Half Year 2024 Results
05/09/2024 07:01
============
Funding Circle Plc (FCH)
Funding Circle Plc: Half Year 2024 Results
05-Sep-2024 / 07:00 GMT/BST
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Funding Circle Holdings plc
Half Year 2024 Results
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE
REGULATION NO. 596/2014
STRONG HALF YEAR PERFORMANCE AND DELIVERY AGAINST STRATEGIC OBJECTIVES
SIMPLER, LEANER AND PROFITABLE BUSINESS WITH HIGH GROWTH
Funding Circle Holdings plc (“Funding Circle” or the “Group”) today announces results for the six
months ended 30 June 2024.
Commenting on the results, Lisa Jacobs, Funding Circle CEO, says:
“We are delivering on the plan I laid out in March to be simpler, leaner and profitable whilst
continuing to show strong growth. In May, we simplified and streamlined the business to deliver
£15m annualised savings in 2025 and in July we completed the sale of our US business for a gain of
£10m.
The first half was stronger than our expectations with annual revenue growth of over 30%; 12% up on
H2 2023. We were profitable a half earlier than we set out in our guidance in March and are today
upgrading our guidance to be profitable for the full year (versus prior guidance of H2 profitable).
We are reaffirming our medium-term guidance of 15-20% revenue growth and PBT margins of more than
15% and continue to be excited about the long-term growth and profitability of the business as we
execute against our plan.
We will commence a further share buyback of up to £25m following the conclusion of the existing
£25m share buyback.”
£m H1 2024 H2 2023 1 1 H1 20231
UK Term Loan originations 692 589 471
FlexiPay Transactions 226 144 90
Net income (“Revenue”) 2 2 79.1 70.4 59.7
Profit/(loss) before taxation (before exceptional items) 0.5 (2.5) (7.4)
Loss before taxation (after exceptional items) (2.1) (2.5) (7.4)
Unrestricted Cash 3 3 164.4 169.6 172.5
Financial Summary:
• For the Continuing Group, UK Term Loan (“Term Loan”) originations grew to £692m (H1 2023:
£471m) and FlexiPay transactions scaled to £226m (H1 2023: £90m) underlining the strength of
the business.
• Net income (“Revenue”) was £79.1m, 32% growth on H1 2023 and 12% on H2 2023.
• PBT pre-exceptionals was £0.5m (H2 2023: PBT negative £2.5m and H1 2023: PBT negative £7.4m)
reflecting the profitable growing Term loans business funding the planned investment in
FlexiPay.
• Term Loans increased profitability with PBT pre-exceptionals of £9.2m (H2 2023: £5.1m and H1
2023: £1.4m).
• Exceptional items of £2.6m related to the simplification and streamlining of the business
announced in May 2024, led to a Loss before tax of £2.1m (H1 2023: £7.4m loss).
• Unrestricted cash remained healthy at £164.4m (31 December 2023: £169.6m).
• Robust and attractive returns across all products with continued institutional investor demand;
c.£2bn of future funding in place.
Operational & Strategic Summary:
• Executed against our plan for a simpler, leaner and profitable business:
◦ Successful sale of US business to iBusiness Funding for a gain on sale of £10m.
◦ Progressed cost-efficiency actions, to deliver c.£15m of annualised benefit in 2025 and,
together with the US sale, reduced total headcount to c.760 (Dec 2023: c.1,100).
• Continued to drive growth and innovate across all our products to support our strategic
ambitions:
◦ Term Loans: launched the government’s Growth Guarantee Scheme (GGS); expanded product
segments and third-party integrations within our Marketplace offering. This offering now
accounts for 11% of term loan originations to provide the widest possible support to small
businesses.
◦ FlexiPay: 57% growth in transaction value on H2 2023 to £226m (H2 2023: £144m and H1 2023:
£90m); continued enhancement of proposition, including increased flexibility of repayment
terms.
◦ Cashback Credit Card: beta launched in Q3 with full roll-out in H2 2024.
1 The comparative financial information has been re-presented to exclude the US business which is
presented as discontinued operations.
2 Net income is also referred to as “Revenue”.
3 Unrestricted cash refers to total cash less cash that is restricted in use. The restricted cash
is cash that is not available for general use by the company as it is held within investment
vehicles and generally payable to third parties. £23.1m of cash at 30 June 2024 relates to the US
business and is held in a disposal Group.
Outlook: Attractive, growing and profitable business
• Term Loans revenue growth guidance remains at greater than 10% year on year growth. We expect
PBT margins to be ahead of our previous guidance.
• FlexiPay guidance remains unchanged. FlexiPay revenue growth will be 3X that of the prior year
and FlexiPay losses will be similar to that of the prior year.
• Building on the H1 2024 performance, the Group will be PBT profitable for the Full Year vs H2
2024 in previous guidance. Over the Medium Term we expect revenue growth of 15-20% CAGR with
PBT margins of >15%.
FY 2024
Term Loans FlexiPay
Revenue >10% growth vs. 2023 3x growth vs 2023
>12% margins Continued investment, with losses at a similar level to
Profit before tax1 FY23
(25% AEBITDA margins)
Profit before tax1 The UK businesses (Term Loans and FlexiPay) will be PBT positive for 2024
1 Pre-exceptional items
Share buyback
We announced a share buyback programme of up to £25m in March 2024 which is expected to complete in
Q4 2024. We intend to do a further share buyback of up to £25m once the existing programme
completes and will announce this programme separately before it commences.
Board changes
As we announced in May, Oliver White, Executive Director and CFO, will be standing down from his
role. He will begin his transition to Tony Nicol, currently Director of Finance and Investor
Relations, today and step down from the Board on 1 January 2025. We are hugely grateful to Oliver
for his contribution to Funding Circle and the important role he has played in putting the Company
in a strong position to grow in the coming years.
Analyst presentation:
Management will host a presentation and conference call for institutional investors and analysts at
9:30am UK time (BST), on Thursday 5 September 2024.
To watch and listen to the webcast, with the opportunity to submit written questions, please use
4 this link to register and gain access to the event.
For conference call access, with the opportunity to ask live questions, please dial +44 33 0551
0200 or +1 786 697 3501. Quote ‘Funding Circle Half Year Results’ when prompted by the operator.
An on-demand replay and transcript will also be available on the Funding Circle website following
the presentation.
Investor relations and media relations:
Funding Circle Investor Relations
Tony Nicol
5 ir@fundingcircle.com
Funding Circle Media Relations
Angeli Everitt (+44 20 3830 1325)
press@fundingcircle.com
Headland Consultancy
Stephen Malthouse and Jack Gault (+44 20 3805 4822)
Forward looking statements and other important information:
This document contains forward looking statements, which are statements that are not historical
facts and that reflect Funding Circle’s beliefs and expectations with respect to future events and
financial and operational performance. These forward looking statements involve known and unknown
risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of
Funding Circle and which may cause actual results or performance to differ materially from those
expressed or implied from such forward looking statements. Nothing contained within this document
is or should be relied upon as a warranty, promise or representation, express or implied, as to the
future performance of Funding Circle or its business. Any historical information contained in this
statistical information is not indicative of future performance.
The information contained in this document is provided as of the dates shown. Nothing in this
document should be construed as legal, tax, investment, financial, or accounting advice, or
solicitation for or an offer to invest in Funding Circle.
Business Review
Funding Circle is the UK’s leading SME lending platform. We operate in a large, attractive and
growing market, with over £80bn of outstanding debt in the UK SME market and £1.3trn of B2B SME
payments each year. In the UK, Funding Circle has extended £13.6bn in credit to c.103,500
businesses.
We provide an unrivalled customer experience, powered by data and technology. This advantage is
clear in our credit assessment process, with our models 3x better at discriminating risk than
traditional bureau scores. It also delivers superior results for our customers. 76% of applicants
receive an instant decision, we have a strong NPS of 75 and see strong repeat usage, especially
with FlexiPay.
We are constantly looking at ways to innovate our product offering which enables customers to
borrow, pay later and spend with Funding Circle and serve more small business needs. In Q3, we
commenced a beta roll out of a new Cashback Credit Card for everyday business spending.
We were pleased with the strong operational and strategic performance in H1 2024, with strong
growth from both of our continuing business units compared to H2 2023 and H1 2023. The Group
comprises two ongoing trading business units, each at differing stages of maturity. The US business
was sold on 1 July 2024 and is therefore treated as discontinued in the period.
Originations and transactions H1 2024 2024 H2 2023 H1 2023
£m £m £m
Continuing operations
UK Term Loan originations 692 589 471
FlexiPay transactions 226 144 90
Discontinued operations
US Term Loan originations 164 186 210
Term Loans
The Term Loans business originations were progressively up against H1 and H2 2023. We saw growth
through our commercial loans, our participation in the third iteration of the Recovery Loan Scheme
(“RLS”), as well as more originations through our marketplace of third party lenders where we refer
SMEs to other finance providers if we are unable to lend to them directly. Through our suite of
products we are able to support as many SMEs as possible by providing access to financing.
Originations were £692m in H1 2024, increasing from £471m in H1 2023, and were higher than the
£589m in H2 2023.
Originations were funded through forward flow agreements with institutional investors and, as at 30
June 2024, we had forward flow agreements in place totalling £1.8bn.
In July 2024, we gained accreditation to participate in the longer term government guaranteed
programme, the Growth Guarantee Scheme (“GGS”). This will allow us to help provide finance to SMEs
in parts of the market we otherwise would not.
FlexiPay
Our line of credit product, FlexiPay, has demonstrated significant growth to date and we continue
to invest in this business unit. Transactions continue to grow, more than doubling since H1 2023 to
£226m, and we are experiencing strong customer engagement.
FlexiPay customers can choose to pay later via bank transfer or through a FlexiPay card with
approximately 90% of transactions via bank transfer.
FlexiPay is funded by Funding Circle capital and a senior debt facility of £150m.
30 June 2024 31 December 2023 30 June 2023
Loans under Management (LuM)
£m £m £m
Continuing operations
Loans under management
UK Term Loans 2,777 2,853 3,021
Other n/a 11 22
Total 2,777 2,864 3,043
FlexiPay balances 81 56 34
Discontinued operations
US Term Loans 438 420 398
Loans under management from continuing operations declined in the period by 3% to £2,777m. This was
principally driven by continued repayment on the government loan schemes, CBILS and RLS, offset by
growth in loans under management from commercial lending and the participation in the third
iteration of RLS. As at 30 June 2024 UK government-guaranteed loans represented £1,315m compared to
£1,462m commercial loans (31 December 2023: £1,555m government-guaranteed and £1,298m commercial
loans).
Segmental highlights
Continuing operations 30 June 2024 30 June 2023 6 4
United Kingdom United Kingdom Other 7 5 Total
Term FlexiPay Total Term FlexiPay Total Term Loans Total
Loans Loans
£m £m £m £m £m £m £m £m
Operating income 67.2 10.1 77.3 55.4 2.3 57.7 0.3 58.0
Net investment income 1.6 - 1.6 1.7 - 1.7 - 1.7
Total income 68.8 10.1 78.9 57.1 2.3 59.4 0.3 59.7
Fair value gains/(losses) 2.8 - 2.8 0.4 - 0.4 - 0.4
Cost of funds - (2.6) (2.6) - (0.4) (0.4) - (0.4)
Net income (“Revenue”) 71.6 7.5 79.1 57.5 1.9 59.4 0.3 59.7
Adjusted EBITDA 18.3 (7.3) 11.0 8.8 (7.8) 1.0 (0.2) 0.8
Discount unwind on lease (0.3) - (0.3) (0.1) - (0.1) - (0.1)
liabilities
Depreciation, amortisation,
impairment and modification (5.8) (0.7) (6.5) (5.5) (0.5) (6.0) - (6.0)
gains/(losses)
Share-based payments and social (3.5) (0.7) (4.2) (1.8) (0.3) (2.1) - (2.1)
security costs
Foreign exchange gains/(losses) 0.5 - 0.5 - - - - -
Profit/(loss) before tax and 9.2 (8.7) 0.5 1.4 (8.6) (7.2) (0.2) (7.4)
exceptional items
Exceptional items (2.3) (0.3) (2.6) - - - - -
Profit/(loss) before tax 6.9 (9.0) (2.1) 1.4 (8.6) (7.2) (0.2) (7.4)
UK Term Loans business
The Term Loans business delivered operating income of £67.2m in H1 2024, compared with £55.4m in H1
2023, primarily through origination growth. Investment income of £1.6m decreased slightly from
£1.7m in H1 2023 following continued amortisation of invested capital.
