Funding Circle has reported a £64m operating profit for the year ending 31 December 2021, beating its own guidance and sending its share price rocketing by 20 per cent in early morning trading.
The peer-to-peer lender finished the year with £91m in earnings, and set a new target to deliver total income in excess of £290m by 2025.
“2021 was a successful year for Funding Circle,” said Lisa Jacobs, chief executive of Funding Circle UK.
“We continued to deliver a superior customer experience through our world-class technology, with over 70 per cent of UK applications now receiving an instant decision.
“We are in a strong position as a business and as we look ahead to the rest of 2022 and beyond, there is a bright future ahead of us.
“A decade of R&D is now coming to fruition as we begin to empower small businesses to not only borrow, but pay and spend as well.”
The results were announced on the same day that Funding Circle confirmed that it would be closing down its retail P2P lending business. The platform temporarily paused retail lending in 2020 in order to focus on government-backed lending schemes, from which retail investors were exempt.
By the end of 2021, Funding Circle had more than £4.45bn in loans under management – a 5.8 per cent increase on 2020. Its operating income rose to £165.5m – up from £155.7m in 2020, driven by higher servicing needs. And the firm had net assets of £288m, which included £224m in cash. In 2020 net assets were £217.6m, with £103m in cash.
Cost management initiatives meant that the company’s operating expenses fell by 12 per cent last year.
However total investment income for 2021 was £41.4m – down from £66.3m the previous year. This was sue to investments being monetised in line with strategy, Funding Circle said.
Total income was £206.9m last year, down from £222m the previous year as a result of anticipated lower investment income.
Loan originations were down by 16 per cent between 2021 and 2020, reflecting the end of the coronavirus business interruption loan scheme.
Funding Circle’s share price rose from 67.1p by the end of trading yesterday, to a month-long high of 80p within an hour of the results being made public.
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