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Peer2Peer Finance News | October 20, 2018

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GLI Finance’s losses widen

GLI Finance’s losses widen
Suzie Neuwirth

GLI FINANCE’S losses almost doubled in the first half of 2017, hit by £12.6m of write downs as it continues its planned restructuring of the business.

The Aim-listed firm, which owns peer-to-peer lender Funding Knight, reported a pre-tax loss of £15.1m for the six months to the end of June, widening from £8.7m in the first half of 2016.

Revenue fell slightly to £5.6m from £5.8m over the period.

GLI Finance has been simplifying its group structure into two business units: Sancus BMS and Fintech Ventures. Sancus BMS comprises the group’s property-backed and small- and medium-sized enterprise (SME) lending business, including Funding Knight, while Fintech Ventures comprises the group’s investments in 11 SME-focused lending platforms.

Read more: Sancus completes £12m funding for Heartlands development

The company reported £12.6m of write downs within its Fintech Ventures investments following a detailed review. Investment into this division of the company reduced to £28.9m from £36.1m at the end of December 2016, due to write downs in two platforms and concerns over the collectability of some platform loans.

Of the 11 platforms in Fintech Ventures, five are expected to reach break-even on a monthly basis by end of 2017, GLI Finance said.

The company said it would not be declaring a dividend for this period and will resume payment of dividends when the group’s cash-generation permits.

Read more: GLI Finance posts £16.5m loss after “difficult” 2016

“The first six months of this year have seen a continuation of the work I started on my appointment in December 2015,” said chief executive Andy Whelan. “The business has been greatly simplified, tough decisions made, and we consider the investments in our fintech portfolio now offer potential for capital gain from the values at which they are currently being held.

“With most of the restructuring now complete the management team’s focus is on executing the plan to grow Sancus BMS, and to maximise the value of the fintech investments.”

It plans to ensure that Sancus Finance is profitable on a monthly basis by December 2017, with product enhancements, improved sales capabilities and a better online presence in the pipeline.

Read more: GLI hires new COO after business turnaround

Funding Knight was bought out of administration by GLI Finance last year and gained full Financial Conduct Authority approval in July 2017. It has since been transferred into Sancus BMS.

“Funding Knight and Sancus Finance are increasingly being managed as one business and we are making good progress on the repositioning of Sancus Finance and Funding Knight,” said Whelan.

GLI Finance also said it is in the process of launching secured lending in the UK and plans to launch secured lending in Ireland in 2018.