Term Loans generated AEBITDA of £18.3m in H1 2024 compared to £8.8m in H1 2023, with AEBITDA margin
improvement. Despite slightly lower net investment income, we benefitted from favourable fair value
movements, primarily from investment in trusts and co-investments, which were sold earlier than
originally anticipated, thereby accelerating the receipt of future cash flows which were valued at
a discount.
Profit before tax and exceptional items was £9.2m in H1 2024, up from £1.4m in H1 2023 primarily
due to the growth in AEBITDA, and after exceptional items was £6.9m.
4 The comparative financial information has been re-presented to exclude the US business which is
presented as discontinued operations.
5 As the Other segment is immaterial this has been absorbed into the UK Term Loans segment for
2024.
FlexiPay
FlexiPay generated operating income of £10.1m (H1 2023: £2.3m) with the increase driven by
transaction and fee growth. The fee charged on FlexiPay for each drawdown against lines of credit
averaged 5.0% (H1 2023: 3.4%) which is paid in equal instalments along with the repayment of each
drawdown balance. Longer payment terms of up to 12 months have also been introduced in H1 2024 for
a higher fee, which contributed to the increased fee growth. Where transactions are made using the
card we also earn an interchange fee of c.1.75%
FlexiPay is funded through Funding Circle invested capital and a senior debt facility with
Citibank. The interest payable on this facility is shown in “cost of funds” and is based on SONIA
plus a margin. This facility is for £150m with the ability to upsize further.
AEBITDA for the period was negative at £7.3m (H1 2023: negative £7.8m). The principal costs
incurred are staff-related costs, marketing costs and expected credit losses.
This product is a lifetime product which benefits from repeat business from customers with
marketing incurred up front to onboard customers as well as the up-front recognition of expected
credit losses.
As the business continues to build, we anticipate there to be continuing investment with a
resultant growth in the cost base, principally marketing and ECL.
US Term Loans business
As was previously announced, the Group signed an agreement in June 2024 to sell the US business to
iBusiness Funding, LLC (“iBF”). The sale was completed on 1 July 2024, and as a result the US
business will not be deconsolidated until H2 2024. The operations of the US business are presented
in a single line as discontinued operations within the financial statements with the assets and
liabilities on the balance sheet presented as a disposal group.
Originations declined in H1 2024 to £164m compared with £186m in H2 2023 and £210m in H1 2023.
Total income for the US was £14.0m (H1 2023: £16.9m). Operating income fell to £13.3m (H1 2023:
£14.5m) comprising a reduction in transaction fees as a result of lower originations, but growth in
servicing fees as LuM improved. Net investment income and fair value reduced as the legacy loans
held at fair value through profit and loss continued to amortise steadily.
Further details regarding the sale of the US can be found under subsequent events.
Profit and loss
30 June 2024 30 June 2023 8 6
Total
Before exceptional
items Exceptional items Total
£m £m £m £m
Transaction fees 42.1 — 42.1 29.6
Servicing fees 18.6 — 18.6 20.4
Interest income 14.1 — 14.1 5.1
Other fees 2.5 — 2.5 2.9
Operating income 77.3 — 77.3 58.0
Investment income 1.6 — 1.6 1.7
Investment expense - — — —
Total income 78.9 — 78.9 59.7
Fair value gains 2.8 — 2.8 0.4
Cost of funds (2.6) — (2.6) (0.4)
Net income (“Revenue”) 79.1 — 79.1 59.7
People costs (36.1) (2.3) (38.4) (31.7)
Marketing costs (22.3) — (22.3) (17.6)
Depreciation, amortisation and (6.5) (0.3) (6.8) (6.0)
impairment
(Charge)/credit for expected credit (3.8) — (3.8) (2.0)
losses
Other costs (9.9) — (9.9) (9.8)
Operating expenses (78.6) (2.6) (81.2) (67.1)
Profit before tax from continuing 0.5 (2.6) (2.1) (7.6)
operations
Loss for the period from (10.2) — (10.2) (10.5)
discontinued operations
Group total income from continuing operations was £78.9m (H1 2023: £59.7m), up 32%, and revenue was
£79.1m (H1 2023: £59.7m). Revenue is total income plus fair value movements on SME loans held for
sale and investments in trusts and includes cost of funds on the senior debt facility for FlexiPay.
The Group made a profit before tax (before exceptional items) from continuing operations of £0.5m
(H1 2023: loss before tax of £7.4m).
The exceptional items of £2.6m related to restructuring undertaken in the UK. The majority of this
related to redundancy costs. After exceptional items, the loss before tax from continuing
operations was £2.1m for the period (H1 2023: loss of £7.4m).
The US results, which are shown as discontinued operations were a loss for the period of £10.2m (H1
2023: £10.5m).
Operating income includes transaction fees, servicing fees, interest income from loans held at
amortised cost, interest on cash balances and other fees and was £77.3m (H1 2023: £58.0m).
• Transaction fees, representing fees earned on originations, increased to £42.1m (H1 2023:
£29.6m) driven by originations as the business continued to expand its term loan offerings to
more segments of the market. Average origination fee yields decreased in the Term Loans
business to 6.1% (H1 2023: 6.3%)
• Servicing fees, representing income for servicing Loans under Management, were £18.6m (H1 2023:
£20.4m), down in line with LuM. The fees move in line with the quantum of Loans under
Management, which decreased in the Term Loans business as growth in LuM from commercial and RLS
3 lending was offset by continued repayment on the government loan schemes outpacing the impact
of new originations. Servicing fees are not charged on FlexiPay lines of credit. Servicing
yields remain similar to 2023 levels.
• Interest income represents the fees earned on FlexiPay lines of credit and interest earned on
cash and cash equivalents. FlexiPay interest income has increased to £9.3m (H1 2023: £2.3m)
driven by transaction levels and the average fees on transactions which were 5.0% in the period
(H1 2023: 3.4%). This is where we charge a fee which is spread over a number of months, in line
with borrower repayments.
Interest earned on cash and cash equivalents increased to £4.6m (H1 2023: £2.8m) which has
increased in line with base rates. Unrestricted cash balances have remained at broadly similar
levels period on period.
Interest on other loans held at amortised cost totalled £0.2m (H1 2023: £nil).
• Other fees arose principally from collection fees we recovered on defaulted loans.
6 The comparative period has been re-presented to show the results of the US business within
discontinued operations.
Net investment income represents the investment income, less investment expense, on loans held on
balance sheet at fair value and declined to £1.6m (H1 2023: £1.7m). This was driven by the
continued amortisation of the remaining loans on balance sheet.
Cost of funds includes the interest paid on the senior debt facility for FlexiPay. The Group
leverages its funding of the FlexiPay product with this facility. The interest is based on SONIA
plus a margin.
Net income (“Revenue”), defined as total income after fair value adjustments and cost of funds, was
£79.1m (H1 2023: £59.7m). The fair value gain in the period of £2.8m (H1 2023: £0.4m) related
primarily to certain investment in trusts and co-investments, which were sold earlier than
originally anticipated thereby accelerating the receipt of future cash flows, which were valued at
a discount. As the on-balance sheet loans continue to amortise down, we would expect fair value
gains/losses to decline in future.
Operating expenses
At an overall level, operating expenses increased compared with H1 2023. Operating costs movements
were driven by cost increases from investment in the FlexiPay business including increased expected
credit losses. Whilst costs increased in the established Term Loans business compared to H1 2023,
they were held flat from H2 2023 as a result of ongoing cost management.
Exceptional items – restructuring
As part of its ongoing commitment to profitability, the Group launched a cost efficiency programme
during the period. These actions are expected to deliver an annualised run rate cost saving of ~£15
million in 2025 and an actual reduction in the overall number of roles by c.120. This resulted in
redundancy costs of £2.3 million and impairment of capitalised development spend intangible assets
of £0.3 million which were treated as exceptional items.
People costs (including contractors) represent the Group’s largest ongoing operating cost. These
increased during the period by 14% to £36.1m (H1 2023: £31.7m), after the capitalisation of
development spend and before exceptional items. This was driven by wage inflation and headcount
growth for the FlexiPay team as it scales. Headcount across Term Loans business has reduced by 4%.
The share-based payment charge for the period, included in people costs, was £4.2m (H1 2023: £2.1m)
largely driven by a higher share price which increases the national insurance associated with the
awards.
30 June
30 June
2023
2024
Continuing operational
Continuing operations
Change
£m £m %
People costs (before exceptional items) 41.3 36.9 12%
Less capitalised development spend (“CDS”) (5.2) (5.2) 0%
People costs net of CDS 36.1 31.7 14%
Average headcount (incl. contractors) 834 843 -1%
Period-end headcount (incl. contractors) 814 831 -2%
Following the restructuring, the headcount of the continuing business was c.760.
Marketing costs comprise above the line marketing channels (direct mail and online), brand spend
and commission payments made to brokers. Marketing increased in the period to £22.3m (H1 2023:
£17.6m).
Excluding FlexiPay, the Term Loans businesses invested 29% of operating income in marketing (H1
2023: 28%) with two thirds of marketing being through the broker channel, similar to H1 2023.
Conversion rates have improved since H1 2023 by nearly 20%.
Depreciation, amortisation and impairment costs of £6.8m (H1 2023: £6.0m) largely represent the
amortisation of the cost of the Group’s capitalised technology development and the depreciation of
right-of-use assets related to the Group’s office leases. The increase in the year primarily
reflects the increased level of amortisation from capitalised projects. Included within this charge
is £0.3m exceptional impairment of intangibles related to projects used for activities
deprioritised as a result of our go forward focus.
Expected credit losses principally relate to the IFRS9 charge for FlexiPay where we account for
actual and future expected credit losses from SME’s defaulting on their lines of credit. We would
expect this charge to increase as FlexiPay grows.
Balance sheet and investments
The Group’s net equity was £229m at 30 June 2024 (31 December 2023: £247m). This includes the US
business until it was sold on 1 July 2024. This reduction reflects the Group’s operating losses,
the share buyback by the Group and foreign exchange losses on the retranslation of the investment
in the US Loans business.
The majority of the Group’s balance sheet is represented by cash and invested capital as shown
below. The invested capital is in certain SME loans, either directly or historically through
investment vehicles, and in the FlexiPay lines of credit.
30 June 31
Operating business Investment business 2024 December
2023
Legacy
Loans loans CBILS/RLS/ Private
business 9 7 FlexiPay at Commercial funds
fair co-investments Total Total
value
£m £m £m £m £m £m £m
SME loans 4.7 71.6 8.2 18.7 1.0 104.2 102.0
Cash and cash
equivalents
Unrestricted 163.4 1.0 - - - 164.4 169.6
Restricted 1.1 20.7 - 5.9 - 27.7 51.8
Other - 3.4 - - 3.4 2.7
assets/(liabilities)
Borrowings/bonds (1.6) (72.4) - - - (74.0) (56.9)
Cash and net 167.6 24.3 8.2 24.6 1.0 225.7 269.2
investments
Other assets 51.2 - - - - 51.2 47.1
Other liabilities (42.0) - - (5.9) - (47.9) (69.5)
Equity 176.8 24.3 8.2 18.7 1.0 229.0 246.8
The table below provides a summation of Funding Circle’s net invested capital in products and
vehicles:
30 June
31 December 2023
Investment in product/vehicles 2024
£m
£m
1. Legacy loans at fair value 8 19
2. CBILS/RLS/Commercial co-investments 10 8 19 25
3. Private funds 1 2
Net invested 28 46
4. FlexiPay 24 18
Total net invested capital 52 64
1. Legacy loans at fair value – this relates to the legacy loans previously held in SPVs and
warehouses. During 2023, the Group called options to wind down the US securitisation (SBIZ-20A)
and in 2022, the Group called options to wind down UK (SBOLT-19A) and US (SBIZ-19A)
securitisations and bought out the remaining bondholders. These loans continue to amortise down
with £5.9m legacy loans associated with the US being sold with the US business on 1 July 2024.
