(Alliance News) - GLI Finance Ltd on Tuesday said 2019 results were below expectations as the revenue at its core business Sancus BMS UK fell.
The stock was trading 13% lower at 4.75 pence on Tuesday afternoon in London.
The investment company said it expects to record a net operating loss for 2019 due to the impact of the reduction in interest income, as well as slower than expected growth in Sancus outweighing the group's cost savings. However, it said that if discussions regarding a refinancing of a development loan conclude before finalisation of its audited accounts, it will deliver a net operating profit.
Revenue for Sancus BMS is expected to stand at GBP13 million, a 2.3% decrease from GBP13.3 million reported for 2018.
The loan book increased 19% to GBP199 million. However, loan book growth did not lead to revenue growth, GLI said, stating that this was as a result of the company selling down its on-balance sheet loan exposure in order to use cash assets to repay or buy back its ZDP shares.
Looking ahead, the investor in the SME alternative finance sector said it remains focused on the core asset backed lending offering across the six jurisdictions in which it operates
"Sancus BMS surpassed the GBP1 billion total lending milestone in 2019 and, with a very strong pipeline and a proprietary electronic platform, the business is well placed to build on this and take advantage of the significant growth potential in the UK and Ireland in 2020 and beyond," GLI said.
For 2018, the group posted a pretax loss of GBP23.2 million. Revenue stood at GBP13.2 million.
By Ife Taiwo; ifetaiwo@alliancenews.com
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