GLI Finance today announces a trading update.
The Group’s core business, Sancus BMS Group Limited (“Sancus BMS”), continues to grow, with revenue for the year ended 31 December 2018 (“FY18”) expected to be approximately £13 million, representing a 28% increase over the prior year. The Group also generated record loan origination levels in FY18 (approximately £168 million of funding, representing a 21% increase over the prior year).
Sancus Finance Limited (“Sancus Finance”), a subsidiary of the Group which operates its supply chain finance offering in the UK, remains loss making and while its performance improved in 2018, it is behind management’s expectations with a forecast operating loss of £1 million. The Group believes the market for supply chain finance has changed significantly, with credit insurers reducing appetite to write cover and increasing premiums markedly. In light of this, and recognising the difficult market conditions facing supply chain finance more generally, the Group has taken the decision to close its supply chain finance offering. The Group also has a £1.1 million exposure to a supply chain finance borrower which recently went into administration and the Group will prudently recognise a provision in respect of its full exposure in FY18.
Sancus BMS’s remaining operations in the UK will continue to provide education funding and asset backed lending. More broadly, the Group remains focussed on the core asset backed lending offering in the 6 jurisdictions in which it operates. Sancus BMS recently surpassed a £1 billion total lending milestone and, with a very strong pipeline and a proprietary electronic platform, the business is well placed to achieve further scale.
The Group also announces that it expects to suffer further material write downs in its Fintech Ventures portfolio. It has recently become apparent that several of the platforms are finding it harder to raise further capital at the valuation levels previously expected. Those that successfully raised further capital in 2018 are better placed to execute on their long-term business plans but this has, in some cases, resulted in a significant dilution for GLI.