2. CBILS/RLS/Commercial co-investments – As part of our participation in the CBILS and RLS UK
government-guaranteed loan schemes, we were required to co-invest c.1% alongside institutional
investors.
3. Private funds – There are a small amount of other loans, comprising seed investments in private
funds held as associates.
7 Loans business includes the US and therefore includes £1.6m of PPP loans together with the
associated Federal Reserve borrowings.
8 These vehicles are bankruptcy remote.
Cash flow
At 30 June 2024, the Group’s cash position was £192.1m (31 December 2023: £221.4m). Of this balance
£164.4m (31 December 2023: £169.6m) is unrestricted in its use.
Restricted cash was £27.7m (31 December 2023: £51.8m) and relates to cash held in the funding
vehicle of FlexiPay together with amounts owed to the British Business Bank (“BBB”) for guarantee
fees collected from institutional investors under the participation of the CBILS and RLS schemes.
The reduction relates to the payment of the guarantee fees to the BBB in H1 2024.
Total cash movements have principally been driven by:
i. Trading performance
ii. Timing of working capital movements associated with UK government loan guarantee payments
received from investors still to be paid to the British Business Bank
iii. Monetisation of on-balance sheet SME loans as they have continued to pay down
iv. Ongoing investment in FlexiPay lines of credit with external bank debt
v. Purchase of shares as part of the share buyback programme.
Free cash flow, which is an alternative performance measure, is defined in the glossary. The
Directors view this as a key liquidity measure and it is the net amount of cash used or generated
to operate and develop the Group’s platform each year.
The table below shows how the Group’s cash has been utilised:
30 June 2024 30 June 2023
£m £m
Adjusted EBITDA from continuing operations 11.0 0.8
Adjusted EBITDA from discontinued operations (8.7) (3.8)
Adjusted EBITDA 2.3 (3.0)
Fair value adjustments (5.0) (3.4)
Purchase of tangible and intangible assets (7.5) (6.8)
Payment of lease liabilities (2.4) (3.0)
Working capital/other 0.7 (1.0)
Free cash flow (excl. restricted cash movement due to guarantee fee (11.9) (17.2)
payment)
Cash movement due to guarantee fee payment (25.2) 12.1
Free cash flow (37.1) (5.1)
Net distributions from associates 0.5 0.7
Net movement in trusts and co-investments 9.1 3.4
Net movement in lines of credit (net of borrowings) (7.4) 15.0
Net movement in SME loans at amortised cost (net of borrowings) 1.5 (1.9)
Net movement in loans at fair value through profit and loss (net of 12.2 16.2
bonds)
Share buyback/purchase of own shares (8.2) (1.8)
Effect of foreign exchange 0.1 (0.7)
Movement in the year (29.3) 25.8
Cash and cash equivalents at the beginning of the period 221.4 177.7
Cash and cash equivalents at the end of the period 192.1 203.5
Of the cash and cash equivalents at 30 June 2024, £23.1m was presented within a disposal group
related to the US business.
Subsequent events
Disposal of the US business:
The sale of the US business to iBF was completed after the balance sheet date on 1 July 2024.
The Group received cash consideration of £32.5m and incurred estimated direct transaction costs for
legal and advisory and other costs of £2.2m. Additionally share options that had been granted to US
employees who transferred with the sold business lapsed resulting in a credit of £1.5m. £23.1m of
cash and cash equivalents transferred with the sold assets.
The net assets of the US business were £22.2m (£0.9m net liability after excluding cash mentioned
above), resulting in an estimated gain on sale for the Group of £9.6m.
The assets and liabilities of the US business were deconsolidated on 1 July 2024. As a result, the
cumulative retranslation of the net assets of the Group’s net investment in the US business were
recycled from the foreign currency translation reserve into realised foreign exchange gains in the
statement of comprehensive income totalling £8.6m. This resulted in an estimated total gain as a
result of disposal of £18.2m. There was no tax on the gain.
Details of the sale of the US business: £m
Consideration received:
i) Cash consideration at prevailing exchange rate 32.5
ii) Net assets disposed on (including cash and cash equivalents of £23.1m) (22.2)
Gross gain on sale 10.3
iii) Direct transaction costs for legal, advisory and other costs (2.2)
Net impact of (early vesting)/lapsing US share options 11 9 1.5
Other disposal related costs (0.7)
Gain on sale 9.6
Reclassification of foreign currency translation reserve9 8.6
Total gain as a result of disposal after reclassification of foreign currency translation 18.2
reserve
The below table illustrates the immediate impact of the above sale of the US business on the net
assets of the Group:
30 June ii) Disposal of
US business i) and iii) Proceeds from 01 July
2024 sale of US business (less 2024
costs to sell) 9
£m £m £m £m
Cash and cash equivalents
(including those held in 192.1 (23.1) 32.5 201.5
disposal group)
Other disposal group 12.9 (12.9) — —
assets
Other assets 145.9 — — 145.9
Total assets 350.9 (36.0) 32.5 347.4
Disposal group liabilities 13.8 (13.8) — —
Other liabilities 108.1 — 2.2 110.3
Total liabilities 121.9 (13.8) 2.2 110.3
Net assets 229.0 (22.2) 30.3 237.1
Share buyback
In the period to 30 June 2024, as part of the Group’s share buyback programme of up to £25m,
announced in March 2024, the Group has bought back 12,036,655 ordinary shares at a cost of £8.2m.
We intend to do a further share buyback of up to £25m once the existing programme completes which
is expected in Q4 2024 and will announce this programme separately before it commences.
9 The net impact of (early vesting)/lapsing US share options of £1.5m credit and reclassification
of foreign currency translation reserve of £8.6m related to the sale of the US business are not
included in the table above as they are predominantly a reclassification within reserves and
therefore not net asset impacting.
Principal risks and uncertainties
The Group’s principal risks and uncertainties were disclosed on pages 59 to 69 of the Funding
Circle Holdings plc 2023 Annual Report and Accounts after review and approval by the Board. The
Group considers that the overall principal risks and uncertainties, risk appetite, key risks and
management of risks remain unchanged for the six months ended 30 June 2024.
The principal risks include:
- Strategic risk, including the economic environment and environmental, social and governance risk;
- Funding and balance sheet risk;
- Credit risk, including borrower acquisition and portfolio management risk;
- Regulatory, reputation and conduct risk;
- Operational risk, including process risk, financial crime and client money risk; and
- Technology risk, including information security and data risk.
Statement of Directors’ Responsibilities
The Directors confirm that these condensed interim financial statements have been prepared in
accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and
the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct
Authority, give a true and fair view of the assets, liabilities, financial position and profit and
loss as required by DTR 4.2.4 and that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the first six months and their
impact on the condensed set of interim financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year; and
• material related-party transactions in the first six months and any material changes in the
related-party transactions described in the last Annual Report and Accounts.
The maintenance and integrity of the Funding Circle Holdings plc website is the responsibility of
the directors; the work carried out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any changes that might have occurred to
the interim financial statements since they were initially presented on the website.
The Directors of Funding Circle Holdings plc are listed in the Funding Circle Holdings plc Annual
Report and Accounts for 31 December 2023. A list of current directors is maintained on the Funding
Circle Holdings plc website: www.corporate.fundingcircle.com.
By order of the Board
Lisa Jacobs, Chief Executive Officer
5 September 2024
Oliver White, Chief Financial Officer
5 September 2024
Condensed consolidated statement of comprehensive income
For the six months to 30 June 2024 (unaudited)
6 months to 6 months to
30 June 2024 30 June 2023
(Re-presented)2
Before exceptional Exceptional items1 Total Total
items
Note £m £m £m £m
Transaction fees 42.1 — 42.1 29.6
Servicing fees 18.6 — 18.6 20.4
Interest income3 14.1 — 14.1 5.1
Other fees 2.5 — 2.5 2.9
Operating income 6 77.3 — 77.3 58.0
Investment income 1.6 — 1.6 1.7
Investment expense — — — —
Total income 6 78.9 — 78.9 59.7
Fair value gains 2.8 — 2.8 0.4
Cost of funds (2.6) — (2.6) (0.4)
Net income4 6 79.1 — 79.1 59.7
People costs (36.1) (2.3) (38.4) (31.7)
Marketing costs (22.3) — (22.3) (17.6)
Depreciation, amortisation (6.5) (0.3) (6.8) (6.0)
and impairment
Expected credit loss charge 7, 15, 19 (3.8) — (3.8) (2.0)
Other costs (9.9) — (9.9) (9.8)
Operating expenses 7 (78.6) (2.6) (81.2) (67.1)
Profit/(loss) before 6 0.5 (2.6) (2.1) (7.4)
taxation
Income tax 8 (0.2) — (0.2) (0.2)
Profit/(loss) for the period 0.3 (2.6) (2.3) (7.6)
from continuing operations
Loss for the period from 4 (10.2) — (10.2) (10.5)
discontinued operations
Loss for the period (9.9) (2.6) (12.5) (18.1)
Other comprehensive income
Items that may be
reclassified subsequently to
profit and loss:
Exchange differences on
translation of foreign (0.1) — (0.1) 0.3
operations – continuing
operations
Exchange differences on
translation of foreign 4 (0.2) — (0.2) (2.7)
operations – discontinued
operations
Total comprehensive loss for (10.2) (2.6) (12.8) (20.5)
the period
Total comprehensive loss
attributable to:
Owners of the parent
Profit/(loss) from 0.2 (2.6) (2.4) (7.3)
continuing operations
Loss from discontinued 4 (10.4) — (10.4) (13.2)
operations
Total loss attributed to (10.2) (2.6) (12.8) (20.5)
owners of the parent
Earnings per share
Basic and diluted (loss)/earnings per share from continuing operations 9 0.1p (0.7)p (2.2)p
Basic and diluted (loss)/earnings per share from discontinued operations 9 (2.9)p (2.9)p (3.0)p
1 Exceptional items are detailed in Note 5.
2 The comparative consolidated statement of comprehensive income has been re-presented to reflect
the results of the US business as a discontinued operation. See note 4
3 Interest income recognised on assets held at amortised cost under the effective interest rate
method and £4.1 million (2023: £2.5 million) on money market funds held at fair value through
profit and loss.
4 Net income is also referred to as “Revenue”.
Condensed consolidated balance sheet
As at 30 June 2024 (unaudited)
31 December
30 June
2023
2024
Re-presented1
Note £m £m
Non-current assets
Intangible assets 10 22.9 23.0
Property, plant and equipment 11 10.2 5.0
Investment in associates 12 1.0 1.5
Investment in trusts and co-investments 15 18.0 25.2
SME loans held at amortised cost1 15 2.8 6.7
Trade and other receivables — 1.4
54.9 62.8
Current assets
SME loans held at fair value through profit and loss1 15 2.3 18.6
Lines of credit 15 71.6 50.0
Trade and other receivables 17.1 20.4
Cash and cash equivalents 17 169.0 221.4
Cash and cash equivalents held in disposal group assets 4, 17 23.1 —
Other disposal group assets2 4 12.9 —
296.0 310.4
Total assets 350.9 373.2
Current liabilities
Trade and other payables 22.7 54.3
Bank borrowings 13, 16 72.4 54.7
Short-term provisions and other liabilities 14 4.4 1.5
Lease liabilities 11 1.6 7.2
Disposal group liabilities2 4 13.8 —
114.9 117.7
Non-current liabilities
Long-term provisions and other liabilities 14 0.6 1.1
Bank borrowings 13, 16 — 2.2
Lease liabilities 11 6.4 5.4
7.0 8.7
Total liabilities 121.9 126.4
Equity
Share capital 0.4 0.4
Share premium account 293.3 293.1
Foreign exchange reserve 13.9 14.2
Share options reserve 23.7 24.0
Accumulated losses (102.3) (84.9)
Total equity 229.0 246.8
Total equity and liabilities 350.9 373.2
1. SME loans have been presented under aggregated headings and the comparative period re-presented
in order to simplify the presentation of these loans as the balances become less material. See note
1 for details.
2. The assets and liabilities of the US business at 30 June 2024 have been presented under
“Disposal group assets” and “Disposal group liabilities” respectively. See note 4 for further
details.
