Folk2Folk reports fifth consecutive year of profitability

Folk2Folk has reported a pre-tax profit of £1.28m in its latest financial year – its fifth consecutive annual profit to date.

This compares with a profit of £1.37m during the previous 12 months.

According to documents filed with Companies House, the slight dip in profits may be down to a year-on-year rise in administrative expenses from £3.2m to £3.6m.

The peer-to-peer lending platform posted a revenue of £5.28m in the 12 months ending 31 January 2023, down 6.9 per cent year-on-year from £4.94m.

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“In 2023, despite persistent economic challenges and strong headwinds, Folk2Folk…celebrated its fifth consecutive year of profitability,” said managing director Roy Warren (pictured).

Folk2Folk is paying out dividends for the fourth consecutive year, which Warren said reflects “our ongoing financial health and commitment to shareholder value”.

However, Warren noted “continued challenges in the economic landscape, with an increased likelihood of encountering distressed borrowers”.

“While default rates are higher than we would like, our experienced portfolio management team is effectively navigating these complexities,” he added.

“We are dedicated to enhancing our credit assessment capabilities to ensure we make well informed decisions.”

Warren said that funding continues to be an impediment to growth and the platform continues to source funds in the retail market, with a particular focus on high-net-worth individuals and family offices.

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The platform’s latest accounts show that, as of 31 January 2024, Folk2Folk had share capital amounting to £21,945, and total equity of £6.14m compared with £5.15m the previous year.

Headcount at the firm ticked up to 44 last year. Total directors’ renumeration rose slightly from £302,355 to £340,865.

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