In This Article:
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Revenue Growth: Increased by 23% to 160 million.
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Group Profit: 3.4 million, above market expectations.
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PBT Margin (Term Loans): 13.3%, up from 5.2% the previous year.
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Credit Extended: Grew 47% to 1.9 billion.
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Cost Savings: Annualized benefit of 15 million from UK restructuring.
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Share Buyback: Completed a 25 million buyback program; over 11% of share capital bought back.
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FlexiPay Revenue Growth: Grew more than threefold.
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Net Assets: 217 million.
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Unrestricted Cash: 151 million.
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Term Loans Revenue: 142.6 million, up 15% from 2023.
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FlexiPay Transactions: Nearing 500 million with end-of-month balances at 119 million.
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Operating Cost Growth: 9%, compared to revenue growth of 23%.
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Expected Credit Losses: Increased with FlexiPay balance growth, consistent with expectations.
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Loan Returns: Stable net returns around 5% above investors' cost of funding.
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Funding Circle Holdings PLC (LSE:FCH) achieved a 23% increase in revenue, reaching 160 million pounds.
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The company reported a group profit of 3.4 million pounds, surpassing market expectations.
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Credit extended grew by 47% to 1.9 billion pounds, with significant growth in both core loans and new products.
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The company successfully restructured its UK business, resulting in an annualized benefit of 15 million pounds in cost savings.
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Funding Circle Holdings PLC (LSE:FCH) launched two share buyback programs, buying back over 11% of its share capital by the end of February 2025.
Negative Points
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The company is facing ongoing litigation related to the sale of loans, which could have potential implications if not resolved favorably.
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Despite strong performance, the macroeconomic environment remains challenging, with high business insolvencies and low consumer confidence.
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The FlexiPay product, while showing growth, still incurs upfront costs and is not yet fully profitable.
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The US business was sold due to trading losses, indicating challenges in international markets.
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There is a need for additional capital to support the growth of FlexiPay, which could impact cash reserves.
Q & A Highlights
Q: Can you provide an update on the litigation issue and its potential implications if the case is lost? A: Lisa Jacobs, CEO: The litigation involves a summary judgment related to two loans defaulted in March 2020. The case questions who has the rights to the claim, not the enforceability of the loans or personal guarantees. The trial is expected after September, and we remain confident in a favorable outcome for Azuro, the involved party. Further details cannot be disclosed due to ongoing proceedings.