SoMo posts rise in profits and turnover as it expands business
SoMo reported a rise in profits and turnover in its latest financial year, as it scales up its workforce to “lay the foundations for future growth”.
The bridging lender said that pre-tax profit increased to £6.4m for the year to 31 March 2022, up from £4.8m the previous year.
Turnover rose to £18.9m from £12.9m, according to documents filed with Companies House.
SoMo increased its headcount to 53 in its 2021/2022 financial year, up from 39 previously. This included 10 new hires in the IT department. Staff pay rose to £2.57m from £1.75m as a result.
Read more: Bridging the gap: Exclusive interview with SoMo’s Simon Cottrell
“The company has achieved year-on-year increases in turnover and funds lent since inception,” SoMo said in its strategic report.
“Headcount has increased significantly as we lay the foundations for future growth.”
95 per cent of SoMo’s loan book is secured bridging finance – funded by investors and lenders – and the other five per cent comprises consumer credit loans, which are funded by internal capital and reserves.
Bridging loans made up £15.3m of revenues in the year to 31 March 2022, with the book standing at £64m at year-end.
This compares to £3.6m of revenues from its consumer credit book, which stood at £3.2m.
SoMo highlighted the fact that bridging finance is “naturally exposed to volatilities in the property market” as a principal risk and uncertainty but noted that “lending is short term and risk is managed with cautious loan-to-value lending criteria”.
It said that its consumer credit lending is based on affordability.
Looking ahead, SoMo is looking to expand both parts of the business.
“Technology continues to be at the heart of the business and an in-house team has developed cutting edge technologies to deliver financial payment and loan services,” the firm said.
“Innovative solutions are enhancing and expanding both the core bridging platform and consumer credit technology and this will continue to be a focus.”
Last December, SoMo announced that 2022 was its most successful year to date. It said at the time that it was planning to launch a personal and business insolvency and bankruptcy product this year, which will be serviced by in-house insolvency specialists.
Since then, it has announced a number of record-breaking months in 2023, boosted by origination-focused promotions.
Read more: Somo reports best month ever in February