DJ Funding Circle plc: Full Year 2025 Results
Funding Circle Holdings plc (FCH)
Funding Circle plc: Full Year 2025 Results
05-March-2026 / 07:00 GMT/BST
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Funding Circle Holdings plc
Full Year 2025 Results
FY 2026 REVENUE GUIDANCE ACHIEVED A YEAR EARLY
UPGRADED FY 2026 GUIDANCE & ATTRACTIVE NEW MEDIUM-TERM TARGETS
Funding Circle Holdings plc ("Funding Circle" or the "Group") today announces results for the twelve months ended 31
December 2025.
Lisa Jacobs, Funding Circle CEO, commented:
"We delivered a standout performance in 2025, exceeding our expectations and hitting our 2026 revenue guidance a year
early, and we supported more SMEs than ever before. Strong growth in the credit we extended led to revenue growth of
28% to GBP204m and profit before tax increasing to GBP20m, demonstrating the strong operating leverage and profitability of
our platform.
"We've successfully executed against our strategy to deepen our engagement with SMEs and expand our multi-product
offering, enabling us to meet more of our customers' needs. We now interact with a customer once every 38 seconds,
putting us at the heart of their businesses as a trusted financial partner. Our 15 years of proprietary data and
technology expertise are the foundation of our competitive advantage, allowing us to deliver a superior customer
experience.
"Looking ahead, we see a significant opportunity to further grow our share of the SME finance market. Our confidence in
the strength and scalability of our platform is reflected in the attractive new medium-term targets we are setting
today. By becoming a more meaningful partner to our customers, we aim to not only grow our business but to support the
next phase of growth across the UK's SME economy."
Group FY 2025 FY 2024
GBPm GBPm
Credit extended1 2,453 1,899
Assets under Management2 2,961 2,833
Revenue3 204.3 160.1
Profit before taxation (before exceptional items) 20.3 3.4
Profit before taxation (after exceptional items) 20.3 0.8
Profit for the year (after exceptional items) 46.0 8.6
Unrestricted Cash4 100.9 150.5
Financial Highlights
-- Group Revenue: Increased 28% to GBP204.3m (2024: GBP160.1m), achieving 2026 revenue guidance a year early. -- Profitability: Significant 6x growth in Profit Before Tax (PBT) to GBP20.3m, up from GBP3.4m pre-exceptionals and GBP0.8m
post exceptionals in 2024 demonstrating the business' operating leverage. Profit for the year (after exceptional
items) of GBP46.0m (2024: GBP8.6m). -- Credit Extended: Increased 29% to GBP2,453m (2024: GBP1,899m). -- Assets under Management (AuM): Increased to GBP2,961m (2024: GBP2,833m). -- Active customers: Increased 10% to 52.7k (2024: 47.9k).
Business Unit Performance
Term Loans
-- Originations: Grew 16% to GBP1,638m (2024: GBP1,407m) driven by product innovation and borrower demand. -- AuM: Increased to GBP2,755m (2024: GBP2,714m) as new lending outpaced the repayment of legacy Covid-19
government-guaranteed loans. -- Profitability: PBT increased to GBP32.2m (2024: GBP19.0m before exceptional items), reflecting strong operating
leverage which led to margins improving to 19.2% (2024: 13.3%). -- Robust and attractive returns through the cycle: Annualised net returns to institutional investors continued to be
5% above cost of capital, resulting in continued investor demand with GBP2.2bn in committed forward flows.
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1. Credit extended includes Term Loan originations and FlexiPay and Cashback card transactions. 2. Assets under Management ("AuM") is the total value of term loan principal and interest due from borrowers and drawn
lines of credit and Cashback card spend balances (excluding defaulted balances) previously referred to as Loans
under Management and balances outstanding. 3. Net income is also referred to as "Revenue". 4. Unrestricted cash refers to total cash less cash that is restricted in use.
FlexiPay & Card
-- Transactions: Strong momentum with transactions growing 66% to GBP815m (2024: GBP492m), reflecting good customer
engagement and roll-out of new features. >80% revenue from prior cohorts. -- AuM: Increased 73% to GBP206m (2024: GBP119m) as a result of new and repeat usage from customers. -- Performance: Continued progress toward profitability with a reduced loss before tax of GBP11.9m (2024: GBP15.6m loss
before exceptional items). Expected credit losses remain in line with our expectations.
