Funding Circle (FCH) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 performance with 32% revenue growth year-over-year and 12% sequentially, reaching £79.1m in revenue and £0.5m profit before tax, ahead of guidance, driven by robust UK Term Loan and FlexiPay expansion and operational streamlining.

• Completed sale of US business for a £10m gain, focusing on UK operations and cash generation, and initiated a restructuring program targeting £15m annualised cost savings with ~120 role reductions.

• Upgraded full-year profit guidance to group PBT positive, with term loan PBT margin above 12% and medium-term targets of 15%-20% revenue CAGR and >15% PBT margins.

• Expanded product set with new term loans, FlexiPay enhancements, Growth Guarantee Scheme, and a cashback credit card, increasing customer engagement and market reach.

Financial highlights

• Group revenue grew 32% year-on-year to £79.1m; adjusted EBITDA nearly doubled half-on-half to £11m.

• Unrestricted cash at period end was £164m, with net assets at £229m.

• FlexiPay transactions reached £226m, up 151% year-on-year, with over 13,600 cards issued.

• Term loan originations up 17% half-on-half and 47% year-on-year to £692m.

• Operating expenses increased modestly to £78.6m, with revenue up 7% and costs up 1% sequentially.

Outlook and guidance

• Upgraded full-year profit guidance: group to be profitable for the full year, not just H2; term loans PBT margin guidance raised to over 12%.

• Medium-term targets reaffirmed: 15%-20% revenue CAGR and >15% PBT margins.

• FlexiPay revenue expected to triple year-on-year in 2024; losses to remain similar to prior year.

• Announced intention for a further £25m share buyback after current programme completes.