These condensed interim financial statements were approved by the Board on 05 September 2024. They
were signed on behalf of the Board by:
O White
Director
Condensed consolidated statement of changes in equity
For the six months to 30 June 2024 (unaudited)
Share Share Foreign Share (Accumulated Total
capital premium exchange options losses)/retained equity
account reserve reserve earnings
£m £m £m £m £m £m
Balance as at
0.4 293.1 14.2 24.0 (84.9) 246.8
1 January 2024
Loss for the period - - - - (12.5) (12.5)
Other comprehensive income:
Exchange differences on translation - - (0.3) - - (0.3)
of foreign operations
Transactions with owners
Issue of share capital - 0.2 - - - 0.2
Purchase of own shares held in - - - - - -
employee benefit trust
Buyback and cancellation of own - - - - (8.2) (8.2)
shares
Transfer of share option costs - - - (3.3) 3.3 -
Employee share schemes – value of - - - 3.0 - 3.0
employee services
Unaudited balance at
0.4 293.3 13.9 23.7 (102.3) 229.0
30 June 2024
Balance as at
0.4 293.1 16.9 22.2 (48.6) 284.0
1 January 2023
Loss for the period - - - - (18.1) (18.1)
Other comprehensive income:
Exchange differences on translation - - (2.4) - - (2.4)
of foreign operations
Transactions with owners
Issue of share capital - - - - - -
Purchase of own shares held in - - - - (1.8) (1.8)
employee benefit trust
Transfer of share option costs - - - (2.7) 2.7 -
Employee share schemes – value of - - - 2.5 - 2.5
employee services
Unaudited balance as at
0.4 293.1 14.5 22.0 (65.8) 264.2
30 June 2023
Condensed consolidated statement of cash flows
For the six months to 30 June 2024 (unaudited)
6 months to
6 months to
30 June 2023
Note 30 June 2024
Re-presented1
£m £m
Net cash outflow from operating activities 16 (52.4) (11.1)
Investing activities
Purchase of intangible assets (5.3) (6.4)
Purchase of property, plant and equipment (2.2) (0.4)
Originations of SME loans held at amortised cost1 15 (0.2) (3.5)
Cash receipts from SME loans held at amortised cost1 15 2.2 17.5
Originations of SME loans held at fair value through profit and 15 - (12.0)
loss1
Cash receipts from SME loans held at fair value through profit and 15 12.2 21.1
loss1
Proceeds from sale of SME loans held at fair value through profit 15 - 30.6
and loss1
Investment in trusts and co-investments 15 (1.5) -
Cash receipts from investment in trusts and co-investments 15 10.6 3.4
Redemption in associates 12 0.5 0.6
Dividends from associates 12 - 0.1
Net cash inflow from investing activities 16.3 51.0
Financing activities
Proceeds from bank borrowings 16 20.0 30.8
Repayment of bank borrowings 16 (2.9) (15.9)
Payment of bond liabilities 15 - (23.5)
Proceeds from the exercise of share options 0.2 -
Purchase of own shares - (1.8)
Share buyback (8.2) -
Proceeds from subleases 0.4 0.6
Payment of lease liabilities (2.8) (3.6)
Net cash inflow/(outflow) from financing activities 6.7 (13.4)
Net (decrease)/increase in cash and cash equivalents (29.4) 26.5
Cash and cash equivalents at the beginning of the period 221.4 177.7
Effect of foreign exchange rate changes 0.1 (0.7)
Cash and cash equivalents at the end of the period 17 192.1 203.5
1. SME loan related cash flows have been presented under aggregated headings and the comparative
period re-presented. See note 1 for details.
Cash flows from discontinued operations are shown in note 4.
Notes to the condensed interim financial statements
For the six months to 30 June 2024 (unaudited)
1. Basis of preparation
General information
Funding Circle Holdings plc (‘the Company’) is a public limited company which is listed on the
London Stock Exchange and is domiciled and incorporated in the United Kingdom under the Companies
Act 2006. The Company’s registered office is 71 Queen Victoria Street, London, EC4V 4AY.
These condensed interim financial statements have been prepared as at, and for the six months to,
30 June 2024. The comparative financial information presented has been prepared for the six months
to 30 June 2023 and as at 31 December 2023.
The interim financial information presented as at, and for the six months to, 30 June 2024 comprise
the Company and its subsidiaries (together referred to as the “Group”). The consolidated financial
statements of the Group as at, and for the year to, 31 December 2023 are available on request from
the Company’s registered office and via the Company’s website.
Going concern
The Group made a total comprehensive loss of £12.8 million during the six months to 30 June 2024
(30 June 2023: £20.5 million loss). As at 30 June 2024 the Group had net assets of £229.0 million
(31 December 2023: £246.8 million). This included cash and cash equivalents of £192.1 million (31
December 2023: £221.4 million) of which £27.7 million (31 December 2023: £51.8 million) is
restricted. Additionally within the net assets the Group holds £52.2 million (31 December 2023:
£63.5 million) of invested capital, some of which is capable of being monetised if liquidity needs
arise.
The condensed interim financial statements are prepared on a going concern basis as the Directors
are satisfied that the Group has the resources to continue in business for the foreseeable future
(which has been taken as 12 months from the date of approval of the condensed interim financial
statements).
The Group has prepared detailed cash flow forecasts for the next 15 months and has updated the
going concern assessment.
The base case scenario assumes:
• The economic environment remains uncertain. This is factored into the 2024 credit risk
strategies which include stressed assumptions;
• Ongoing investment in FlexiPay along with growth in UK Term Loans following the exit of the US
loans business;
• FlexiPay sees significant growth in top line as lines of credit become established and the cash
back card becomes a fully functional offering;
• The Group continues to fund the lines of credit through its balance sheet along with the senior
banking facility; and
• Costs are controlled with any growth driven by marketing, expected credit losses (ECL) and cost
of funds. Remaining costs grow but predominantly through inflation.
Management prepared a severe but plausible downside stress scenario in which:
• Further macroeconomic volatility continues through the period with elevated inflation and
interest rates reducing Core originations and increasing costs;
• investment returns reduce owing to increased funding costs, widening discount rates and
deterioration in loan performance;
• an operational event occurs requiring a cash outlay;
• a downside loss scenario is applied to Funding Circle’s on-balance sheet investment in SME
loans resulting in higher initial fair value losses and lower cash flows to the investments it
owns; and
• a combined credit and liquidity risk stress for FlexiPay.
Management has reviewed its regulatory capital requirements. In the downside scenario the risk of
capital requirement breach is considered remote. The Group does not currently rely on committed or
uncommitted borrowing facilities, with the exception of a facility for the purpose of originating
FlexiPay lines of credit and a small remaining balance on the PPP Liquidity Facility (“PPPLF”)
previously used to fund Payment Protection Programme (“PPP”) loans, and does not have undrawn
committed borrowing facilities available to the wider Group.
The Directors have made enquiries of management and considered budgets and cash flow forecasts for
the Group and have, at the time of approving these financial statements, a reasonable expectation
that the Company and the Group have adequate resources to continue in operational existence for the
foreseeable future.
Basis of preparation
These condensed interim financial statements, which have been reviewed and not audited, have been
prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with UK adopted IAS 34, “Interim Financial Reporting”. They do not include all of the
information required for full annual financial statements, and should be read in conjunction with
the consolidated financial statements of the Group as at and for the year to 31 December 2023 which
have been prepared in accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The financial information included in these condensed interim financial statements does not
constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 (the
‘Act’). The statutory accounts for the year ended 31 December 2023 have been reported on by the
Company’s auditors and were delivered to the Registrar of Companies following the Company’s Annual
General Meeting. The auditor’s report was (i) unqualified, (ii) did not include a reference to any
matters to which the auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 of the Act.
Significant changes in the current reporting period
The financial position and performance of the Group was affected by the following events and
transactions during the six months to 30 June 2024:
i. Sale of the US business
As was previously announced in the 31 December 2023 financial results, the Group sought to divest
of the US business. A competitive bid process was undertaken with interested parties and a sale
agreement was signed on 24 June 2024 to sell the business to IBusiness Funding, LLC (“iBF”) and
completion occurred on 1st July 2024. As a result of the sale of the US business unit, the
business and assets related to the US were considered to form a disposal Group under IFRS 5
‘Non-current assets held for sale and discontinued operations’. The operations of the US business
have been disclosed in the consolidated statement of comprehensive income separately as a
discontinued operation, and the comparative period restated on the same basis and the assets and
liabilities of the US are presented as disposal group assets and liabilities on the balance sheet
as at 30 June 2024. Details related to the discontinued operations can be found in note 4.
The US business was subsequently deconsolidated on 1 July 2024. Details of the events subsequent to
the balance sheet date can be found in note 20.
ii. Simplification and streamlining of business
As part of its ongoing commitment to profitability, the Group launched a cost efficiency programme
during the period. This process will result in a simpler, leaner and better positioned UK focused
operation. Non-recurring costs to achieve these changes have been recorded as exceptional items.
See note 5.
iii. Launch of share buyback programme
As was previously announced, the Group commenced a share buyback programme in March 2024 to buy and
cancel up to £25 million of shares in order to return value to shareholders. The nominal cost of
the shares cancelled reduces the Group’s share capital with an equal increase in the capital
redemption reserve. The full cost of the buyback inclusive of stamp duty and broker fees is
debited to retained earnings. In the period to 30 June 2024, 12,036,655 shares were purchased for
consideration of £8.2 million inclusive of fees and expenses under the programme.
iv. Modification to UK office lease
During February 2024, the Group signed an agreement to modify the terms of its lease on the two
levels of the UK office previously expiring in March 2025, shortening one to expire in June 2024
and extending the other to March 2035 with termination options in March 2030. Both were accounted
for as a lease modification. See note 11 for details.
v. Investment in trust and co-investment transactions
During the period ended 30 June 2024, certain warehouses invested in trusts in which FC is a
minority co-investor sold their loan assets to a third party and FC partially re-invested alongside
the purchaser. As a result of the transaction, the net cash flows from the investment were
realised sooner and a net fair value gain of £2.2m was recognised through fair value gains in the
consolidated statement of comprehensive income. The cash flows related to the transaction are
presented net within ‘Cash receipts from investment in trusts and co-investments’ in the statement
of cash flows, reflecting the net settlement of the realisation and re-investment.
2. Changes in material accounting policies
With the exception of the below, the accounting policies, methods of computation and presentation
adopted in the preparation of the condensed interim financial statements are consistent with those
followed in the preparation of the consolidated financial statements for the year ended 31 December
2023. The Group has not early adopted any other standard, interpretation or amendment that has been
issued but is not yet effective.
A number of new or amended standards became applicable for the current reporting period, however,
the Group did not have to change its accounting policies or make retrospective adjustments as a
result of adoption.
Re-presentation of SME loans:
On the balance sheet ”SME loans (securitised)”, “SME loans (warehouse)” and “SME loans (other)”
held at fair value through profit and loss have been presented under “SME loans held at fair value
through profit and loss” and “SME loans (Other)” held at amortised cost have been presented under
“SME loans held at amortised cost” in order to simplify the presentation of these loans as the
balances become less material with the comparative period re-presented on this basis. This
presentation and re-presentation has been applied to the applicable notes and cash flow statement
throughout these accounts.
Discontinued operations and deconsolidation
When the Group intends to sell assets or business units, IFRS 5 ‘Non-current assets held for sale
and discontinued operations’ is applied. An asset or group of assets is treated as a discontinued
operation if:
- it is available for immediate sale in its present condition;
- the sale must be highly probable, with management committed to a plan to sell the asset and an
active programme to locate a buyer initiated; and
- the sale should be expected to be completed within 1 year of classification as held for sale.
Where these criteria are met, the assets in the disposal group are measured at the lower of fair
value less cost to sell and their carrying value at the point they are considered to meet the
criteria. The results from the discontinued operations are presented separately in the
consolidated statement of comprehensive income with the comparative period restated on a like for
like basis.
Where a business unit of the Group is held as a discontinued operation with the intention of
selling it, it will remain consolidated for as long as the criteria for control as defined by IFRS
10 – ‘Consolidated Financial Statements’ are met. All three of these criteria must be met in order
to control an entity:
- power over the investee;
- exposure, or rights, to variable returns from its involvement with the investee; and
- the ability to use its power over the investee to affect the amount of the investor’s returns.
