viewFunding Circle Holdings PLC

Funding Circle expects 2018 revenue to beat estimates after strong end to the year

“We enter 2019 with continuing confidence and remain focused on delivering our growth strategy set out at IPO," said Funding Circle boss Samir Desai

Funding Circle
Funding Circle shares rose 3.6% in afternoon trading

Funding Circle Holdings PLC (LON:FCH), the peer-to-peer lender that floated on the London Stock Exchange last October, said it expects full-year revenue growth to exceed its expectations after a strong fourth quarter.

The company sees revenue rising 55% in the year to 31 December 2018, ahead of the 50% increase it said it expected around the time of its initial public offering.

Loans under management at the end of the fourth quarter amounted to £3.1bn, up 55% compared to the same time a year ago and ahead of guidance. 

Total originations rose 40% to £2.3bn for the year after a record fourth quarter of £683mln, up 31% on the previous year.

Funding Circle said it continues to expect revenue growth above 40% in the medium term.

READ: Funding Circle tumbles further as official trading begins

During the period, the UK government's economic development bank, The British Business Bank, announced a commitment of up to £150mln for lending to small businesses through Funding Circle. 

Waterfall Asset Management also agreed to invest in £1bn of loans originated through Funding Circle's UK platform over a two-year period.

"We were pleased to announce a number of new institutional investor transactions in Q4, which is further validation of the attractive risk-adjusted returns generated on the Funding Circle platform," said chief executive and founder, Samir Desai.

“We enter 2019 with continuing confidence and remain focused on delivering our growth strategy set out at IPO."

In afternoon trading, shares rose 3.64% to 342p. 

The lender, which collects a pool of funds from individuals and companies that it lends out to small businesses, has had a difficult start to trading with its shares continue to trade below its float price of 440p. 

Numis recommended a 'buy' rating with a target price of 523p, citing better than expected growth. 

"We believe consistent and now improving returns in weak and volatile markets should work to attract investors to the group," the broker said. 

Quick facts: Funding Circle Holdings PLC

Price: 136.8 GBX

Market: LSE
Market Cap: £482.9 m

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