The shares have now risen 8% since we said to buy Aldermore in our Play of the Week article on 3 March in Shares.
Costs falling to 51% of earning from 60% in 12 months and lending increasing by almost a third to £6.1 billion helped push pre-tax profit 88% higher to £95 million in 2015.
Reading-based Aldermore specialises in lending to small businesses and providing residential mortgages, which are mainly funded by deposits. From its regional offices small businesses can raise asset and invoice finance.
Strong trading in 2015 helped improve return on equity to 19.7%, up from 13.5% in 12 months. This is still impressive when compared to the 4.9% generated by Barclays, but fell short of the 20% Investec’s analysts expected.
Aldermore strengthened its capital reserves during the period to 11.8% of risk-weighted asset from the 10.4% when it floated a year ago.
The outlook is strong with chief executive and founder Phillip Monks describing the UK economy as 'resilient', which he sees as driving confidence among small business and buy-to-let landlords.