chart. We have bank revolving facilities from SocGen, Lloyds, BNP and HSBC. These are regularly extended and are expanded as required. The SocGen and Lloyd's facilities hold long-term mortgages on a temporary basis before they are securitized or sold. We have a strong track record in RMBS, issuing under the Mortimer shelf. During the year, we completed our seventh annual RMBS, raising GBP 311 million. The transaction was our best price deal since 2021. The bank facilities are supported by finance from our listed bonds that are structured as a GBP 1 million Medium-Term Note Programme. We completed our fifth bond raise during FY '26 and our sixth bond raise completed post period end, raising GBP 72 million and GBP 25 million, respectively. To simplify our funding post period end, we have paid down our other mezz lenders. This included our most expensive debt, debt paying 8% over SONIA has been replaced with bonds at a fixed 8% as well as simplifying our financing, paying down the debt will support the simplification of our corporate structure, allowing us to close 4 subsidiary companies. Institutional investors continue to increase their allocations to LendInvest because of the platform we've built, the quality of our underwriting and the governance standards we've consistently demonstrated. We see this as a significant competitive advantage. And with that, let me hand over to Dan.

Thank you, Stephen, and good morning, everyone. Stephen has taken you through the financial results. So now over the next few minutes, I'll explain how we are building an operating platform that's capable of sustaining them. And because the numbers aren't the product of a business that's been working harder over the last 2 years, they're the product of a business that we are deliberately making simpler and more efficient. Two years ago, we set out to remove complexity from how we operate, fewer handoffs, fewer manual steps, more automation and a leaner organization overall. Today, I'll take you through 3 things: the operational evidence that it's working, the financial result that it's producing and where we will take it next. Let me just start with the shape of the platform itself. In FY '26, we originated a record GPB 1.4 billion of lending and grew assets under management 18%, and we did it with fewer people and lower costs than the year before. Average headcount came down 5% to 192 and underlying administrative costs also fell 5%. So that's record volumes, record assets and a falling cost base, meaning our originations per colleague are up 24% year-on-year and ultimately is clear evidence of the operating leverage that we've been building in the business. It's the result of deliberate choices and focused execution for us. Processes redesigned, workflows automated, technology embedded throughout the lending journey and operational center of excellence concentrated in our Glasgow hub, which, as you can see here, has successfully scaled to over 50% of our office-based colleagues, up from 35% a year ago. And the year finished really strong for us, too. And Q4 was a record quarter at GBP 450 million of lending, including our highest-ever month in March. And just to give you a sense of what that efficiency makes possible for us, our Buy-to-Let underwriting team of 6 can process over GBP 500 million of applications per quarter. And that's the technology doing the heavy lifting so our people can focus their time where judgment matters and all within the same underwriting discipline that our funders have come to value from us. Importantly, though, efficiency hasn't come at the expense of our customers and broker partners. Our customers continue to rate, as you can see here, 4.6 on Trustpilot. And our Buy-to-Let retention, as Rod pointed out, has improved from 35% to 56% as we invested in making our product transfer journeys easier for brokers and borrowers and more efficient for us to process. So that's efficiency and service quality both rising together and ultimately proof of the model -- proof that the model is working. The operational improvements that we've talked about are, of course, important in their own way, but they need to translate into stronger financial performance, and this chart shows that they are. Index from FY '24, our underlying net operating income, the line in gold at the top has grown 16% year-on-year to GBP 45 million, while underlying administrative costs, the dark line at the bottom, have fallen 5% to GBP 33 million. So that's income up, costs down, delivering positive jaws of 21 percentage points between FY '25 and FY '26. The key point here is that these 2 lines are structural, not cyclical. The income line is driven by growth in our lending, growth in our assets under management and retention and the cost line is held down by the simpler operating model that I've described. So in short, as lending grows, we convert more of that growth into earnings rather than adding costs alongside it. So let me finish just by bringing it all together, where simplification has come from and where it goes next. There are 4 phases on this slide that all build on each other. So starting first with the organization. We've simplified our structure, we've automated processes and workflows, and we've built a leaner operating model, all while maintaining a top-tier service proposition. And that's the phase that enabled the progress that you've seen to date. If I move across to servicing, during FY '26, we took the strategic decision to move loan servicing in-house onto the AI-enabled Prism platform and implementation on that is underway in FY '27. And that will deliver reduced complexity, streamlined processes, a step change in our customer experience and a roughly 40% reduction in annualized servicing costs under the new operating model and also leveraging economies of scale alongside our Glasgow operational base. Turning to the platform itself. We are rationalizing our corporate entity structures. We're closing the subscale Self-Select platform, and we're simplifying our technology estate and our data foundation. Individually, these are unglamorous, but together, they remove cost, risk and regulatory drag from the business, and they matter for what comes next, which brings me to the fourth phase, Agentic operations. This isn't a standing start for us. We're already using AI day-to-day in the business, for example, in enabling our sales teams with credit and underwriting guidance, supporting our people and managers, navigating HR policy and in lifting engineering productivity within our technology capability. But the next step for us is to deploy it deeper into the platform. And everything I've just described, a simpler business on a clean technology and data foundation is exactly what lets us do that safely and at scale, starting with underwriting, moving across our operations and financial functions and in how we build and ship products moving forward, but always with experienced people in control of decisions along the way. We're being very deliberate in our approach here. This is measured -- governed adoption in our regulated business, but the foundations that we're laying now are what make it possible. So taken together, this is the business that Rod described at the start, simpler to operate, simpler to scale. And the threat through all 3 phases is the same. Cost to serve falls as lending scales. And that's why the widening jaws that you saw in the previous slide aren't a one-off. The operating leverage in the business is built to compound from here. And with that, I'll hand back to Rod to talk about the next phase of growth.

