Funding Circle trims full-year forecasts

Funding Circle trimmed its full-year forecasts on Thursday, in response to the "challenging" macro environment.

The lending platform, which specialises in small businesses, said its first-half performance had come in ahead of expectations, and that it was "well prepared" for the challenging macro environment in the UK and US.

But it was also taking a "prudent approach", it added, and now expected income to be in the range of £140m to £155m. The forecast compares to previous guidance of between £155m and £170m.

The group expects to remain adjusted earnings before interest, tax, depreciation and amortisation positive, although it would be "skewed" to the first half, it noted.

The update came as Funding Circle posted figures for the six months to 30 June. Loans under management were £4.1bn, down 9% year-on-year following early repayments of Coronavirus Business Interruption Loans and PPP loan forgiveness.

Funding Circle provided temporary government loans, introduced to help businesses through the pandemic, alongside its traditional lending.

Originations were £803m, down 51% following the conclusion of the government-guaranteed loan schemes in the first half of the previous year, while operating income fell 30% to £66.4m because of tough comparatives, with income boosted a year earlier by the loan schemes.

Adjusted EBITDA was £10.6m, down from £53.3m, in line with the reduction in net income.

Lisa Jacobs, chief executive, said: "We have made early progress on all three of our strategic pillars to transform the business into a multi-product platform. We are attracting more business, saying yes to more business and entering new product categories to enable small businesses to not only borrow with Funding Circle, but pay and spend as well.

"We are well prepared to manage the business through the challenging macro environment."

As at 1100 BST, shares in Funding Circle were ahead 5% at 38.15p.