in , ,

Peer-to-peer lender Funding Circle to cut more than 100 jobs

Funding Circle


Funding Circle is overhauling its German and Dutch operations after falling deeper into the red last year.

The peer-to-peer lender will cut more than 100 jobs at its continental European division as it races to reach breakeven and win back the confidence of shareholders.

Shares in Funding Circle, which matches retail investors with companies looking for a loan, fell by 29.2 per cent on the back of its mounting losses. It has lost 90 per cent of its value since its £1.5 billion flotation in 2018, when it was touted as a champion of Britain’s financial technology sector.

The company was set up in 2009 by Samir Desai, chief executive, and two friends from the University of Oxford. It pools investors’ cash to provide loans to small and medium-sized companies. It earns a fee on each loan it originates but has not turned an annual profit.

It reported revenues of £167.4 million last year, up 18 per cent on 2018. The growth rate was lower than in previous years after the company put the brakes on lending to riskier borrowers. Losses before tax rose to £84.2 million after it booked a non-cash charge of £34.3 million at its continental European business. Its cash outflows rose to £49 million last year from £41 million in 2018.

Funding Circle is scaling back its operations in the Netherlands and Germany, where it will stop offering peer-to-peer loans. Instead it will act as an online broker between companies and banks. Mr Desai, 36, said Funding Circle had been unable to turn a profit in the two countries because of negative interest rates and the prevalence of state-supported lenders.

Funding Circle will cut 150 jobs in Germany and the Netherlands but will employ an extra 25 people in London to service its European operation. Mr Desai said the restructuring would cost £5 million but would help it reach profitability sooner. He said the European businesses accounted for 8 per cent of revenues but 60 per cent of its losses.



Source link

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

Bake Sale

Swindon-based company raise funds for local mental health charity

Retail Week Awards Winners 2020

Greggs, Pets at Home & The Co-Op ‘Do the Double’ at Retail Week Awards