Thanks, Daniel. I'm going to start with the property market. This is a tough property market. Interest rate swap volatility and the drift up in rates since the start of the Iran war have led to an increase in mortgage rates. This, in turn, has impacted the underlying property market. Transaction volumes have slowed and sales periods have increased. At the end of last year, we were seeing early signs of a pickup in housebuilding from SME housebuilders. This has now dissipated as fears over interest rate rises and construction cost inflation have really emerged alongside those anticipated longer sales periods. Now consequently, construction starts remain at the very low levels we've seen over recent years. The Buy-to-Let market has been impacted, too. The Renters' Rights Act, in particular, is having an impact on the market. Some landlords are deciding that it's now too difficult to be a landlord in the U.K. and the selling. But despite all of that, we're seeing portfolio landlords using this market disruption as a buying opportunity. These portfolio landlords are our core customers and increasingly where we are focused. This segment is where we see the least competition from mainstream banks and where our products best suit those landlords needs. Given this dynamic, we're growing our Buy-to-Let lending faster than the wider market. And increasingly, we're seeing these landlords borrow from us on short-term mortgages. They then complete refurbishments and let the property and then refinance with us onto that long-term Buy-to-Let mortgage with us. So 28% of our short-term mortgages now refinance onto our own long-term Buy-to-Let mortgages. The other dynamic that will support lending volumes, in particular, in the coming year is the high number of loans that are now coming to the end of their 5-year fixed rate term periods. These will be reverting from low rates to materially higher rates, and we have a product suite that is designed for those customers. We have a range of products demands to support that dynamic. So while there is without doubt significant disruption in the property market, our lending pipeline is good. We're also seeing disruption on the capital raising side of the market, too. Earlier in the year, MFS, a short-term mortgage lending business failed amid accusations of large-scale fraud. This has rocked banks and credit funds who are rumored to have lost GBP 1.3 billion in that failure. That's driven a bifurcated market where some lending platforms are now finding it difficult to access funding and others are benefiting from a flight to well-governed audited platforms with transparent reporting. Prior to the failure of MFS, our largest funder had completed an independent double pledging review that confirmed every loan in our portfolio was uniquely allocated. And that has provided some additional comfort to our funders over the course of this year. This environment is playing directly to one of LendInvest's strengths, and we're actually finding that we're being offered debt terms today at lower margins than we were 12 months ago. Lenders to specialist lending businesses like us are now competing on lending to fewer platforms. So they're competing harder to win those customers. Turning to outlook. We entered FY '27 with our largest lending pipeline to date, strong committed funding capacity in place and a highly scalable operating model as Daniel just described. On the lending environment, Q1 '27 was another record quarter for us. We do anticipate a drop in lending in the quarter that we're now in as higher swap rates following the events in the Iran war feed through into customer demand. But despite that, we are confident of delivering against our growth ambitions and do expect to be in line with analyst consensus for FY '27. Our medium-term ambition is unchanged, disciplined growth, continued operational efficiency, further compounding of our profitability, executing against the ambition we set out in FY '25 to double our lending. I'm going to start -- finish where I started. The business today is fundamentally simpler than it was a few years ago. We've simplified how we operate, how we deploy capital and how we generate revenue. This creates a powerful compounding effect. Borrowers choose LendInvest because of the service we provide. More of them return to us and transition across our products. That improves our credit models, further sharpens our underwriting. Strong portfolio performance gives institutional investors the confidence to commit more capital, more capital supports more lending, more lending increases our assets under management and our revenue. And because the platform is becoming increasingly scalable, our income grows faster than our cost, increasing our profitability. That's the operating leverage that you've seen throughout today's presentation. We don't believe it's a one-off. It's a structural characteristic of the platform that we're continuing to build. With that, thank you for listening, and we'll now open the call to questions.