Capital Allocation & Cash
Unrestricted cash remained healthy at GBP100.9m (2024: GBP150.5m) following proactive deployment aligned to our capital allocation framework:
-- Deliver: Group cash generative; Term Loan profits successfully funded continued FlexiPay investment. -- Invest: R&D for development of new shorter-term loan product within our Term Loans business, which has resulted in
an institutional investor onboarded in January 2026 to fund future originations. The existing shorter-term loan
portfolio was sold in line with its carrying value. -- Distribute: A third share buyback of up to GBP25m was announced in 2025. Combined with earlier programmes, GBP64m has
been returned to shareholders across 2024 and 2025, with GBP11m remaining. In 2025 specifically, GBP30m was deployed
for buybacks and GBP9m for the employee benefit trust.
Operational & Strategic Progress
-- Powerful data driving risk discrimination: Our AI-powered credit models are 3x better at discriminating risk than
traditional bureau scores. 15 years of proprietary data including 10 billion data points feeds our model
development, deepens the competitive moat around the business, and enables us to say "yes" to more businesses. -- Differentiated technology: Our instant decision technology enhances the customer experience and our platform allows
for fast product development and new feature launches. -- High customer satisfaction & strong brand awareness: With an NPS (Term Loans) of 79 and Trustpilot score of 4.6,
our brand reputation drives consideration amongst our target market of 80%. -- Strong track record and funding pipeline: Our capital-light platform is built for scale. We have delivered
consistent and robust loan returns to our institutional funders, with whom we have long-standing arrangements and
GBP2.2bn of future forward flow capacity in place. -- Multi-product capabilities: We have diversified and expanded our product suite beyond our longer-term loan
offering, with c.50% of our credit extended in H2 2025 coming from other products. Nearly 70% of our FlexiPay
revenue comes from our existing Term Loan customers, as we deepen engagement and capture a larger share of our
customers' financing needs. We are also attracting new audiences to the Funding Circle ecosystem. 50% of our Card
customers are new to Funding Circle and our new shorter-term lending product has unlocked previously untapped
segments of the SME market. -- Engaged and talented team: Our mission-led culture is a differentiator. We achieved a record engagement of 74% in
2025 and our teams received 11 industry awards, including the NACFB Unsecured Lender of the Year for the seventh
consecutive year. -- Meaningful impact: In 2025, lending through Funding Circle supported over 117,000 jobs and contributed GBP7.9bn to UK
GDP. Every GBP1 million of lending through our platform contributed GBP2.7 million to GDP, 39 jobs and GBP700,000 in tax
revenue.
Looking ahead Our strategic priorities are focused on customer-led profitable growth:
-- Get to yes: Get the right product to the right business, through credit excellence and product improvements. -- Expand our audience: Target new segments; deepen and expand our distribution channels. -- Scale our products: Capitalise on the large market opportunity by focusing on refining and scaling our products to
drive growth and margin expansion. -- Build a seamless lifetime customer experience: Deliver an exceptional experience throughout our customers' lifetime
journey with our expanded product set, as their trusted financial partner.
These will deliver customer-led top-line growth and increased profit within our current product set over the coming years, while enabling the next phase of longer-term growth with continued investment in our product and technology capabilities. We are building powerful insights into our customers that provide a strong platform for growth beyond our existing product set as we become our customers' trusted financial partner.
Guidance
We have upgraded our FY26 guidance having achieved our previous revenue target a year early. We are also establishing new medium-term targets through to FY29:
Period Growth Profit FY26 Guidance Upgraded to revenue of c.GBP235m PBT of at least GBP35m Medium term (FY29) Revenue of c.GBP300m-GBP350m PBT margins of low to mid-20s (%)
Analyst presentation Management will host a presentation and conference call for institutional investors and analysts at 9:30am UK time (GMT), on Thursday 5 March 2026.
To watch and listen to the webcast, with the opportunity to submit written questions, please use this link to register and gain access to the event.
