MONEY&CO has said it expects to become profitable this year, after narrowing its losses and increasing its turnover in its latest annual results.
The peer-to-peer business lender, run by City ‘superwoman’ Nicola Horlick, posted a pre-tax loss of £547,679 in the year to 31 March 2019, compared to a loss of just over £1.5m the previous year.
Turnover increased by 235 per cent, the firm said, although the value was not disclosed in the annual report, which was filed with Companies House.
“In the current year, the board believes that the company will become profitable, which will compare favourably with other operators of P2P lending platforms,” the firm said.
“Since Money&Co completed its first loan in April 2014, it has lent almost £20m to small- and medium-sized enterprises. In the current year, we expect to increase the lending book very substantially.”
Money&Co said that it had attracted “a steady flow of transfers from other ISA providers” in the 2018/19 tax year into its Innovative Finance ISA and expects this to accelerate during the current financial year as savers search for income.
The firm, which provides loans to businesses, property developers and housebuilders, also revealed that it is about to enter the litigation finance market.
Money&Co has had six loan defaults since inception, it said. Two of the borrowers who defaulted repaid their loans in full, three agreed repayment plans and one was declared as a bad debt.
Its bad debt rate is 0.04 per cent per annum against a target of one per cent per annum.
However, the firm warned that a Brexit-induced economic slowdown could pose a potential headwind and said that it has “become extremely cautious in our lending strategy and look for assets as security for every loan we make”.
Money&Co reported an increase in capital and reserves to £399,635 for the latest financial year, from £120,421 the year before. It said that its first priority will be to use its improved balance sheet to repay a £500,000 loan from one of its shareholders.
Money&Co’s headcount increased from four to nine last year and it said it is looking to recruit across all areas of the business this year.