analyst presentation fy23 combined master final.pdf
Funding Circle
FULL YEAR 2023 RESULTS
7 March 2024
“Funding Circle’s loan has opened up new possibilities for our future growth. It was easy to apply and we received the money really quickly - it was a no-brainer for us!"
Anna Tyler, ANNA Cake Couture
Disclaimer
Information regarding forward-looking statements
This Presentation includes forward-looking statements that involve known and unknown risks and uncertainties, many of which are beyond the Group's control. Forward-looking statements are sometimes identified by terminology such as "believe", "expects", "may", "will", "could", and include statements about future results of operations, financial condition, prospects, growth, and strategies.
Group performance in line with expectations; go forward focus on profitable UK business
2023 results: UK Loans business profitable
- Total income of £162m, +7% YoY
- Unrestricted cash of £170m
- UK business has attractive growth and profitability
Looking ahead: simplifying business; cash and profit focus
- H2 24: PBT positive
- Medium term: Net income growth of ~15-20%; PBT margins of £6.5m
- Up to £25m buyback given share price undervalued
Where small businesses get the funding they need to win
We’re the UK’s leading SME lending platform
- £16.9bn extended to small businesses
- £6.9bn GDP contribution
- >95,000 jobs supported
- £1.6bn tax receipts
Attractive growing and profitable go forward business
- £1.29bn 2023 total originations (+12% YoY)
- FlexiPay shows strong traction with ~4x growth from 2022 to 2023
Well positioned to grow in a large, underserved market
- £84bn Addressable SME loans market
- £1.3trn SME B2B payments
Delivering superior customer experience
- 6min Application time
- 79 Customer NPS
Our UK focus continues to be centred around our three strategic pillars
- Scale products and processes efficiently
- Innovate fast through superior tech and data
- Attract more businesses
Financial performance
Group financial performance
| Metric | 2022 (£m) | 2023 (£m) |
|---|---|---|
| Total income | 151.0 | 162.2 |
| AEBITDA | 9.5 | 184.0 |
| PBT | (33.2) | (12.9) |
| NAV | 284.0 | 247.0 |
| Unrestricted cash | 166 | 170 |
Group results in line with guidance
| UK and US Loans | FlexiPay | |
|---|---|---|
| Total income | £150m - 160m | Over £10m |
| AEBITDA | £0 - 10m | £(10-20)m |
| Performance | £153.9m | £7.9m |
UK Loans AEBITDA and PBT profitable
| Metric | 2022 (£m) | 2023 (£m) |
|---|---|---|
| Total income | 151.0 | 162.2 |
| AEBITDA | 6.5 | 10.7 |
| PBT | (16.6) | (14.4) |
FlexiPay spotlight: continued momentum
- ~4x growth in transaction value from 2022 to 2023
84,000 transactions since launch
Leading UK online SME lender with attractive growth
- Executing against our strategic plan in the UK
- Go forward UK business is simpler and profitable with strong opportunities ahead
2024 Outlook
| UK Loans | FlexiPay | |
|---|---|---|
| Net income | >10% growth | 3x growth |
| PBT | Margins of 8-12% | Continued investment |
Looking ahead to attractive growing UK business
- Multi-product business well positioned for opportunities
- Delivering superior customer experience