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DJ Funding Circle plc: Full Year 2025 Results -2-
For conference call access, please dial +44 33 0551 0200 or +1 786 697 3501 Quote 'Funding Circle FY25' when prompted by the operator.
An on-demand replay and transcript will also be available on the Funding Circle website following the presentation.
For further details:
Funding Circle Holdings plc ir@fundingcircle.com press@fundingcircle.com
Lisa Jacobs, Chief Executive Officer
Tony Nicol, Chief Financial Officer
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.
About us:
Funding Circle (LSE: FCH) is the UK's leading SME finance platform. Since 2010, we have extended more than GBP17bn in credit to over 125,000 UK businesses, helping them power the economy and their communities.
By combining proprietary AI-powered credit models with a human touch, we provide a seamless experience that allows SMEs to borrow, pay later, and spend through a single ecosystem. For institutional investors, Funding Circle offers access to an attractive, underserved asset class through a platform built on deep data and a proven track record of robust returns.
Business Review
It has been a standout year for Funding Circle. We supported more small businesses than ever before, grew revenue 28% to GBP204 million, achieving our medium-term revenue target a year ahead of schedule, grew profit before tax ("PBT") to over GBP20 million and achieved record Circler engagement.
In 2024, we launched our plan to become a simpler, leaner, and UK-focused multi-product business, and, after two years of strong execution, we are realising the benefits. Our performance was driven by new product innovation and strong demand, underpinned by the power of our proprietary data and technology and capital-light business model.
Our position as the UK's leading SME finance platform is stronger than ever. We are serving a large and underserved market, enabling businesses to borrow, pay later, and spend, delivering a superior customer experience and attractive returns to our platform investors. And, we're still just getting started.
Business finance that backs small businesses
For 15 years, we have backed the small businesses that keep the UK economy moving. We have extended c.GBP17 billion of credit to over 125,000 UK businesses.
We're passionate about what we do - the businesses we support are the restaurants, popcorn makers, furniture manufacturers and flooring suppliers. They sit at the heart of local communities, driving growth and creating jobs and it's an honour to play a small but important part in their stories.
In 2025, lending through Funding Circle supported 117,000 jobs, GBP7.9 billion in GDP contribution and GBP2.2 billion in tax receipts. We once again lent to businesses in every one of the country's 650 constituencies, powering tens of thousands of SMEs.
As we have diversified our product set, it has been pleasing to see the impact, we now offer over ten different products, we have a customer transaction every 38 seconds (vs every half an hour in 2021), and in H2 last year, 50% of our credit extended came from outside our core term loan products.
We remain capital-light with a robust balance sheet. We are continuing to return value to shareholders through share buybacks, having purchased 17% of our initial share capital since March 2024, while maintaining a strong cash position to support growth.
Strategic progress: borrow, pay later, spend
Over the last few years, we have executed against our multi-product strategy, driving an expanded customer set, an increased share of wallet and deeper customer engagement. Today, we are a more important part of our customers' lives.
We are executing against our four strategic pillars to drive profitable growth:
1. Get to 'Yes': Expanding our product offering, improving our customer service and our credit segmentation to get to 'Yes' for more businesses. This year we reorganised our sales teams to better serve customers' financial holistic needs, launched a shorter-term loan product, and further expanded our Marketplace partnerships to support those we cannot fund directly.
2. Expand our audience: Through new distribution channels and product sets, we are broadening the range of customers we can serve and attract. Our Cashback card is bringing new customers into the Funding Circle ecosystem. We continue to invest in our existing direct and intermediated distribution channels and our new partnership with TNT Sports, building on our existing partnership with Gallagher PREM Rugby, will also put Funding Circle in front of new SME audiences.
3. Scale our product offering: We are driving our newer products, FlexiPay and Cashback card, towards scale and profitability. We have made good progress building out product features to offer more flexibility for customers.
4. Build a seamless lifetime customer experience: We are serving our customers across a broader set of needs and by solving more problems for our customers, we are laying the foundations for long-term relationships as their trusted financial partner.
