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(Alliance News) - Small-to-medium business lending platform Funding Circle Holdings PLC on Tuesday warned economic uncertainty is leading to lower loan demand.
As a result, Funding Circle now sees 2019 revenue growth 20% on 2018, from previous guidance of 40% revenue growth. In 2018, it posted GBP141.9 million of revenue, so 2019 guidance is for approximately GBP170 million.
Funding Circle has "further tightened" lending to higher-risk band businesses, which has affected volumes, but the company believes this will protect returns for investors.
Chief Executive Samir Desai commented: "The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending criteria. As a result, revenue growth will be impacted.
"We recognise this is a change from our previous guidance, but we are taking the prudent course of action for the long-term growth and development of our business. We remain confident in our aim to become the world's largest small business loans provider, helping millions of businesses to create jobs and support economic growth."
In the first half of 2019, new loan originations rose 14% year-on-year to GBP1.2 billion, with loans under management rising 37% to GBP3.5 billion. Revenue growth is guided to be 30%, with no comparable provided.
Funding Circle sees the adjusted earnings before interest, tax, depreciation, and amortisation loss margin for the first half of 2019 at around 25%, and segment adjusted Ebitda to be breakeven, with the UK "improving".
Funding Circle will be publishing interim results on August 8.
