GLI Finance narrows losses as lending arm swings into the black
GLI Finance narrowed its losses last year, thanks to growth in its lending business and an array of cost cuts.
However, the Aim-listed alternative finance group admitted that its headline financial results for the year ended 31 December 2019 were “disappointing”.
GLI Finance reported a loss of £9.9m, down from a loss of £23.2m the previous year. Meanwhile, revenue ticked down to £13.1m from £13.2m over the same period.
Operating losses also narrowed, from approximately £2.3m in 2018 to £0.5m in 2019. This was partly driven by cost savings of £1.5m across the whole group, which involved reducing the company’ s headcount from 42 to 34 employees.
As in previous years, there was a notable disparity in the performance of the two arms of GLI’s business. Its lending business Sancus BMS reported an operating profit of £0.4m, an improvement on the previous year’s £200,000 loss.
However, its Fintech Ventures portfolio – which invests in fintech lending platforms – saw a further writedown of £7.5m in 2019. This was partly due to one of its holdings, UK Bond Network, going into administration last year.
“We are largely a passenger on this journey and due to capital constraints, we have not been able to follow our money and participate in the latest capital raisings where platforms have been able to complete them,” said Andy Whelan, chief executive of GLI Finance.
“Whilst fintech as a sector continues to grow, the increased competition is making it difficult for smaller players, particularly those that are loss making, to raise further equity.”
Read more: GLI bosses received over £750k in bonuses despite 2018 loss
GLI’s chairman Patrick Firth said that the company’s focus remains on maximising the earning potential of our two distinct business units, whilst recognising that Sancus is the key focus for GLI.
“Over the last few years we have seen the valuation of Fintech Ventures become a much smaller part of the group’s assets as certain platforms within the portfolio have not been successful and numerous valuations in the sector have reduced,” Frith added.
“We are in a difficult position as a minority investor with limited financial resources to continue to support the platforms, but we continue to work hard to maximise the value from this portfolio.”
