Funding Circle shares plummet on growth warning
The peer-to-peer lender said the "uncertain economic environment" had damaged demand for loans and warned that 2019 revenue growth will hit 20 per cent, rather than the 40 per cent it originally predicted.
The company now expects revenues to grow by just 20% this year, down from its previous forecast of 40%. Stocks dive 25% on the news
Stocks impacted: Funding Circle PLC (FCH)
The company also tightened its loan criteria for higher risk businesses. Boss Samir Desai blamed the uncertainty surrounding Brexit for holding firms back from seeking lending. Based on last year’s revenue of £142m, Funding Circle is now on track to record revenue of around £170m. At the same time, Funding Circle said its earnings before interest, tax, depreciation and amortization loss margin will be better for 2019 than it was in 2018. In its last financial year Funding Circle recorded a widened operating loss of £51.6m, 40 per cent up from the year before. As a reminder, the company's shares took a hit after it announced plans to wind down a fund that financed a number of small business loans.
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