Full Year 2024 Results

Financial Summary:

• For the Continuing Group¹, credit extended grew 47% to £1,899m (2023: £1,294m):
  • Continued momentum in UK Term Loan (“Term Loan”) originations up 33% to £1,407m (2023: £1,060m)
  • Strong growth in FlexiPay transactions, more than doubling to £492m (2023: £234m).
• Balances under management were slightly lower at £2,833m (2023: £2,922m) in line with expectations:
  • Term Loan Loans under Management (“LuM”) of £2,714m (2023: £2,853m) reflects the repayment of legacy Covid government-guaranteed loans and is expected to grow in 2025.
  • FlexiPay balances, which drive FlexiPay’s revenue, doubled to £119m (2023: £58m).
• Revenue was £160.1m with 23% growth on 2023 with a strong performance from both Term Loans and FlexiPay.
• Significant move to profit, with profit before tax (PBT) pre-exceptionals of £3.4m (2023: Lossbefore tax £9.9m).
• Term Loans increased profitability with PBT pre-exceptionals of £19.0m (2023: £6.5m) reflecting strong cost actions and operating leverage, which covers the investment in FlexiPay and the Cashback credit card.
• Exceptional items of £2.6m, related to the simplification and streamlining of the business announced in May 2024, led to a profit before tax of £0.8m (2023: £9.9m loss).
• Unrestricted cash remained healthy at £150.5m (2023: £169.6m), with a decrease due to the two share buyback programmes in the year, which are anticipated to conclude in Q2 2025. As at 31 December 2024, £33.7m worth of shares (33.5m shares) of the total £50m of announced buybacks had been purchased.

Operational & Strategic Summary:

• Delivered on our plan for a simpler, leaner and profitable business:
  • Successful sale of US business to iBusiness Funding for a gain on sale of £10m.
  • Progressed cost-efficiency actions and on track to deliver c.£15m of annualised benefit in 2025 and, together with the US sale, reduced total headcount to 726 (Dec 2023: 1,101 including US).
• Continued to drive growth and innovate across all our products to support our strategic ambitions:
  • Term Loans: Origination growth of 33% with increasing PBT margins to 13.3%, driven by product innovation and cost actions. Launched the government’s Growth Guarantee Scheme (GGS) loans, allowing us to extend credit to a broader set of the market. Grew the breadth of our Marketplace product set, monetising our distribution strength, and allowing us to extend credit to businesses that we can’t help directly get the funding they need.
  • FlexiPay: Continued strong growth from both new and existing customers, with 70% of 2024 revenue from existing customers (pre-2024). Transactions doubled and closing balances grew 105% to £119m.
  • Cashback credit card: Launched in H2 2024 with steady uptake in users and borrower usage exceeding expectations.
• Robust and attractive Term Loan returns through the cycle: o Annualised net returns on Term Loans consistently ~5%, above cost of capital, to institutional investors

Looking ahead:

• Our refreshed strategic priorities are focused on customer-led profitable growth:
  • Get to yes: get the right product to the right business, through credit excellence and product improvements.
  • Expand our audience: target new segments; deepen and expand our distribution channels.
  • Scale our products: capitalise on the large market opportunity by focusing on refining and scaling our products to drive growth and margin expansion.
  • Build a seamless lifetime customer experience: deliver an exceptional experience throughout our customers’ lifetime journey with our expanded product set, as their trusted financial partner.

We have made a good start to the year, we have attractive growth opportunities and are on track to deliver our medium term guidance in 2026 of 15-20% revenue CAGR from FY23 and PBT margins of >15%, equating to:

• Revenue of at least £200m
• Profit before tax of at least £30m

Board changes:

The Company noted in the FY 2023 Annual Report and Accounts that there would be some upcoming changes in Board composition in respect of some of its long-tenured Directors.

Geeta Gopalan, Chair of the Audit & Risk Committee and Senior Independent Director, and Neil Rimer, NonExecutive Director, have both informed the Board of their intention to step down later this year. To ensure a smooth transition and maintain Board continuity, they will stand for re-election at the forthcoming Annual General Meeting and, subject to shareholder approval, intend to continue to serve as Directors until suitable candidates have been identified and appointed.

With Ken Stannard now in place as Chair Designate, the Nomination Committee has renewed its search process for independent Non-Executive Directors, with the appropriate skills and experience to drive the business through the next phase of growth

Analyst presentation:

Management will host a presentation and conference call for institutional investors and analysts at 9:30am UK time (BST), on Thursday 6 March 2025.

To watch and listen to the webcast, with the opportunity to submit written questions, please use this link to register and gain access to the event.

For conference call access, please dial +44 33 0551 0200 or +1 786 697 3501. Quote ‘Funding Circle Full Year Results’ when prompted by the operator.

An on-demand replay and transcript will also be available on the Funding Circle website following the presentation.

For further details:

Funding Circle Holdings plc ​​​​​
Lisa Jacobs, Chief Executive Officer
Tony Nicol, Chief Financial Office
ir@fundingcircle.com

Headland Consultancy
Stephen Malthouse and Jack Gault (+44 20 3805 4822)

Forward looking statements and other important information:
This document contains forward looking statements, which are statements that are not historical facts and that reflect Funding Circle’s beliefs and expectations with respect to future events and financial and operational performance. These forward looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of Funding Circle and which may cause actual results or performance to differ materially from those expressed or implied from such forward looking statements. Nothing contained within this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of Funding Circle or its business. Any historical information contained in this statistical information is not indicative of future performance. The information contained in this document is provided as of the dates shown. Nothing in this document should be construed as legal, tax, investment, financial, or accounting advice, or solicitation for or an offer to invest in Funding Circle.

Forward looking statements and other important information:

This document contains forward looking statements, which are statements that are not historical facts and that reflect Funding Circle’s beliefs and expectations with respect to future events and financial and operational performance. These forward looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of Funding Circle and which may cause actual results or performance to differ materially from those expressed or implied from such forward looking statements. Nothing contained within this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of Funding Circle or its business. Any historical information contained in this statistical information is not indicative of future performance.

The information contained in this document is provided as of the dates shown. Nothing in this document should be construed as legal, tax, investment, financial, or accounting advice, or solicitation for or an offer to invest in Funding Circle.

About us:

Funding Circle is the UK’s leading SME finance platform. We operate in a large, attractive and growing market, with over £80bn of outstanding debt in the UK SME market and £1.3trn of B2B SME payments each year. In the UK, Funding Circle has extended £14.6bn in credit to c.110,000 businesses.

We provide an unrivalled customer experience, powered by data and technology. This advantage is clear in our credit assessment process, with our models 3x better at discriminating risk than traditional bureau scores. It also delivers superior results for our customers. 77% of applicants receive an instant decision, we have a strong NPS of 79 and see strong repeat usage, especially with FlexiPay.

We are constantly looking at ways to innovate our product offering which enables customers to borrow, pay later and spend with Funding Circle and serve more small business needs. In Q3 2024, we launched a new Cashback credit card for everyday business spending.

View the full Press Release

^{[1] The comparative financial information has been re-presented to exclude the US business which is  presented as discontinued operations. The Continuing Group excludes the US discontinued operations. [2] Credit extended includes Originations and Transactions and Balances under management include LuM and Lines of Credit.
[3] Net income is also referred to as “Revenue”.
[4] Unrestricted cash refers to total cash less cash that is restricted in use.}