Our technology and data advantage
When we speak to our customers, they want fast and easy access to credit with a human touch. In a small business, the owners are the operators, the marketers and the financiers. We provide a six minute application form, instant decisions for 73% of applicants, and funding in as little as 24 hours. This drives strong satisfaction with an NPS (Term Loans) of 79 and lets customers focus on what they do best, running their businesses.
We can do this thanks to our data and technology, which delivers a competitive advantage. Our AI-powered risk models are trained with our proprietary data on hundreds of thousands of loans and transactions alongside public data sources, discriminating risk three times better than bureau scores alone.
We continue to invest in our technology and data stack. Gen AI forms part of this as we evolve into an AI-native organisation. We are leveraging AI to improve customer experience and productivity - from better understanding customer sentiment and serving customers faster, to speeding up product development. We are deploying Gen AI thoughtfully and safely with a 'human in the loop' approach.
People and culture
Our results and strategic progress are all testament to the hard work of our Circlers. It is their passion, commitment and dedication that means we continue to help more SMEs thrive. We achieved a record employee engagement score of 74% in 2025.
This year, we launched our new 'People Pact' reflecting our collective commitment to be all in and 'On a Mission' every day to back small businesses, to grow fast, to belong together, to build better, and to be different. At Funding Circle we are on a mission that really matters and ultimately reaps rewards for our Circlers, our customers, our investors and shareholders, and our business.
Looking ahead
We are excited by the potential that we have to continue to become our customers' trusted financial partner. We enter 2026 with a clear platform for growth as we become a more meaningful part of our customers' lives, serving more of their needs and capturing a larger share of their financing, to fuel even more SME success stories across the UK.
Financial review
Outperforming expectations and delivering growing PBT
Overview of the year ended 31 December 2025
We are pleased to report that the Group delivered strong revenue and sustainable profit growth in 2025, demonstrating continued scalability following the move to profitability in 2024. This performance was driven by growth across Term Loans (a longer-term financial product offering) and FlexiPay (a shorter-term line of credit product) which also incorporates the Cashback card (launched in H2 2024), demonstrating the strength of our expanded product suite in meeting the diverse financing needs of SMEs. FlexiPay and the Cashback card are presented as one segment.
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DJ Funding Circle plc: Full Year 2025 Results -3-
While these two business segments are at different stages of maturity, product innovation has remained a driver for both. In our more established Term Loans business, we have successfully expanded our product range to include our shorter-term loan offering. Simultaneously, in our high growth FlexiPay segment, we have continued to iterate on features to deepen customer engagement.
Credit extended Assets under
(Originations and Transactions) Management
31 December 31 December
FY 2025 FY 2024
2025 2024
GBPm GBPm
GBPm GBPm
Continuing operations
Term Loans 1,638 1,407 2,755 2,714
FlexiPay 815 492 206 119
Total 2,453 1,899 2,961 2,833
Overall, credit extended grew by 29% to GBP2.5 billion, with significant growth for Term Loans and FlexiPay. Assets under management grew to GBP3.0 billion with credit performance in line with management expectations.
Strong credit extended translated into revenue growth of 28% to GBP204.3 million (2024: GBP160.1 million), achieving our 2026 revenue guidance a year earlier than expected. The Group made a profit before tax of GBP20.3 million (2024: profit before tax of GBP3.4 million before exceptional items, profit before tax of GBP0.8 million after exceptional items).
Segmental highlights1 31 December 2025 31 December 20242
Continuing operations Continuing operations
Term Term
FlexiPay Total FlexiPay Total
Loans Loans
GBPm GBPm GBPm GBPm
GBPm GBPm
Transaction fees 105.8 1.2 107.0 84.7 0.6 85.3
Servicing fees 35.9 - 35.9 37.5 - 37.5
Interest income 5.6 44.6 50.2 8.3 22.6 30.9
Other fees 5.0 0.1 5.1 5.1 0.1 5.2
Operating income 152.3 45.9 198.2 135.6 23.3 158.9
Investment income 24.3 - 24.3 2.8 - 2.8
Total income 176.6 45.9 222.5 138.4 23.3 161.7
Fair value (losses)/gains (6.7) - (6.7) 4.2 - 4.2
Cost of funds (2.5) (9.0) (11.5) - (5.8) (5.8)
Net income ("revenue") 167.4 36.9 204.3 142.6 17.5 160.1
Profit/(loss) before tax (before exceptional 32.2 (11.9) 20.3 19.0 (15.6) 3.4
items)
Exceptional items - - - (2.3) (0.3) (2.6)
Profit/(loss) before tax 32.2 (11.9) 20.3 16.7 (15.9) 0.8
1. The Group primarily uses profit before tax in its resource allocation and decision making and has therefore
discontinued disclosing Adjusted EBITDA as an additional non-GAAP measure.