We will now open for Q&A and we will begin with conference line questions. [Operator Instructions] And there are no questions on the conference line. I will now hand over to Chris Semple to read out any written questions submitted via the webcast page.

Thank you. We don't have any questions at the moment. So we'll just hold it for a couple of minutes and see if any come in. Okay. A couple came in. Let's go for Abid first with Panmure. A double- pointed question. First one, operational leverage. Full year '26 showed real operating leverage as volumes scale further. How much more assets under management can the current platform carry before you need to add cost? And where does that take the cost/income ratio to? Second part, funding step change. I think you're entering full year '27 better funded than at any point in the past with a large pipeline. How much incremental origination does that unlock? And how quickly do you want to convert the pipeline into lending? And a third point, interest rate sensitivities. Can you talk through your sensitivity to swap rates? I don't think there's a margin sensitivity, but a potential demand sensitivity. Rod, do you want to kick this one off?

Yes. Chris, you're going to have to remind me of the second and third question. I have written the first one down, and we'll start with the first one first. I'm actually going to break that first question down into 2 component parts. The question was around the operational capacity without increasing cost and also included a question and a reference to where we think cost to income will get to over the course of the next 12 months. I'm going to let Daniel lead on the first part of that question and let Stephen pick up the second part. But I will say that -- you've seen through the presentation that we stressed that we do think we will continue to grow our lending during the course of this year. We have GBP 1.66 billion of capacity -- funding capacity to lend, which, I guess, gives you some idea of the sort of growth ambition that we have for the year that we're now in. But Daniel, perhaps you could talk to how we're sitting from an operational capacity perspective, and then Stephen can pick up on the cost to income.

Yes, sure. Thank you, Rod, and thank you for the question. I think how we think about the operating leverage in the business, I mean, as I touched on earlier, our team of 6 underwriters being able to do over GBP 500 million of applications and translating that effectively a single underwriter and the team is worth based on our current conversions in the business, around GBP 150 million plus of originations per year. So hopefully, what's clear there is that a high gearing ratio that means that we can continue to contend with a lot more volume into the business. We've very successfully ran ahead of the volume growth over the last 2 years, and I see that continuing into the year ahead. We are as ambitious to continue to grow our lending, and we have the operational capacity to drive a similar level of growth this year already in the business. And hopefully, as I've covered earlier, as part of our simplification program, we'll be continuing to deliver efficiencies that will allow us to run for as long as we can ahead of that. So I'm confident that we will still see us adding minimal cost along the way to drive similar levels of growth that we've seen in the last couple of years.

Yes, do you want to pick up on the cost to income and how we see that progressing during the course of the year?

Yes. So I suppose 2 pieces there. Obviously, Dan has refers to simplification. He's also referred to in-house servicing. So that's the cost side. We are also optimizing the income side, and we're reducing our cost of funding. So that helps our income growth. So we think that we can continue to drive down our cost-to-income ratio at a good speed. We're looking at making similar levels of improvement as we have done over the past year. So we should be looking towards sort of under 80% cost-income ratio, and we form the view that we can continue progress in outer years as well because we still have an ability as well to leverage the fixed cost base that we've got. And we've also got, obviously, the move to source our originations servicing in Glasgow rather than through London. So we have a number of sort of tailwinds that will improve our cost-income ratio over time.

Great. Chris, can you remind me of the second and third -- maybe just one at a time, the second question and then...

Yes. Second question. Funding step change. I think you're entering full year '27 better funded than at any point in the past with a large pipeline. How much incremental origination does this unlock? And how quickly do you want to convert the pipeline into lending?

A very good question. So the figure that we reported on the presentation is this GBP 1.66 billion of funding available for new lending. I guess when you look at what we lent last year and you look at the GBP 1.66 billion, the difference between the 2 is roughly a growth rate, not too dissimilar to the growth rate that we delivered going from FY '25 to FY '26. So I think that sort of gives you some idea of the ambition and capacity that we have for the year. I would also say, though, that we can access capital as required. So I don't see that being a limit on our growth during the course of this year. And I think Stephen alluded to doing a securitization of assets in the next quarter, which will further increase our capacity. So I think -- I don't see funding being a constraint this year.

And then the last part from Abid was on interest rate sensitivities. Can you talk through your sensitivity to the swap rates? I don't think there is a margin sensitivity, but a potential demand sensitivity?

I think that's a fair assumption. And we've worked very hard over the last few years to really strengthen our hedging processes and we're comfortable that those processes are robust, and we've seen evidence of that given the rate shock in the first part of this year. Of course, in a higher rate environment, less people decide to buy and invest in property, but there is a direct linkage there. So I do think there is an impact as rates increase on the underlying transactions in the market. But Stephen, why don't you comment on the rate risk within the business itself?