12 July 2016
Orchard Funding Group PLC
("Orchard Funding Group" or the "Company" or the "Group")
Trading Update
Orchard Funding Group, the finance company which specialises in insurance premium finance and the professions funding market, announces that it expects revenues for the 12 months to 31 July 2016 to be broadly level with the prior financial year.
The Company remains well positioned in its two core markets, where it continues to lend in a prudent and conservative manner. The Company has invested in developing and expanding its senior sales team and in the development of its software and technology platform. The Company has not yet achieved material increases in its revenue base and as a consequence, the Company's trading performance for the current financial year is expected to be below market expectations.
The process for recruiting senior sales individuals has taken longer than originally envisaged and this has delayed the Company's ability to significantly increase its lending volumes. This has now been rectified, culminating in the appointment of a senior sales executive from the largest lender in the insurance premium finance market in June.
Further, the new FCA consumer credit regime has significantly delayed approval of new lender applications. As a result, the time-lines for insurance brokers to set up in-house finance companies, that can borrow from the Company, are and will continue to be extended.
The Board, nevertheless, remains confident in the Company's ability to achieve strong growth for the next financial year, as in its view there is no fundamental change in the business or the growth opportunities for the Company.
Ravi Takhar, Chief Executive Officer of Orchard, said: "Orchard continues to prudently lend into safe and secure lending markets and has been able to conservatively increase its lending over the past 12 months. We are disappointed not to have been able to make the step change up in revenues we were expecting in this financial year but we believe we are well placed to do so over the next 12 months. Our pipeline of new business opportunities is now significantly larger than we anticipated on flotation and a clear indicator of our ability to meet and potentially exceed our longer term objectives."
For further information, please contact:
Orchard Funding Group PLC +44 (0)1582 635 507
Ravi Takhar, Chief Executive Officer
Panmure Gordon (UK) Limited (Nomad and Broker) +44 (0)20 7886 2500
Dominic Morley / Alina Vaskina (Corporate Finance)
Charles Leigh-Pemberton (Corporate Broking)
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.