Funding Circle saw its pre-tax losses widen to £16.6m in the first half of 2023 despite a profit in its UK business, due to investment into the US and its FlexiPay product.
The London-listed small business lender, which operates in the UK and the US, reported a pre-tax profit of £1.4m in its domestic market, up from £900,000 in the first half of 2022.
However, on a group level, Funding Circle’s losses widened from a £14.5m loss in the second half of 2022, and a £1.6m profit in the first half of 2022.
Funding Circle saw total originations rise by 14 per cent half-on-half to £771m, while total income edged up to £76.6m compared to £73.2m in the second half of 2022.
The US market continued to grow originations but posted an adjusted operating loss of £9.2m “as the US continued to implement planned investments to scale the business.”
Its FlexiPay product – a buy-now-pay-later product for businesses – reported a £7.8m adjusted operating loss due to “staff-related costs, marketing costs and expected credit losses which are required to be recognised up front on the drawn and undrawn lines of credit.”
Funding Circle maintained its guidance from March for 2023 and 2025.
“We delivered a solid set of results in the first half of the year, in line with our expectations, and once again demonstrated the resilience of the business and our aptitude at responding to the changing economic environment,” said chief executive Lisa Jacobs (pictured).
“Our UK loans business is profitable, we’ve seen good growth in US loans and FlexiPay is showing great momentum as we expand our offering to access a larger market and serve more of our customers’ needs. FlexiPay transactions have more than doubled to £90m in the half, with more than £150m transactions since launch. We have also extended our track record of delivering robust and attractive loan returns for our investors.
“We’re making good progress towards our medium-term targets and are in a strong position to grow as the economic backdrop recovers.”
Funding Circle’s shares were trading 4.5 per cent higher at 45p by late morning.