LendInvest PLC on Monday announced a profit warning due to accounting issues with the sale of its residual economic interest in the Mortimer BTL 2023-1 securitisation.

Back in January, the London-based non-bank mortgage lender had said the sale would generate a net gain of around £12.1 million before tax.

The firm in January completed the £5 million sale of its non-risk retention residual interest in the Mortimer BTL 2023-1 PLC buy-to-let mortgage loans securitisation.

The company said the formerly anticipated net gain should be disregarded, citing a revised derecognition calculation.

LendInvest on Monday warned the market to reduce expectations for pretax profit for the financial year that ended on March 31 as well as net operating income.

Back in April, the company-compiled market expectations for net operating income were £36 million for financial 2024, down 34% from £54.7 million in financial 2023. Pretax loss expectations were at £15.9 million, swung from a pretax profit of £14.3 million.

‘The issue relates to swap and hedge accounting assumptions that include mark-to-market adjustments and fair value hedge accounting applied as part of the derecognition calculation,’ LendInvest explained.

It pointed out that the adjustments have no impact on its cash position.

LendInvest will release its annual results in July.

Looking ahead further, the company kept its guidance unchanged for the current financial year ending March 31, 2025.

LendInvest shares fell 5.5% to 27.40 pence each on Monday morning in London.

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