Pepper Ireland sees revenue rise 28% as profits dip

Mortgage provider and loan servicing group Pepper Ireland recorded a 28 per cent rise in its revenues last year but its profit declined largely due to increased costs from a near doubling of staff numbers.

Latest accounts for Pepper Finance Corporation (Ireland) DAC show that its revenue rose by 28 per cent to €37.8 million in the year to the end of December 2015, after securing a number of new loan servicing mandates.

This included being appointed to provide servicing on a portion of a €540 million loan book acquired from Danske Bank, and to provide similar services on a €1.4 billion loan book acquired from Lloyds Bank.

The company made an after-tax profit of €6.3 million, which was down from just under €6.6 million in 2014.

This reduction was due to a sharp rise in administrative expenses, which increased by 40 per cent to €35 million.

Included in this figure was €21 million paid in wages and salaries, more than double the €9.9 million incurred in 2014. Employee numbers rose to an average of 308 in 2015 compared with 160 in in the previous year.

Strong pipeline

Directors’ remuneration declined by 13 per cent to just more than €1 million.

Pepper’s net assets increased to €30 million by the end of 2015, up from €19.6 million a year earlier. Its assets under management had increased by €3 billion to €14 billion by the year end.

The company paid corporation tax of €92,315 after utilising tax losses during the period, which had the effect of reducing this bill.

In terms of the current year, Pepper’s accounts note that it entered the mortgage market here in January and a “strong pipeline has been built up in the first three months of 2016”.

It has also commenced work on servicing a €5.5 billion residential loan portfolio in Ireland for Lloyds Bank in April, having secured the mandate last October.

Contracts

Commenting on the results to The Irish Times, Paul Doddrell, chief executive of Pepper Ireland said: "Last year represented another strong year for the business, with growth coming on the back of several new servicing contracts. We now have €19 billion of assets under management and have also significantly increased our headcount to over 400 people across our offices in Dublin and Shannon.

“As part of our long-term ambition, we launched a new lending division earlier this year and we continue to assess options in relation to growing this part of the business in the near future.”

Pepper offers both residential and buy-to-let home loans here, with rates from as low as 3.1 per cent and 3.4 per cent respectively.

Pepper launched in Ireland in 2012 through the acquisition of GE Capital’s Irish mortgage business and servicing platform.

The Irish business is wholly owned by a holding company in the Netherlands and is ultimately controlled by listed Australian financial services company, the Pepper Group.

The Pepper Ireland accounts note that some €4.7 million worth of shares were gifted to eligible Irish-based employees at the time of its parent company’s IPO in Australia last year. This share scheme has closed and the shares have fully vested.