FUNDING CIRCLE HOLDINGS PLC

Recommendation history

• 2025-03-06BuyBuy: Funding Circle delivered a strong 2024 reset, with revenue up 23% to £160m, PBT of £3.4m, Term Loans PBT margin expanding to 13.3%, and 47% growth in credit extended to £1.9bn. The key upside is credible operating leverage and FlexiPay scale toward management’s 2026 targets of at least £200m revenue and £30m PBT, but the investment case still depends on converting FlexiPay’s growth into profitability and resolving the Azzurro litigation.
• 2022-03-10HoldHold: Funding Circle delivered strong 2021 results, with £206.9m total income, £91.8m adjusted EBITDA, £64.2m operating profit and £224m cash, but earnings were materially helped by government lending schemes and £70m of fair-value gains. 2022 guidance resets lower at £155m–£170m total income, including only £10m–£15m of investment income, while the core investment case depends on UK growth, US recovery and unproven FlexiPay execution.
• FY 2020HoldHold: Funding Circle showed a meaningful H2 recovery, with £20.3m of Adjusted EBITDA and £7.2m of operating profit, while UK originations rose 91% year on year to £1.5bn and group originations reached a record £2.7bn. However, FY2020 still produced a £63.8m Adjusted EBITDA loss and £106.3m operating loss, 2021 lending is expected to dip from Q2 as government schemes roll off, and the US is likely to remain EBITDA loss-making for several years.
• 2019-03-07HoldHold: Funding Circle delivered strong execution, with revenue up 55% to approximately £141–142m, loans under management up 55% to £3.15bn, and segment adjusted EBITDA turning positive at roughly 5% margin. However, the group still reported a £28.5m adjusted EBITDA loss and remains dependent on continued growth investment; 2019 revenue guidance above £200m and lower group losses are encouraging, but not enough for a clean buy without valuation and clearer proof of durable profitability.