LONDON (Alliance News) - GLI Finance Ltd, the AIM-listed investor in alternative finance platforms for smaller companies, on Tuesday reported an annual loss in 2015, hit by losses in the value of its platforms and higher finance costs.
The company made a loss of GBP9.5 million in 2015, versus a profit of GBP6.7 million in 2014. Included in that figure was a GBP6.8 million unrealised loss on financial assets related to the value of GLI's platforms.
Chief Financial Officer Emma Stubbs said that "in future it could be likely that we see this line increase again as the platforms grow and become more successful".
The unrealised loss related to the company's platforms came in the wake of a strategic review initiated in December, as Geoff Miller resigned as chief executive officer following an unsuccessful fundraising. Miller was replaced by Andy Whelan, the leader of GLI's Sancus platform, a provider of secured finance to smaller companies and high net worth individuals.
"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," Chairman Patrick Firth said in a statement.
On Tuesday, GLI said progress has been made against several short-term goals set out in February. Removing conflicts of interest, mainly stemming from intercompany loans and GLI's relationship with London-listed investment trust GLI Alternative Finance PLC, was one such priority.
"In the future GLI will only lend to platforms where it is of benefit to GLI's investment strategy. GLI will not lend through platforms and will seek to realise its existing such loans," Whelan said in a statement.
GLI Asset Management, the manager of GLI Alternative Finance, is now known as Amberton Asset Management Ltd. Golf Investments Ltd, a member of the Jersey-based Somerston group of companies, is set to acquire half of Amberton from GLI, subject to regulatory approval after the deal received the backing of GLI's shareholders in February. Somerston owns 13.45% of GLI Finance.
GLI Alternative Finance will lend directly to smaller businesses through lending platforms. Amberton will be able to make loans through a platform regardless of GLI Finance's relationship with that finance provider.
On Tuesday, GLI Finance revealed the "second leg" of its strategic review, which it named "Project Clarity".
Project Clarity defines GLI's main business as specialty lending, underpinning it as the "backbone" of the company, Whelan said.
The core business needs to generate surplus cash flow in a sustainable way, Whelan said, to fund investments and growing dividends.
"Where we have stakes in assets with particular complementary strengths, for example our investments in GLIF BMS Holdings Ltd and the Sancus Gibraltar and Sancus Isle of Man entities alongside our wholly owned subsidiary Sancus Ltd, we believe the whole would be materially greater than the sum of the parts," Whelan said.
"GLI has several large minority stakes in very promising assets that have excellent management teams. Our investment in these companies will flourish in due course. These assets are not in scope for 'Project Clarity'," Whelan added.
Shares in GLI were down 0.8% at 32.00 pence on Tuesday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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