Elephant Prepares for the Future
Elephant Loans and Mortgages (ELEP) has reported its Interims this morning and from a first glance it looks like they are putting everything in place for future growth.
Elephant is a packager of Secured Loans and mortgages and following in the ever-growing trend is launching an IVA division called Debtsmashers.
Again, contrary to the problems reported by Compass, Elephant reports a 29% growth in commission income and a 75% increase in the number of agreements packaged for onward lenders.
Despite turnover going up, the group has made a substantial loss brought about by a dramatic increase in administration expenses (800k up to 1.5m). Elephant points out this is due to opening a further four branches, bringing its total number to seven, and recruiting additional staff.
Elephant feels that having direct to customer branches improves conversion rates and, to be honest, it will have to improve it significantly to cover the overheads and staff costs. It seems a strange strategy for Elephant to take on the big boys with a branch network and I guess only time will tell if they can pull it off.
Elephant says it has also signed up more affiliate partners and improved its commission rates with lenders. In October it raised nearly £1million with a share placing and says this will be spent on growing Debtsmashers.
Elephant was only admitted to Aim late last year and I’d rate it has a reasonably high risk share.
