Funding Circle UK (LSE: FCH) has released their Half Year 2024 results.
Funding Circle says that they delivered “a solid financial performance, stronger than expectations, and made good progress to simplify the business and deliver profitability as set out in their Full Year Results in March.”
Following Funding Circle’s announcement in March, they successfully sold their US business for “a gain on sale of £10m, with the transaction closing on 1 July.”
In addition, they simplified and streamlined “the business to deliver ~£15m of annualised savings in 2025.”
Their UK loans business is profitable and, “powered by their proprietary tech and data, provides 76% of UK applicants with an instant decision.”
They extended their track record of “delivering robust and attractive loan returns to investors, and they’re seeing strong traction and growth in FlexiPay.”
They continued to listen to customer feedback and “launched their new Cashback Business Credit Card, enabling more businesses to borrow, pay later and spend with Funding Circle.”
They’re excited about the future of the UK business and they believe they are well positioned “to grow in a large, underserved market and help more UK small businesses access the finance they need.”
As the UK’s SME lending platform, they claim to be “a strong position to continue their strong growth and back more small businesses to get the funding they need to succeed.”
Lisa Jacobs, Funding Circle CEO, says:
“We are delivering on the plan I laid out in March to be simpler, leaner and profitable whilst continuing to show strong growth. In May, we simplified and streamlined the business to deliver £15m annualised savings in 2025 and in July we completed the sale of our US business for a gain of £10m. The first half was stronger than our expectations with annual revenue growth of over 30%; 12% up on H2 2023. We were profitable a half earlier than we set out in our guidance in March and are today upgrading our guidance to be profitable for the full year (versus prior guidance of H2 profitable). We are reaffirming our medium-term guidance of 15-20% revenue growth and PBT margins of more than 15% and continue to be excited about the long-term growth and profitability of the business as we execute against our plan. We will commence a further share buyback of up to £25m following the conclusion of the existing £25m share buyback.”
Financial Summary:
- For the Continuing Group, UK Term Loan originations grew to £692m (H1 2023: £471m) and FlexiPay transactions scaled to £226m (H1 2023: £90m) underlining the strength of the business.
- Net income (Revenue) was £79.1m, 32% growth on H1 2023 and 12% on H2 2023.
- PBT pre-exceptionals was £0.5m (H2 2023: PBT negative £2.5m and H1 2023: PBT negative £7.4m) reflecting the profitable growing Term loans business funding the planned investment in FlexiPay.
- Term Loans increased profitability with PBT pre-exceptionals of £9.2m (H2 2023: £5.1m and H1 2023: £1.4m).
- Exceptional items of £2.6m related to the simplification and streamlining of the business announced in May 2024, led to a Loss before tax of £2.1m (H1 2023: £7.4m loss).
- Unrestricted cash remained healthy at £164.4m (31 December 2023: £169.6m).
- Robust and attractive returns across all products with continued institutional investor demand; c.£2bn of future funding in place.
