Funding Circle nears profitability following origination boost
Funding Circle is set to become profitable by the end of the year, following a bump in the value of its originations during the first six months of 2024.
The lender reported originated loans to the value of £692m during the first six months of the year. This represents an increase on the £471m originated during the same period last year.
Meanwhile, FlexiPay transactions grew to £226m during the six months ending 30 June 2024, up from £90m last year.
According to Funding Circle’s half year results, the firm has delivered a “strong” performance as a “simpler, leaner and profitable business with high growth”.
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Net income was £79.1m, representing a growth of 32 per cent year-on-year. Profits before tax were £0.5m, up from a loss of £2.5m in the second half of last year, and a loss of £7.4m during the first half of 2023. The company said that this reflects the profitable growth of its term loans business.
Earlier this year, Funding Circle sold its US business to iBusiness Funding in a deal worth £33m after its annual results showed a wider loss on a group level despite a “strong profit” in UK loans.
“We are delivering on the plan I laid out in March to be simpler, leaner and profitable whilst continuing to show strong growth,” said Lisa Jacobs (pictured), Funding Circle’s chief executive.
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“In May, we simplified and streamlined the business to deliver £15m annualised savings in 2025 and in July we completed the sale of our US business for a gain of £10m.
“We were profitable a half earlier than we set out in our guidance in March and are today upgrading our guidance to be profitable for the full year (versus prior guidance of H2 profitable).
“We are reaffirming our medium-term guidance of 15-20 per cent revenue growth and profit before tax margins of more than 15 per cent and continue to be excited about the long-term growth and profitability of the business as we execute against our plan.”
Jacobs added that the firm will commence a further share buyback of up to £25m following the conclusion of the existing £25m share buyback.
Read more: Funding Circle sells US arm for £33m to focus on UK
