| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 62.05 | -20 |
| Intrinsic value (DCF) | 31.21 | -60 |
| Graham-Dodd Method | 0.42 | -99 |
| Graham Formula | 3.92 | -95 |
Develop North PLC (LSE: DVNO) is a UK-based investment company specializing in fixed-rate loans secured against land and property assets. Formerly known as TOC Property Backed Lending Trust Plc, the company rebranded in May 2022 to reflect its strategic focus on the UK property lending market. Operating in the Financial Services sector under Asset Management, Develop North primarily provides senior secured loans, bridging finance, and selective subordinated debt instruments. With a market capitalization of approximately £19.5 million, the company targets niche opportunities in the UK real estate debt market, offering investors exposure to property-backed lending with a conservative risk profile. Headquartered in Chelmsford, Develop North PLC has built a reputation for structured lending solutions since its 2016 incorporation, appealing to income-focused investors through its consistent dividend payments (4p per share). The company's loan portfolio demonstrates resilience in varying market conditions, supported by tangible collateral and a disciplined underwriting approach.
Develop North PLC presents a specialized play on UK property debt markets, offering investors stable income through its loan portfolio. The company's £1.51 million revenue and £1.17 million net income (FY2024) reflect efficient operations with minimal overhead (zero debt, negligible capex). Key attractions include a 4p/share dividend yielding approximately 8.7% (based on current share price), supported by strong operating cash flows (£1.06 million). However, the micro-cap status (£19.5 million market cap) and ultra-low beta (0.027) suggest limited liquidity and muted correlation with broader markets. Risks include concentrated UK property exposure and potential asset quality deterioration in a rising rate environment. The absence of debt provides balance sheet flexibility, but the £115k cash position limits immediate deployment capacity. Suitable for income investors comfortable with illiquidity and single-sector concentration.
Develop North PLC occupies a specialized niche within the UK property lending market, differentiating itself through focus on secured loans with conservative loan-to-value ratios. The company's competitive advantage stems from its ability to structure bespoke debt solutions for mid-market property transactions that may be too small for larger institutional lenders yet require more sophistication than traditional bank financing. Its asset-light model (no physical property ownership) minimizes operational complexity while the secured nature of loans provides downside protection. However, the company faces intense competition from both traditional banks and alternative lenders in the crowded UK property finance market. Its small scale limits ability to participate in larger syndicated deals where major players dominate. The May 2022 rebranding suggests strategic repositioning, potentially toward development finance where margins are higher but risks greater. Unlike REITs that own properties, DVNO's pure lending model offers different risk-return characteristics - avoiding property management burdens but lacking appreciation upside. The company's 0.027 beta indicates its returns are driven more by credit factors than property values, an unusual correlation profile in the sector.