Lending platform Funding Circle slashed its guidance for the year today as it reported a plunge in profits to £1.6m in the six months to June.
The plunge in profits from £35.4m last year, however, was ahead of analysts expectations of a £12.4m loss, which sent shares up as much as seven per cent yesterday morning before settling to trade up by 0.55 per cent.
The London-based fintech said it was in a “good position” to manage a looming recession this year but slashed its outlook for income for the full year by £15m to between £140m and £155m.
“We are well prepared to manage the business through the challenging macro environment and are confident in our ability to help small businesses do the same,” chief Lisa Jacobs said today in a statement.
She added that firm is well “placed to deliver on our mission to help more small businesses get the funding they need to win.”
The firm was among a crop of alternative lenders to dish out emergency loans through the pandemic via the government’s Coronavirus Business Interruption Loan Scheme (CBILS) scheme, which buoyed its income in the first half of last year.
Loans under management at the alternative lender shrank to £4.1bn this year however, as firms paid off government-backed emergency covid loans earlier than expected.
Total income across funding has tumbled to £77.3m from £120.6m in the same period last yeah, when the government schemes buoyed Funding Circle’s books.
Funding Circle held assets of £299m at the end of June on its book including unrestricted cash of £183m which it said would support business investment and growth.
Funding Circle, which was originally launched by Samir Desai as a peer-to-peer lender in 2010, permanently shuttered its peer-to-peer operation in March after the Financial Conduct Authority regulator tightened rules.