Following a year of change where senior management was replaced and Andy Whelan was appointed CEO of the company, GLI Finance (LSE:GLIF) has published annual results as it seeks to “materially strengthen the long term cash generation potential for GLI Finance”.
Patrick Firth, Chairman of GLI commented on the results;
“We are going through a strategic review and the remainder of 2016 and beyond will be a period in which we assist the development of the prioritised platforms to enable them to significantly scale. As the platforms become more successful, we will seek to maximise and capture additional value for GLI. There will be further examples of potential areas we can exploit over time, but we will only do so where there is a manifest and measurable benefit to our own shareholders. The outlook for the industry is exciting although there are bound to be challenges along the way, the potential for GLI Finance and its prioritised platforms is considerable and the Board and Executive team are focused on improving shareholder value.”
GLI Finance invests in, and operates in, niche or complementary SME lending verticals where they believe they can secure enduring competitive positions and take advantage of the disintermediation of lending by banks to SMEs. The short term objectives of the company as stated in the release include;
- Clarify and restate the Company’s strategic objective;
- Remove the risks of conflicts of interest;
- Initiate measures to strengthen the balance sheet;
- Ensure that positive cash flows are returned to GLI group level;
- Initiate measures to address the cost base;
- Remove unnecessary complexity;
- Rationalise and invest in the Company’s core businesses;
- Improve communication to aid stakeholders’ understanding of operations;
- Work with our prioritised platform portfolio to ensure it is appropriately financially resourced to achieve growth.
Following a recapitalization to strengthen the balance sheet, GLI said the last few years “lacked a coherent strategy” for growth. Reported loss for 2015 was £9.5 million in a period that included write-downs in the value of investments and loans at the year end. GLI stated that Loans processed by their portfolio of platforms increased in FY15 due to the addition of several platforms and “strong origination growth at many of the platforms”. The number of loans completed in the period increased by 113.4% while the average loan size decreased by 12.8%. The dividend policy was updated to pay “not less than” 2.5p per year.
On a positive note, Funding Options was recommended by the British Business Bank for the bank referral scheme.
GLI noted that it had come to an amicable arrangement with Funding Knight, a peer to peer lending platform, that GLI expects to exit at some point in the future. GLI stated an “amicable process for separation” has been agreed upon in regards to Funding Knight.
Following disposal of its CLO interests, GLI described itself as “a radically different company” with investments in many early stage companies. This portfolio will take time to mature.
GLI stated that “given that we are partway through our strategic review, we have decided to limit information on the underlying platforms whilst we consider and finalise plans for each platform. Further information will be provided to shareholders during the course of 2016.”
“2016 is going to be a year of delivering increased shareholder value whilst focusing on a concentrated portfolio of prioritised platforms and improving margins throughout the business. GLI has a unique positon in the marketplace lending sector, which with effective execution of our strategic plan, has the ability to reward shareholders for their continued support. I want to personally thank shareholders for their support.”
Detailed results are available here.
GLI Finance 2015 supplementary document to audited financials.