Funding Circle surges as it makes strong start to 2021

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Funding Circle Holdings PLC (LON:FCH) shares surged on Wednesday as the peer-to-peer lender said it had made a “good start” to 2021 with trading being stronger than expected.

In a trading update, the company said its performance had been boosted by higher origination volumes in the UK and the extension of the paycheque protection program (PPP) loan scheme in the US. The group also said its loan book is stable and performing better than expected.

READ: Funding Circle turns a corner as small businesses switch to its peer-to-peer lending model

As a result of the strong start to 2021, Funding Circle said its total income and its adjusted earnings (EBITDA) are now expected to be “well ahead of previous expectations” with income for its first half now forecast to be no less than £120mln with earnings of at least £40mln.

The company also said its guidance for the balance of the year remains unchanged, and that its loans under management and originations over the course of the year will depend on how quickly the UK and US economies recovered.

The firm added that it expects to be earnings profitable for the full year, skewed to the first half.

“Our machine learning and technology platform is transforming the small business borrowing experience and as a result of Covid we are seeing an acceleration in the adoption of online borrowing, which has opened up an enlarged opportunity for Funding Circle. Whilst we remain mindful of the uncertain economic environment, we are well-placed to continue helping small businesses in 2021″, chief executive Samir Desai said in a statement.

Shares in Funding Circle jumped 10.5% to 164p in early deals.

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