While an agreement might be signed to sell the operation, if the Group continues to meet the
criteria for control between signing and closing the transaction, deconsolidation will only occur
on closing once the criteria are no longer met.
Share buybacks
Shares purchased and cancelled by the Group as part of the share buyback programme reduce the
equity of the Group. The nominal cost of the shares purchased and cancelled is treated as a
reduction in share capital with an offsetting increase in the capital redemption reserve. The
capital redemption reserve is a non-distributable reserve which can be used to pay up new shares
allotted as fully paid bonus shares. The cost of the share purchase inclusive of stamp duty and
broker fees is debited to retained earnings.
3. Critical accounting judgments and key sources of estimation uncertainty
The preparation of the consolidated interim financial statements requires the Group to make
estimates and judgements that affect the application of policies and reported amounts. Critical
judgements represent key decisions made by management in the application of the Group accounting
policies. Where a significant risk of materially different outcomes exists due to management
assumptions or sources of estimation uncertainty, this will represent a key source of estimation
uncertainty.
Estimates and judgements are continually evaluated and are based on experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Although these estimates are based on management’s best knowledge of the amount, event or actions,
actual results ultimately may differ from those estimates.
The significant judgements and estimates applied by the Group in the interim financial statements
have been applied on a consistent basis with the financial statements for the year to 31 December
2023.
Critical judgements
a) Consolidation and deconsolidation of special purpose vehicles (“SPVs”)
As part of its asset-backed securitisation programmes in the past, and more recently in scaling up
the FlexiPay product, the Group has established SPVs. Judgement is required in determining who is
most exposed to the variability of returns and who has the ability to affect those returns and
therefore who should consolidate these vehicles and subsequently deconsolidate them. Where the
Group has a significant interest in the junior notes or tranches of the SPVs, the Group is deemed
to be exposed to the majority of the variability of the returns of those vehicles and controls
them, and therefore consolidates them. Where this proportional interest is reduced, the Group
considers whether the vehicles should be deconsolidated.
b) Loans originated through the platform
The Group originates SME loans through its platform which are funded primarily by banks, asset
managers and other institutional investors or by usage of its own capital. Judgement is required to
determine whether these loans should be recognised on the Group’s balance sheet. Where the Group,
its subsidiaries or SPVs which it consolidates have legal and beneficial ownership to the title of
those SME loans, they are recognised on the Group’s balance sheet. Where this is not the case, the
loans are not recognised at the point of origination.
c) Recognition of deferred tax
Under IAS 12, a deferred tax asset should be recognised for all deductible temporary differences
and tax losses to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference or tax losses can be utilised.
While the board-approved forecasts project the UK to be in a taxable profit position for the year
ended 31 December 2024 and beyond, there are risks to achieving this forecast and as a result it is
not considered highly probable. Management have used judgement in determining whether there is
sufficient certainty to recognise a deferred tax asset. The “European Securities and Markets
Authority (“ESMA”) has previously issued guidance relating to the recognition of deferred tax
assets in response to companies recognising assets too early only to subsequently write them off.
One of the key indicators suggested by ESMA for the recognition of deferred tax is whether taxable
profit is being recognised from which an entity has begun to offset losses. This is not yet the
case for the UK business and management have determined not to recognise a deferred tax asset as a
result. Had management determined a different level of certainty regarding the taxable profits of
the UK for the year end and beyond, then a deferred tax asset may have been recognised.
Key sources of estimation uncertainty
The following are the key sources of estimation uncertainty that the Directors have made in the
process of applying the Group’s accounting policies and have the most significant effect on the
amounts recognised in the interim financial statements.
a) Expected credit loss impairment of FlexiPay lines of credit (notes 14, 15 and 19)
At 30 June 2024 the Group held £80.4 million of drawn FlexiPay lines of credit and £223.1 million
of undrawn lines of credit, gross of expected credit loss impairment allowances.
While other financial assets of the Group are held at amortised cost, the FlexiPay lines of credit
are the most sensitive to estimation uncertainty due to the higher balance outstanding and more
limited historical data.
An expected credit loss impairment allowance is held against the lines of credit of £10.9 million
(£8.8 million related to drawn lines of credit and £2.1 million related to undrawn).
The Group estimates the expected credit loss allowance following IFRS 9 through modelling the
exposure at default based on observed trends related to the overall line of credit facility and the
proportion drawn at the time of default. The probability of default is estimated utilising observed
trends and combining these with forward-looking information including different macroeconomic
scenarios which are probability weighted. The loss given default is driven by assumptions regarding
the level of recoveries collected after defaults occur.
The area most sensitive to estimation uncertainty is the probability of default related to stage 1
lines of credit which is based on actual experience and the probability weighting of the
forward-looking scenarios utilised. Currently a baseline scenario, upside scenario and downside
scenario are utilised which are probability weighted 70% baseline, 10% upside and 20% downside,
which provide a blended stage 1 probability of default of 4.7%. If 100% probability weighting was
to be applied to the upside scenario the probability of default related to stage 1 lines of credit
would decrease by 140 bps to 3.3% and the expected credit loss impairment provision would decrease
by £1.3 million (£0.6 million on drawn lines of credit and £0.7 million on undrawn lines of
credit). If a 100% probability weighting was to be applied to the downside scenario, the stage 1
probability of default would increase 80 bps to 5.5% and the expected credit loss impairment would
increase by £0.7 million (£0.4 million on drawn lines of credit and £0.3 million on undrawn lines
of credit). It is considered that the above sensitivities represent the range of reasonably
possible outcomes in relation to the probability of default on stage 1 FlexiPay lines of credit.
4. Discontinued operations
The Group announced on 7th March 2024 its intention to divest of the US business. As of this date,
the US business was considered to form a disposal group and was reclassified as a discontinued
operation. An agreement was signed on 24 June 2024 to sell the business to iBusiness Funding LLC
and the transaction completed on 1 July 2024. As a result, Group retained control of the US
business until 1st July 2024 at which point it was deconsolidated, after the balance sheet date,
with the US business continuing to be classified as a discontinued operation on the balance sheet
as at 30 June 2024. More details regarding the subsequent sale can be found in note 20 –
subsequent events.
The current period and comparative period loss for the year from discontinued operations, segmental
results, cash flows from discontinued operations and component elements of the disposal group
assets and liabilities are detailed below.
Discontinued operations 30 June 2024 30 June 2023
Note £m £m
Transaction fees 10.3 12.1
Servicing fees 2.1 1.6
Interest income 0.7 0.7
Other fees 0.2 0.1
Operating income 13.3 14.5
Net investment income 0.7 2.4
Total income 14.0 16.9
Fair value gains 2.2 3.0
Net income 16.2 19.9
People costs (16.0) (13.1)
Marketing costs (3.7) (6.3)
Depreciation, amortisation, impairment and modification (0.3) (4.3)
gains/(losses)
(Charge)/credit for expected credit losses 15 (0.1) 0.1
Other costs (6.2) (5.5)
Operating expenses (26.3) (29.1)
(Loss)/profit before taxation (10.1) (9.2)
Income tax 8 (0.1) (1.3)
(Loss)/profit for the period from discontinued operations (10.2) (10.5)
Other comprehensive income
Exchange differences on translation of foreign operations – (0.2) (2.7)
discontinued operations
Total comprehensive loss for the period attributable to owners of (10.4) (13.2)
the parent
Earnings per share
Basic and diluted (loss)/earnings per share from discontinued 9 (2.9p) (3.0p)
operations
Segmental AEBITDA from discontinued operations
30 June 2024 30 June 2023
£m £m
Adjusted EBITDA (8.7) (3.8)
Discount unwind on lease liabilities (0.2) (0.3)
Depreciation, amortisation, impairment and modification gains/(losses) (0.3) (4.3)
Share-based payments and social security costs (1.0) (0.7)
Foreign exchange gains/(losses) 0.1 (0.1)
Loss before tax (10.1) (9.2)
Cash flow 30 June 2024 30 June 2023
£m £m
Cash and cash equivalents at the beginning of the period 22.3 13.8
Net cash outflow from operating activities (8.6) (6.6)
Net cash inflow from investing activities 9.8 50.4
Net cash outflow from financing activities (0.6) (39.4)
Net increase in cash generated 0.6 4.4
Effect of foreign exchange rate changes 0.2 (0.7)
Cash and cash equivalents at the end of the period 23.1 17.5
Assets and liabilities held for sale include the following items as at 30 June 2024
The below presents the assets and liabilities of the disposal group as they would appear on the
Group’s balance sheet were they not held in a disposal Group. All assets are presented as current
disposal group assets and all liabilities as current disposal group liabilities on the condensed
consolidated balance sheet.
Note 30 June 2024
£m
Non-current assets
Property, plant and equipment 11 0.3
Investment in trusts and co-investments 15 0.7
SME loans held at amortised cost 15 1.9
Trade and other receivables 1.0
3.9
Current assets
SME loans held at fair value through profit and loss 15 5.9
Trade and other receivables 3.1
Cash and cash equivalents 17 23.1
32.1
Total assets 36.0
Current liabilities
Trade and other payables 4.7
Lease liabilities 11 3.6
8.3
Non-current liabilities
Bank borrowings 13, 16 1.6
Lease liabilities 11 3.9
5.5
Total liabilities 13.8
Total net assets 22.2
5. Exceptional items
The Group reflects its underlying financial results in the ‘before exceptional items’ column of the
condensed consolidated statement of comprehensive income in order to provide a clear and consistent
view of trading performance.
As part of its ongoing commitment to profitability, the Group launched a simplification and
streamlining programme during the period. This process will result in a simpler, leaner and better
positioned UK focused operation. This resulted in redundancy costs of £2.3 million and impairment
of capitalised development spend intangible assets of £0.3 million, which were treated as
exceptional items.
6. Segmental information
IFRS 8 Operating Segments requires the Group to determine its operating segments based on
information which is used internally for decision making. Based on the internal reporting
information and management structures within the Group, it has been determined that there are two
continuing business and one discontinued US business operating segments. Reporting on this basis is
reviewed by the Executive Committee (“ExCo”) which is the chief operating decision maker (“CODM”).
The ExCo is made up of the Executive Directors and other senior management and is responsible for
the strategic decision making of the Group.
The Other segment historically included the Group’s term loan businesses in Germany and the
Netherlands. The Other segment has been presented within UK Term Loans for the period 30 June 2024
on the basis it is no longer individually material. The comparative period to 30 June 2023 has not
been re-presented as it is immaterial.
The ExCo measures the performance of each segment primarily by reference to profit before tax.
Additionally, the ExCo utilises a non-GAAP measure, Adjusted EBITDA, which is defined as profit for
the period before finance costs (being the discount unwind on lease liabilities), taxation,
depreciation, amortisation and impairments (“AEBITDA”) and additionally excludes share-based
payment charges and associated social security costs, foreign exchange and exceptional items.
AEBITDA is a measure of Group performance as it allows comparability of the underlying performance
of the business. The segment reporting, including AEBITDA, excludes the impact of the Group’s
transfer pricing arrangements as this is not information presented to, or used by, the CODM in
decision making or the allocation of resources.
