25th Mar 2019 11:47
LONDON (Alliance News) - GLI Finance Ltd on Monday reported a "mixed" 2018 as its annual loss widened, after it took a large write-down of its fintech investments but saw growth in its loan book
In 2018, the small and medium enterprise lender's pretax loss widened to GBP23.2 million from GBP15.2 million in 2017. Revenue increased 14% to GBP13.2 million from GBP11.6 million the year before.
"The group has seen mixed progress during 2018, with improving revenue, successfully securing a new funding line and reducing costs across the business balanced against poor developments in the FinTech Ventures portfolio," said Chief Executive Andy Whelan.
GLI Finance did not declare a dividend for 2018 but said it will look to reinstate a dividend when the company returns to profit.
The company's main operating unit, Sancus BMS, saw revenue increase 29% to GBP13.3 million.
Sancus's total loans in 2018 increased to GBP1 billion, from GBP797 million at the end of 2017, with an actual loss rate under 1%, which the lender attributed to "strong underwriting controls".
"The lending businesses that comprise Sancus BMS are strong, well managed, and have the ability to deliver a very attractive return on capital. We were delighted to have secured the GBP45 million credit facility from HIT announced in January, and this has helped us significantly grow the loan book. The new management team in the UK is making excellent progress in integrating the businesses and delivering synergies," said Whelan.
GLI Finance's fintech ventures suffered from "increased competition", which it said made it "increasingly difficult" for smaller companies to invest.
The carrying value of the fintech venture portfolio was GBP13.8 million at December 31, more than halved from GBP29.6 million a year before. GLI Finance's NAV per share for the portfolio also halved in 2018, to 5.1 pence from 10.0p.
The company had a GBP19.6 million write down due to "market challenges" in securing additional growth capital. The company said "it is clearly disappointing" to take a large write-down and said it continues to review its options.
CEO Whelan added: "Given the plethora of investment opportunities, investors are often able to negotiate favourable terms. With competing demands for our capital, we often haven't been able to follow our money, and this has resulted in situations where we have been significantly diluted. Several of our platforms are looking to raise equity over the next twelve months, and given the material write-downs incurred, we believe there is upside potential if these raises are successful."
Shares in GLI Finance were untraded Monday. They last closed at 5.5 pence each.
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GLIF.L