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18 Jan 2021 07:00
Funding Circle Holdings plc
H2 2020 trading update
Strong end to 2020 with total income and AEBITDA well ahead of previous expectations
Embargoed until 7.00am, 18 January 2021
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014
Funding Circle Holdings plc ("Funding Circle"), today announces H2 total income of £121m and AEBITDA of no lower than £15m, well ahead of previous expectations, supported by record loans under management and originations.
Samir Desai CBE, CEO and Founder, said:
"As a result of Covid, we are seeing an acceleration in the shift towards online in small business lending. As the largest online SME loans platform we used our advanced technology to reach record levels of lending in 2020 and we are well placed to capture this enlarged opportunity going forward.
We achieved Group AEBITDA profitability in the second half of 2020. This is a significant milestone for the business and we expect to continue to be AEBITDA profitable going forward.
It has been a difficult year for many people and I'd like to thank all of our team who have worked exceptionally hard to help small businesses. Whilst we remain mindful of the uncertain economic environment, we are well positioned to help tens of thousands of small businesses in 2021."
H2 2020 trading update1
|
| 6 months to 31/12 | 12 months to 31/12 | ||||
£m | 2020 | 2019 | % | 2020 | 2019 | % | |
Total Income | Group | 121 | 96 | 26% | 222 | 177 | 25% |
United Kingdom | 94 | 59 | 60% | 153 | 112 | 37% | |
United States | 25 | 30 | -17% | 63 | 52 | 21% | |
Developing Markets | 2 | 7 | -71% | 6 | 13 | -54% | |
| |||||||
Loans under Management | Group | 4,214 | 3,731 | 13% | 4,214 | 3,731 | 13% |
United Kingdom | 3,271 | 2,583 | 27% | 3,271 | 2,583 | 27% | |
United States | 759 | 882 | -14% | 759 | 882 | -14% | |
Developing Markets | 184 | 266 | -31% | 184 | 266 | -31% | |
| |||||||
Originations | Group | 1,630 | 1,158 | 41% | 2,742 | 2,350 | 17% |
United Kingdom | 1,449 | 758 | 91% | 2,111 | 1,556 | 36% | |
United States | 171 | 308 | -44% | 581 | 619 | -6% | |
Developing Markets | 10 | 92 | -89% | 50 | 175 | -71% | |
Group
· Total income reached £121m in H2 2020, up 26% year-on year, supported by record loans under management of £4.2bn up 13% and originations of £1.6bn, up 41%.
· The loanbook continues to perform in line with the forecast set out in the first half 2020 results.
· As a result of strong trading, cost reduction actions and Fair Value in line with expectations, H2 AEBITDA profit is now expected to be higher than previous expectations and no lower than £15m.
UK
· Strong momentum with H2 total income up 60% year-on-year. Loans under management were up 27% year-on-year and originations were up 91%.
· As at 13 December 2020, we represented c.25% share of the number of CBILS loans approved since we began participating in the scheme. When CBILS ends we will operate our core lending product alongside the long term government guarantee programme previously announced by HM Treasury.
US
· In H2, total income was down 17%. Loans under management were down 14% and originations were down 44%. As anticipated, borrower demand was suppressed due to uncertainty over whether there would be further PPP lending.
· In late December additional PPP lending was approved by the US Government and we will start distributing PPP loans in January. When this scheme ends, we will continue to offer our recently reintroduced core lending product, as well as continuing to grow our referral model.
Developing Markets
· As previously communicated in Q1 2020, in Germany and the Netherlands we changed to a pure referral model and in H2 the business performed in line with expectations.
Further details will be provided in the Funding Circle annual results announcement on 25 March 2021.
1 Based on preliminary and unaudited figures
Investor Relations and media relations:
Funding Circle
David de Koning - Director of Investor Relations and Communications (0203 927 3893)
Headland Consultancy
Mike Smith / Stephen Malthouse (020 3805 4822)
About Funding Circle:
Funding Circle (LSE: FCH) is a small and medium enterprise ("SME") loans platform. Since launching in 2010, investors and lenders across Funding Circle's geographies - including retail investors, banks, specialty finance companies asset management companies, insurance companies, government-backed entities and funds - have lent more than £11.5 billion to approximately 95,000 businesses globally.
Forward looking statements and other important information
This document contains forward looking statements, which are statements that are not historical facts and that reflect Funding Circle's beliefs and expectations with respect to future events and financial and operational performance. These forward looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of Funding Circle and which may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. Nothing contained within this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of Funding Circle or its business. Any historical information contained in this statistical information is not indicative of future performance.
The information contained in this document is provided as of the dates shown. Nothing in this document should be construed as legal, tax, investment, financial, or accounting advice, or solicitation for or an offer to invest in Funding Circle.
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