30 June 20241 30 June 20231
Continuing operations Continuing operations
United Kingdom United Kingdom Other Total
Term FlexiPay Total Term FlexiPay Total Term Total
Loans Loans Loans
£m £m £m £m £m £m £m £m
Transaction fees 41.8 0.3 42.1 29.6 - 29.6 - 29.6
Servicing fees 18.6 - 18.6 20.2 - 20.2 0.2 20.4
Interest Income 4.3 9.8 14.1 2.8 2.3 5.1 - 5.1
Other fees 2.5 - 2.5 2.8 - 2.8 0.1 2.9
Operating income 67.2 10.1 77.3 55.4 2.3 57.7 0.3 58.0
Net investment income 1.6 - 1.6 1.7 - 1.7 - 1.7
Total income 68.8 10.1 78.9 57.1 2.3 59.4 0.3 59.7
Fair value gains/(losses) 2.8 - 2.8 0.4 - 0.4 - 0.4
Cost of funds - (2.6) (2.6) - (0.4) (0.4) - (0.4)
Net income 71.6 7.5 79.1 57.5 1.9 59.4 0.3 59.7
Adjusted EBITDA 18.3 (7.3) 11.0 8.8 (7.8) 1.0 (0.2) 0.8
Discount unwind on lease liabilities (0.3) - (0.3) (0.1) - (0.1) - (0.1)
Depreciation, amortisation,
impairment and modification (5.8) (0.7) (6.5) (5.5) (0.5) (6.0) - (6.0)
gains/(losses)
Share-based payments and social (3.5) (0.7) (4.2) (1.8) (0.3) (2.1) - (2.1)
security costs
Exceptional items (2.3) (0.3) (2.6) - - - - -
Foreign exchange gains/(losses) 0.5 - 0.5 - - - - -
Profit/(loss) before tax 6.9 (9.0) (2.1) 1.4 (8.6) (7.2) (0.2) (7.4)
1.The period to 30 June 2024 has presented ‘Other’ Term Loans within the UK business segment on the
basis that the legacy European operations included within Other are immaterial. The comparative
period has not been re-presented. The segmental results of the US business are not presented above
and are presented within note 4 – Discontinued Operations.
7. Operating expenses
30 June 30 June
2024 2023
Continuing operations Before exceptional items Exceptional items Total Total
£m £m £m £m
Depreciation and amortisation 6.9 - 6.9 6.0
Modification gains/(losses) (0.4) - (0.4) -
Impairment of intangibles, ROU assets and - 0.3 0.3 -
net investment in subleases1
Employment costs (including contractors) 36.1 2.3 38.4 31.7
Marketing costs (excluding employee costs) 22.3 - 22.3 17.6
Data and technology costs 3.6 - 3.6 3.3
(Charge)/credit for expected credit losses 3.8 - 3.8 2.0
Other expenses 6.3 - 6.3 6.5
Total operating expenses related to 78.6 2.6 81.2 67.1
continuing operations
8. Taxation
The Group calculates the period income tax expense using the tax rate that would be applicable to
the expected total annual earnings. The estimated average annual tax rate used for the six months
to 30 June 2024 (excluding the tax charge on Research and Development Expenditure Credits (RDEC))
is (2.09%), compared to 8.07% for the six months to 30 June 2023, which was primarily driven by the
revaluation of the deferred tax asset related to US losses. The deferred tax asset was
derecognised in December 2023.
The major components of income tax expense in the condensed consolidated statement of comprehensive
income are:
30 June 30 June
2024 2023
£m £m
Current tax
Corporation taxation on continuing operations 0.2 0.2
Corporation taxation on discontinued operations 0.1 0.1
Total current tax 0.3 0.3
Deferred tax
Deferred taxation on continuing operations - -
Deferred taxation on discontinued operations - 1.2
Total deferred tax - 1.2
Total tax charge/(credit) on continuing operations 0.2 0.2
Total tax charge/(credit) on discontinued operations 0.1 1.3
The above tax charge includes the amount of tax deducted from the gross RDEC credit receivable for
2024 of £0.2 million (2023: £0.2 million) and the state taxes of £0.1 million (2023: £0.1 million)
expected to be paid in the US on taxable profits for the six months to 30 June 2024.
The Group has unrelieved tax losses of £182.8m (31 December 2023: £183.4m) of which £114.5m relates
to continuing operations and are available for offset against future taxable profits and £68.3m
relates to discontinued operations.
Based on the Group’s current financial projections and current transfer pricing arrangements, the
estimate of the deferred tax asset in respect of a portion of these losses arising in the US was
£nil at 30 June 2024 (June 2023: £5.4 million, December 2023: £nil). The US business at 30 June
2024 is represented as discontinued operations.
9. (Loss) / Earnings per share
30 June 30 June 30 June
2024 2024 2023
Total Before exceptional items
£m £m £m
(Loss)/profit for the period from continuing operations (2.3) 0.3 (7.6)
Basic weighted average number of ordinary shares in issue 346.3 346.3 344.8
(million)
Basic (Loss)/profit per share from continuing operations (0.7)p 0.1p (2.2)p
(Loss)/profit for the period from continuing operations (2.3) 0.3 (7.6)
Diluted weighted average number of ordinary shares in 346.3 389.9 344.8
issue (million)
Diluted (loss)/profit per share from continuing operations (0.7)p 0.1p (2.2)p
30 June 30 June
2024 2023
Total Total
£m £m
(Loss)/profit for the period from discontinued operations (10.2) (10.5)
Basic weighted average number of ordinary shares in issue (million) 346.3 344.8
Basic (Loss)/profit per share from discontinued operations (2.9)p (3.0)p
(Loss)/profit for the period from discontinued operations (10.2) (10.5)
Diluted weighted average number of ordinary shares in issue (million) 346.3 344.8
Diluted (loss)/profit per share from discontinued operations (2.9)p (3.0)p
10. Intangible assets
Capitalised development costs Computer software Total
£m £m £m
Net book value
At 31 December 2023 22.8 0.2 23.0
At 30 June 2024 22.7 0.2 22.9
The amount of intangible assets held in disposal groups at 30 June 2024 was £nil.
11. Property, plant and equipment, right-of-use assets and lease liabilities
Analysis of property, plant and equipment between owned and leased assets
30 June 30 June 31 December
2024 2024 2023
Total Of which is presented within disposal Total
group
£m £m £m
Property, plant and equipment (owned) 2.7 - 1.7
Right-of-use assets 7.8 0.3 3.3
10.5 0.3 5.0
In February 2024, the Group signed an amendment to shorten the lease term on one of the UK office
floors to 30 June 2024 and extend the term on the other floor. The modification of the lease which
was shortened resulted in a net modification gain of £0.4m, and the lease liability and right of
use asset net of accumulated depreciation were de-recognised at 30 June 2024. The extension of the
term on the other floor resulted in an increase to the lease liability of £6.3 million and right of
use asset of £6.4 million before depreciation. Leasehold improvement additions associated with
re-fitting the retained floor totalled £1.5m.
At the balance sheet date, £0.3 million of right of use assets and £7.5 million of lease
liabilities had been reclassified to disposal groups.
Lease liabilities
30 June 30 June 31 December
2024 2024 2023
Total Of which is presented within disposal group Total
£m £m £m
Current 5.2 3.6 7.2
Non-current 10.3 3.9 5.4
Total 15.5 7.5 12.6
12. Investment in associates
The Group holds 8.3% of Funding Circle UK SME Direct Lending Fund I at 30 June 2024 (31 December
2023 and 30 June 2023: 8.3%) which is accounted for as investment in associates.
The Group’s share of profit from associates in the period was £nil (30 June 2023: share of profit
of £0.1 million), the Group received capital distributions of £0.5 million (30 June 2023: £0.6
million) and dividends of £nil (30 June 2023: £0.1 million).
13. Borrowings
During 2024 the Group continued to operate a leveraged warehouse for the purposes of scaling up the
FlexiPay product with a total committed facility of up to £150m which can be upsized to £325m. The
drawn balance on the facility at 30 June 2024 was £72.4 million (31 December 2023: £54.7 million).
Interest is charged on the drawn balance at SONIA plus a margin, together with a commitment fee.
The forward flow period of the facility was extended to mature in August 2025 effective June 2024.
During 2024, in the US, the Group has a drawn balance of £1.6 million (31 December 2023: £2.2
million) on the PPP Liquidity Facility available from the Federal Reserve Bank at a fixed interest
rate of 0.35% to fund PPP loans held on the Group’s balance sheet. The balance of both loans and
borrowings reduces as the loans are forgiven by the Small Business Administration (“SBA”). The
loans and borrowings are presented in disposal groups at 30 June 2024.
14. Provisions and other liabilities
Dilapidation Loan Restructuring Other Total
(Exceptional)1 liabilities2
repurchase
£m £m £m £m £m
At 1 January 2023 1.1 0.5 — 0.5 2.1
Exchange differences — — — — —
Additional — 0.3 — 0.8 1.1
provision/liability
Amount utilised — (0.3) — (0.2) (0.5)
Amount reversed — (0.2) — - (0.2)
At 30 June 2023 1.1 0.3 - 1.1 2.5
Exchange differences — — — — —
Additional — — — 0.4 0.4
provision/liability
Amount utilised — (0.2) — (0.1) (0.3)
Amount reversed — — — — —
At 31 December 2023 1.1 0.1 — 1.4 2.6
Exchange differences — — — — —
Additional — — 2.3 0.7 3.0
provision/liability
Amount utilised (0.3) (0.1) — — (0.4)
Amount reversed (0.2) — — — (0.2)
At 30 June 2024 0.6 — 2.3 2.1 5.0
1 See note 5 for details.
2 Other liabilities includes £2.1 million (31 December 2023: £1.4 million) of expected credit loss
impairment allowance related to undrawn FlexiPay lines of credit.
Current and non-current
30 June 31 December
2024 2023
£m £m
Current 4.4 1.5
Non-current 0.6 1.1
Total 5.0 2.6
15. Financial risk management
The Group’s financial risks and risk management objectives and policies are consistent with those
disclosed in the consolidated financial statements as at and for the year to 31 December 2023.
Financial risks arising from financial instruments are analysed into credit risk, liquidity risk,
market risk (including currency risk, interest rate risk and other price risk) and foreign exchange
risk. These condensed interim financial statements do not include all financial risk management
information and disclosures required in the annual financial statements. Details of how these risks
are managed are discussed in the Funding Circle Holdings plc’s financial statements for the year
ended 31 December 2023.
There has not been a significant change in the Group’s financial risk management processes or
policies since the year end. The assumptions used in determining the level of defaults and
recoveries which determine the fair value of loans remain consistent with those used at 31 December
2023.
The principal financial instruments used by the Group, from which financial instrument risk arises,
are as follows:
• SME loans;
• lines of credit;
• trade and other receivables;
• cash and cash equivalents;
• trade and other payables;
• loan repurchase liabilities;
• bonds;
• bank borrowings; and
• lease liabilities.
Categorisation of financial assets and financial liabilities
The table shows the carrying amounts of financial assets and financial liabilities by category of
financial instrument:
30 June 2024 31 December 20231
Fair Of which is Fair
value presented value
through Amortised Other Total within through Amortised Other Total
profit cost disposal profit cost
group and loss
and loss
£m £m £m £m £m £m £m £m £m
Assets
SME loans held at - 4.7 - 4.7 1.9 - 6.7 - 6.7
amortised cost1
SME loans held at fair
value through profit 8.2 - - 8.2 5.9 18.6 - - 18.6
and loss1
Lines of credit - 71.6 - 71.6 - - 50.0 - 50.0
Investment in trusts 18.7 - - 18.7 0.7 25.2 - - 25.2
and co-investments
Trade and other 0.7 16.9 - 17.6 4.1 0.8 15.8 - 16.6
receivables
Cash and cash 147.9 44.2 - 192.1 23.1 150.1 71.3 - 221.4
equivalents
175.5 137.4 - 312.9 35.7 194.7 143.8 - 338.5
Liabilities
Trade and other - (9.8) - (9.8) (2.3) - (35.0) - (35.0)
payables
Loan repurchase - - - - - - - (0.1) (0.1)
liability
Bank borrowings - (74.0) - (74.0) (1.6) - (56.9) - (56.9)
Lease liabilities - (15.5) - (15.5) (7.5) - (12.6) - (12.6)
- (99.3) - (99.3) (11.4) - (104.5) (0.1) (104.6)
1. SME loans have been presented under aggregated headings and the comparative period
re-presented. This presentation follows on all tables and references within this note. See note 1
for details.
Financial instruments measured at amortised cost
Financial instruments measured at amortised cost, rather than fair value, include cash and cash
equivalents, trade and other receivables, certain SME loans, lines of credit, bank borrowings,
lease liabilities, bonds, and trade and other payables. Due to their nature, the carrying value of
each of the above financial instruments approximates to their fair value.
Other financial instruments
Loan repurchase liabilities are measured at the amount of loss allowance determined under IFRS 9.
Financial instruments measured at fair value
IFRS 13 requires certain disclosures which require the classification of financial assets and
financial liabilities measured at fair value using a fair value hierarchy that reflects the
significance of the inputs used in making the fair value measurement.
Disclosure of fair value measurements by level is according to the following fair value measurement
hierarchy:
The fair value hierarchy has the following levels:
• level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
• level 2 inputs are inputs other than quoted prices included within Level 1 that are observable
for the asset or liabilities, either directly or indirectly; and
• level 3 inputs are unobservable inputs for the asset or liability.
The definitions, details of the inputs and the valuation techniques in determining the fair values
of the Group’s financial instruments are shown in the Funding Circle Holdings plc financial
statements for the year to 31 December 2023.
The Group's finance department performs the valuations of financial assets and liabilities required
for financial reporting purposes, including Level 3 fair values.
There have been no changes in the valuation techniques for any of the Group’s financial instruments
held at fair value in each of the periods presented. Details regarding the assumptions used within
such valuations are detailed in note 3.
The fair value of financial instruments that are not traded in an active market (for example, SME
loans) is determined by using valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2. The investments categorised as level 2 relate to derivative
financial instruments. If one or more of the significant inputs is not based on observable market
data, the instrument is included in level 3.
There were no transfers between Level 1, Level 2 and Level 3 fair value measurements (year ended 31
December 2023: none).
Fair value measurement using
30 June 2024 31 December 2023
Significant Significant Significant Significant
Quoted observable unobservable Quoted observable unobservable
prices in inputs inputs prices in inputs
active active Inputs
markets markets
(level 1) (level 2) (level 3) (level 1) (level 3)
(level 2)
£m £m £m £m £m £m
Financial assets
SME loans held at fair value - - 8.2 - - 18.6
through profit and loss
Trade and other receivables 0.7 - - 0.8 - -
Investment in trusts and - - 18.7 - - 25.2
co-investments
Cash and cash equivalents 147.9 - - 150.1 - -
148.6 - 26.9 150.9 - 43.8
The fair value of all SME loans held at fair value have been estimated by discounting future cash
flows of the loans using discount rates that reflect the changes in market interest rates and
observed market conditions at the reporting date. SME loans held at fair value through profit and
loss includes legacy loans previously held in warehouse and securitisation vehicles and loans
temporarily funded by the Group. The estimated fair value and carrying amount of the SME loans held
at fair value through profit and loss was £8.2 million at 30 June 2024 (31 December 2023: £18.6
million).
Investment in trusts and co-investments represents the Group’s investment in the trusts and other
vehicles used to fund CBILS, RLS and certain commercial loans and is measured at fair value through
profit and loss. The government-owned British Business Bank will guarantee up to 80% of the balance
of CBILS loans in the event of default and between 70% and 80% of RLS loans. The estimated fair
value and carrying amount of the investment in trusts and co-investments was £18.7 million at 30
June 2024 (31 December 2023: £25.2 million).
Fair value movements on SME loans held at fair value through profit and loss and investments in
trusts and co-investments are recognised through the profit and loss as part of net income.
A reconciliation of the movement in level 3 financial instruments is shown as follows:
SME loans held at fair Investment in trusts and
value through profit and co-investments
loss
£m
£m
Balance as at 1 January 2023 69.1 28.7
Additions 12.0 -
Repayments (21.1) (3.4)
Disposal (30.6) -
Net gain/(loss) on the change in fair value of
financial instruments at fair value through 3.6 (0.2)
profit or loss
Foreign exchange (loss)/gain (1.7) (0.1)
Balance as at 30 June 2023 31.3 25.0
Additions 0.1 1.8
Repayments (16.5) (3.2)
Net gain/(loss) on the change in fair value of
financial instruments at fair value through 3.8 1.5
profit or loss
Foreign exchange loss (0.1) 0.1
Balance as at 31 December 2023 18.6 25.2
Additions - 1.5
Repayments (12.2) (10.6)
Net gain/(loss) on the change in fair value of
financial instruments at fair value through 2.4 2.6
profit or loss
Other non-cash movements (0.7) -
Foreign exchange loss 0.1 -
Balance as at 30 June 2024 8.2 18.7
Financial risk factors
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Group’s
receivables from customers and cash and cash equivalents held at banks. The Group’s maximum
exposure to credit risk by class of financial asset is as follows:
30 June 31 December
2024 2023
£m £m
Non-current
SME loans held at amortised cost 4.7 6.7
Investment in trusts and co-investments 18.7 25.2
Trade and other receivables:
- Other receivables 1.0 1.4
Current
SME loans held at fair value through profit and loss 8.2 18.6
Lines of credit 71.6 50.0
Trade and other receivables
- Trade receivables 1.2 0.4
- Other receivables 8.9 7.3
- Accrued income 5.2 5.3
- Rent and other deposits 1.3 2.2
Cash and cash equivalents 192.1 221.4
Total gross credit risk exposure 312.9 338.5
Less bank borrowings and bond liabilities1 (74.0) (56.9)
Total net credit risk exposure 238.9 281.6
1. Included within bank borrowings are £1.6 m (31 December 2023: £2.2 million) in relation to draw
downs on the PPPLF and £72.4 million (31 December 2023: £54.7 million) related to the FlexiPay
warehouse.
In addition, the Group is subject to financial guarantees it has issued to buyback loans detailed
in the loan repurchase liability in note 14. The Group’s maximum exposure to credit risk on this
financial guarantee were every eligible loan required to be bought back would be £0.1 million (31
December 2023: £0.4 million).
Additionally, an expected credit loss allowance related to undrawn lines of credit on the FlexiPay
product of £2.1 million (31 December 2023: £1.4 million) is held within provisions and other
liabilities. The Group’s maximum exposure to credit risk on the undrawn lines of credit if they
were all to be fully drawn would be £223.1 million (31 December 2023: £157.3 million).
Trade receivables represent invoiced amounts in respect of servicing fees due from institutional
investors. The risk of financial loss is deemed minimal because the counterparties are well
established financial institutions.
Ongoing credit evaluation is performed on the financial condition of other receivables and, where
appropriate, a provision for impairment is recorded in the interim financial statements.
Other receivables include net investment in subleases of offices representing the present value of
future sublease payments receivable. Where appropriate, impairment is recorded where the receivable
is in doubt. The credit risk on cash and cash equivalents is limited because the counterparties are
banks with the majority holding credit ratings assigned by international credit rating agencies of
A- or higher.
SME loans held at fair value through profit and loss relate to the underlying pool of SME loans
which were in securitisation vehicles or which are loans which are from the legacy warehouses and
SPVs but have since been purchased or novated into other Funding Circle entities, but remain held
at FVTPL with the business model of holding the loans for sale. This category also includes loans
originated by the Group with the intention of selling onwards, which are held at FVTPL and are
therefore disclosed as current.
The majority of lines of credit are held within a bankruptcy remote vehicle including bank
borrowings. If the lines of credit were to all default, the senior lender would not receive all
their money back. Therefore, the overall exposure of the Group for this investment is the Group’s
net investment in the lines of credit which is after taking account of third party borrowings.
SME loans held at amortised cost includes PPP loans funded by the use of the PPPLF. The loans are
guaranteed by the US Government in the event of default and the loans are anticipated to be
forgiven. At the point of default and subsequent collection of the guarantee or point of
forgiveness, the loan and the respective borrowings under the PPPLF are extinguished. This
category also includes loans which have been brought back from investors and are held at amortised
cost.
Lines of credit includes £71.6 million (2023: £50.0 million) of drawn amounts through the FlexiPay
product, enabling businesses to spread UK invoices or payments over three months with the initial
payment made on a borrowers behalf.
The gross principal value of SME loans held at amortised cost is £18.8 million (2023: £21.4
million) and drawn lines of credit held at amortised cost is £80.4 million (2023: £55.4 million),
totalling £99.2 million (2023: £76.8 million).
An allowance for expected credit losses of £14.1 million (2023: £14.7 million) related to SME loans
held at amortised cost and £8.8 million (2023: £5.4 million) related to drawn lines of credit,
totalling £22.9 million (2023: £20.1 million), is held against these loans and drawn lines of
credit as detailed below.
Of the above, £6.7 million (2023: £nil) of the gross principal value of SME loans held at amortised
cost and £4.8 million (2023: £nil) of the expected credit loss allowance are held within a disposal
group.
An expected credit loss impairment charge of £3.2 million (30 June 2023: £1.2 million charge) was
recognised through the statement of comprehensive income in the period to 30 June 2024 within
(charge)/credit for expected credit losses.
Additionally, an expected credit loss impairment charge was recognised relating to undrawn FlexiPay
lines of credit of £0.7 million (30 June 2023: £0.8 million) and an expected credit loss impairment
credit of £nil (30 June 2023: credit of £0.1 million) related to the loan repurchase liability were
recognised as detailed in notes 14 and 19.
Performing: Underperforming: Non-performing: POCI Total
12-month Lifetime Lifetime Lifetime
ECL ECL ECL ECL
£m £m £m £m £m
At 1 January 2023 1.1 0.3 0.9 14.1 16.4
Impairment against new lending and 4.8 0.1 — 0.3 5.2
purchased assets
Exchange differences — — — (0.4) (0.4)
Impairment against loans transferred (0.1) 0.2 1.0 — 1.1
from/(to) performing
Loans repaid (4.0) — (0.1) (0.6) (4.7)
Change in probability of default or (0.5) — — 0.3 (0.2)
loss given default assumptions
At 30 June 2023 1.3 0.6 1.8 13.7 17.4
Impairment against new lending and 7.8 — 0.1 0.3 8.2
purchased assets
Exchange differences — — — (0.1) (0.1)
Impairment against loans transferred (0.2) 0.3 1.5 — 1.6
from/(to) performing
Loans repaid (6.5) — (0.1) (0.3) (6.9)
Change in probability of default or (0.8) 0.1 0.4 0.2 (0.1)
loss given default assumptions
At 31 December 2023 1.6 1.0 3.7 13.8 20.1
Impairment against new lending and 5.9 — — — 5.9
purchased assets
Exchange differences — — (0.1) (0.1) (0.2)
Impairment against loans transferred (0.2) 2.3 3.1 — 5.2
from /(to) performing
Loans repaid (5.2) (1.7) (0.2) (0.7) (7.8)
Impairment provision derecognised — — — (0.3) (0.3)
related to written off loans
Change in probability of default or 0.1 (0.1) (0.5) 0.5 —
loss given default assumptions
At 30 June 2024 2.2 1.5 6.0 13.2 22.9
Basis for Gross lines of Expected Net
Expected recognition of credit and SME credit loss carrying
credit loss expected credit loans held at impairment amount
coverage (%) loss impairment amortised cost
(£m) (£m) (£m)
As at 31 December 2023
Performing (due in 30 days or 2.9 12-month ECL 55.8 (1.6) 54.2
less)
Underperforming (31–90 days 50.0 Lifetime ECL 2.0 (1.0) 1.0
overdue)
Non-performing (90+ days overdue) 86.0 Lifetime ECL 4.3 (3.7) 0.6
POCI –Purchased or originated as 93.9 Lifetime ECL 14.7 (13.8) 0.9
credit impaired (90+ days overdue)
Total 76.8 (20.1) 56.7
As at 30 June 2024
Performing (due in 30 days or 3.0 12 month ECL 75.5 (2.2) 73.3
less)
Underperforming (31–90 days 48.7 Lifetime ECL 3.1 (1.5) 1.6
overdue)
Non-performing (90+ days overdue) 83.9 Lifetime ECL 7.1 (6.0) 1.1
POCI –Purchased or originated as 97.9 Lifetime ECL 13.5 (13.2) 0.3
credit impaired (90+ days overdue)
Total 99.2 (22.9) 76.3
Of which relates to disposal Total 6.7 (4.8) 1.9
groups
Expected Basis for Gross Expected credit Net carrying
Of which is drawn FlexiPay lines credit loss recognition of lines of loss impairment amount
of credit coverage (%) expected credit credit
loss impairment (£m) (£m) (£m)
As at 31 December 2023
Performing (due in 30 days or 2.7 12-month ECL 50.3 (1.4) 48.9
less)
Underperforming (31–90 days 54.5 Lifetime ECL 1.9 (1.0) 0.9
overdue)
Non-performing (90+ days 93.6 Lifetime ECL 3.2 (3.0) 0.2
overdue)
POCI –Purchased or originated as
credit impaired (90+ days — Lifetime ECL — — —
overdue)
Total 55.4 (5.4) 50.0
As at 30 June 2024
Performing (due in 30 days or 3.0 12 month ECL 71.1 (2.1) 69.0
less)
Underperforming (31–90 days 48.9 Lifetime ECL 3.0 (1.5) 1.5
overdue)
Non-performing (90+ days 83.3 Lifetime ECL 6.3 (5.2) 1.1
overdue)
POCI –Purchased or originated as
credit impaired (90+ days - Lifetime ECL - - -
overdue)
Total 80.4 (8.8) 71.6
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The Group’s approach to managing liquidity is to ensure that it will have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s position.
The Group’s liquidity position is monitored and reviewed on an ongoing basis by the Directors. As
the business model is to sell investments in loans held at fair value through profit and loss where
an attractive price can be found, these are classified as current assets.
Interest rate risk
a) Interest rate risk sensitivity analysis – fixed rate
Interest on SME loans and on the PPPLF borrowings is fixed until the maturity of the investment and
is not impacted by market rate changes.
b) Interest rate risk sensitivity analysis – floating rate
Interest on cash and cash equivalent balances is subject to movements in base rates. The Directors
monitor interest rate risk and note that rates have recently plateaued after a period of sustained
rate rises with an expectation of base rate decreases going forward. The Directors believe that a
reasonable decrease in the base rate of 100bps could reduce interest income recognised in the
statement of comprehensive income. A 100bps reduction in interest rates applied to the Group’s
cash position is estimated to reduce annual interest income by £1.9 million based on the 30 June
2024 cash and cash equivalent balances.
Interest on bank borrowings related to the FlexiPay lines of credit are subject to movements in
SONIA. The Group has partially protected itself through the use of an interest rate Cap with a
strike price of 6.5% and a notional amount that increases in line with the projected draw downs on
the senior borrowing facility.
If SONIA were to increase by 100bps, based on the drawn balance at 30 June 2024, the annualised
interest expense recognised in cost of funds would increase by £0.7m.
Some of the Group’s investment in trusts are through warehouse vehicles where the Group is a
minority equity investor. The senior borrowing facilities utilised in these vehicles receive
interest on borrowings in priority to payments to the equity investors at SONIA plus a margin.
Increases in SONIA or anticipated future increases, could result in increased borrowing costs,
reducing the expected cash returns to the equity investors of the investment held at fair value
through profit and loss. The impact would be recognised in fair value gains and losses in the
statement of comprehensive income. The vehicles had interest rate caps or interest rate swaps
within their structures which can mitigate the impact of future rate rises during the period to 30
June 2024. Equally, decreases in SONIA may increase the fair value, however where swap
arrangements are in place or where SONIA remains above the strike price of the interest rate caps
after any such decrease, this would limit any expected increase in the fair value.
16. Cash (outflow)/inflow from operations
30 June 30 June
2024 2023
£m £m
(Loss)/profit before taxation from:
Continuing operations (2.1) (7.4)
Discontinued operations (10.1) (9.2)
Total operations (12.2) (16.6)
Adjustments for:
Depreciation of property, plant and equipment 1.6 2.3
Amortisation of intangible assets 5.2 6.0
Impairment of ROU assets and investment in sublease - 2.0
Impairment of intangibles (exceptional item) 0.3 -
Interest payable 0.5 0.4
Non-cash employee benefits expense – share based payments and associated social 5.0 2.8
security costs
Fair value adjustments (5.0) (3.4)
Movement in restructuring provision (exceptional item) 2.3 -
Movement in loan repurchase liability (0.1) (0.2)
Movement in other provisions 0.2 0.6
Share of gains of associates - (0.1)
ECL impairment 3.9 1.9
Other non-cash movements 0.5 (0.8)
Changes in working capital:
Movement in trade and other receivables 0.9 (4.7)
Movement in trade and other payables (30.4) 14.8
Tax paid (0.1) (0.3)
Originations of lines of credit (216.6) (90.2)
Cash receipts from lines of credit 191.6 74.4
Net cash (outflow)/inflow from operating activities (52.4) (11.1)
Analysis of changes in liabilities from financing activities
1 January Exchange Other non-cash
Cash flows movements movements 30 June 2023
2023
£m £m £m £m £m
Bank borrowings (22.6) (14.9) 0.6 - (36.9)
Bonds (23.7) 23.5 0.5 (0.3) -
Lease liabilities (19.8) 3.6 0.4 (0.4) (16.2)
Liabilities from financing (66.1) 12.2 1.5 (0.7) (53.1)
activities
1 January Exchange Other non-cash
Cash flows movements movements 30 June 2024
2024
£m £m £m £m £m
Bank borrowings (56.9) (17.1) - - (74.0)
Lease liabilities (12.6) 2.8 (0.1) (5.6) (15.5)
Liabilities from financing (69.5) (14.3) (0.1) (5.6) (89.5)
activities
17. Cash and cash equivalents
30 June 31 December
2024 2023
£m £m
Cash and cash equivalents 192.1 221.4
At 30 June 2024, cash and cash equivalents of £23.1 million was presented within disposal groups.
The cash and cash equivalents balance is made up of cash, money market funds and bank deposits. The
carrying amount of these assets is approximately equal to the fair value.
Included within cash and cash equivalents above is a total of £27.7 million (31 December 2023:
£51.8 million) in cash which is restricted in use. Of this: i) £1.1 million (31 December 2023: £1.1
million) is held in the event of rental payment defaults; ii) a further £5.9 million (31 December
2023: £31.1 million) of cash is held which is restricted in use to repaying investors in CBILS and
RLS loans and paying CBILS and RLS-related costs to the UK government and iii) a further £20.7
million (31 December 2023: £19.6) of cash is held which is restricted for use in the FlexiPay
warehouse.
At 30 June 2024, cash equivalents relating to money market funds totalled £147.9 million (31
December 2023: £150.1 million).
18. Related party transactions
The basis of remuneration of key management personnel remains consistent with that disclosed in the
2023 Annual Report and Accounts.
19. Contingent liabilities and commitments
As part of the ongoing business, the Group has operational requirements with its investors. At any
point in time, it is possible that a particular investor may expect the Group to buyback their loan
if the terms of business had not been fully complied with. Where a loan is bought back it is
presented within SME loans held at amortised cost on the face of the consolidated balance sheet and
held at amortised cost under IFRS 9.
In common with other businesses, the Group is involved from time to time in disputes in the
ordinary course of business. There are no active cases expected to have a material adverse
financial impact on the Group.
The Group has commitments related to undrawn amounts on issued FlexiPay lines of credit. At 30 June
2024, there were undrawn commitments of £223.1 million (31 December 2023: £157.3 million). An
expected credit loss impairment allowance is held within other provisions by the Group of £2.1
million (2023: £1.4 million) in relation to the estimated credit losses the Group may be exposed to
on these undrawn lines of credit.
20. Subsequent events
As described in note 4, the sale of the US business to iBF was completed after the balance sheet
date on 1 July 2024.
The Group received cash consideration of £32.5m and incurred estimated direct transaction costs for
legal, advisory and other costs of £2.2m. Additionally share options that had been granted to US
employees who transferred with the sold business lapsed resulting in a credit of £1.5m. £23.1m of
cash and cash equivalents transferred with the sold assets. The net assets of the US business were
£22.2m (£0.9m net liability after excluding cash mentioned above), resulting in an estimated gain
on sale for the Group of £9.6m.
The assets and liabilities of the US business were deconsolidated on 1 July. As a result, the
cumulative retranslation of the net assets of the Group’s net investment in the US business were
recycled from the foreign currency translation reserve into realised foreign exchange gains in the
statement of comprehensive income totalling £8.6m (non-cash). This resulted in a total estimated
gain as a result of the disposal of £18.2m. There was no tax on the gain.
Details of the sale of the US business: £m
Consideration received:
Cash consideration at prevailing exchange rate 32.5
Net assets disposed on (including cash and cash equivalents of £23.1m) (22.2)
Gross gain on sale 10.3
Direct transaction costs for legal, advisory and other costs (2.2)
Net impact of (early vesting)/lapsing US share options 12 10 1.5
Other disposal related costs (0.7)
Gain on sale 9.6
Reclassification of foreign currency translation reserve9 8.6
Total gain as a result of disposal after reclassification of foreign currency translation 18.2
reserve
10 The net impact of (early vesting)/lapsing US share options of £1.5m credit and reclassification
of foreign currency translation reserve of £8.6m related to the sale of the US business are not
included in the table above as they are predominantly a reclassification within reserves and
therefore not net asset impacting.
Glossary
Alternative performance measures
The Group uses a number of alternative performance measures (“APMs”) within its financial
reporting. These measures are not defined under the requirements of IFRS and may not be comparable
with the APMs of other companies. The Group believes these APMs provide stakeholders with
additional useful information in providing alternative interpretations of the underlying
performance of the business and how it is managed and are used by the Directors and management for
performance analysis and reporting. These APMs should be viewed as supplemental to, but not as a
substitute for, measures presented in the financial statements which are prepared in accordance
with IFRS.
Closest equivalent Adjustments to
APM IFRS measure reconcile to IFRS Definition
measure
Income statement
Profit for the year before finance costs
EBITDA, while not (being the discount unwind on lease
defined under IFRS, liabilities), taxation, depreciation and
Adjusted EBITDA is a widely Refer to Finance amortisation and impairment (“AEBITDA”) and
accepted profit Review. additionally excludes share-based payment
measure charges and associated social security
costs, foreign exchange and exceptional
items.
Net investment Refer to Net investment income, represents
income Net income performance investment income less investment expense.
highlights
Items which the Group excludes from
Adjusted EBITDA in order to present a
measure of the Group’s performance. Each
item is considered to be significant in
nature or size and is treated consistently
Exceptional items None n/a between periods. Excluding these items from
profit metrics provides the reader with
additional performance information on the
business across the business as it is
consistent with how information is reported
to the Board and ExCo. Refer to note 5
Cash flow
Net cash flows from operating activities
less the cost of purchasing intangible
Cash generated from assets, property, plant and equipment,
Free cash flow operating Refer to Finance lease payments and interest received. It
activities Review. excludes the warehouse and securitisation
financing and funding cash flows and
excludes cash flows on draw downs and
repayment of FlexiPay lines of credit.
Independent review report to Funding Circle Holdings plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Funding Circle Holdings plc’s condensed consolidated interim financial statements
(the “interim financial statements”) in the Half Year 2024 Results of Funding Circle Holdings plc
for the 6 month period ended 30 June 2024 (the “period”).
Based on our review, nothing has come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority.
The interim financial statements comprise:
• the Condensed consolidated balance sheet as at 30 June 2024;
• the Condensed consolidated statement of comprehensive income for the period then ended;
• the Condensed consolidated statement of cash flows for the period then ended;
• the Condensed consolidated statement of changes in equity for the period then ended; and
• the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year 2024 Results of Funding Circle Holdings
plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom’s Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410,
‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued
by the Financial Reporting Council for use in the United Kingdom (“ISRE (UK) 2410”). A review of
interim financial information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
We have read the other information contained in the Half Year 2024 Results and considered whether
it contains any apparent misstatements or material inconsistencies with the information in the
interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report, nothing has come to our attention to
suggest that the directors have inappropriately adopted the going concern basis of accounting or
that the directors have identified material uncertainties relating to going concern that are not
appropriately disclosed. This conclusion is based on the review procedures performed in accordance
with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue
as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Half Year 2024 Results, including the interim financial statements, is the responsibility of,
and has been approved by the directors. The directors are responsible for preparing the Half Year
2024 Results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom’s Financial Conduct Authority. In preparing the Half Year 2024 Results, including
the interim financial statements, the directors are responsible for assessing the group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
group or to cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial statements in the Half Year
2024 Results based on our review. Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
5 September 2024
═══════════════════════════════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement that contains inside information in accordance with the
Market Abuse Regulation (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
═══════════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00BG0TPX62
Category Code: IR
TIDM: FCH
LEI Code: 2138003EK6UAINBBUS19
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 344836
EQS News ID: 1981827
End of Announcement EQS News Service
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