2. The segmental results of the discontinued US business for 2024 are not presented above.
Term Loans
Term Loans originations increased by 16% to GBP1,638 million (2024: GBP1,407 million). Growth was driven by product innovation and increased borrower demand, with a particularly strong Q4 2025.
We continue to look at ways to provide access to finance for SMEs. Alongside our principal longer-term financial product, we met business needs through a range of other products:
-- We expanded our loan proposition with a shorter-term loan (6 to 24-month terms). To support the launch, whilst we
tested and iterated this product, we funded it through our balance sheet in line with our capital allocation
policy. It was funded through the same leveraged warehouse as FlexiPay. The product expansion has been a success
and we onboarded an institutional investor, Waterfall Asset Management, in January 2026 to fund the product going
forward. We also sold the shorter-term loan portfolio to that investor in line with the value it was carried at. -- We continued to participate in the government's Growth Guarantee Scheme ("GGS") which enabled us to provide finance
to SMEs at a lower cost than we would otherwise be able to. -- We have also continued to grow originations through our Marketplace network of third-party finance providers. This
allows us to support even more SMEs with access to a wider range of financing options.
Under our off-balance-sheet funding model, Term Loans are funded through agreements with institutional investors. During 2025, we signed five forward flow arrangements with investors and we have c.GBP2.2bn future funding in place including the institutional funders we onboarded for shorter-term loans earlier this year (31 December 2024: c.GBP2.1 billion).
Assets under Management ("AuM") started to grow again and reached GBP2.8 billion, as new lending outpaced the amortisation of the legacy Covid-19 government-guaranteed loans. As at 31 December 2025, the legacy Covid-19 loans represented c.8% of total AuM (31 December 2024: 27%).
The Term Loans business delivered revenue of GBP167.4 million, growing 17% (2024: GBP142.6 million). This growth came principally from originations and successful scaling of our shorter-term loan offering. The income from shorter-term loans is presented within investment income as we earned interest whilst the loans were on-balance-sheet. Going forward this will move to a fee-based model where we earn an upfront transaction fee and a servicing fee in line with our other Term Loans products.
Profit before tax was GBP32.2 million, up from GBP19.0 million in 2024 (GBP16.7 million in 2024 after exceptional items). PBT margin increased to 19.2% (2024: 13.3%; 2024: 11.7% after exceptional items), showing the strong efficiency and scalability of our established platform business.
FlexiPay and Cashback card
Our line of credit product, FlexiPay, has demonstrated significant growth to date and we continue to invest in it. FlexiPay includes a line of credit product and a Cashback card.
Transactions grew by 66% to GBP815 million (2024: GBP492 million), driven by customer growth and new features, increasing customer engagement. We also continue to scale Cashback card, launched in H2 2024. Active accounts increased by 56% to nearly 20,000 in 2025, driving transaction growth. AuM grew to GBP206 million at 31 December 2025 (2024: GBP119 million), following transaction and active account growth.
Revenue for FlexiPay was GBP36.9 million in 2025, increasing from GBP17.5 million in 2024, primarily due to interest income growth. This was driven by a rise in transactions and fee growth. The average fee for each drawdown grew to 7.3% (2024: 5.8%), reflecting a longer average repayment period after offering wider repayment terms during 2024 of 1, 3, 6, 9 or 12 months.
The FlexiPay segment has two primary products - FlexiPay, a line of credit and a Cashback card. The line of credit offers the instant ability to settle invoices or withdraw cash via bank transfer or the FlexiPay card. A one-off drawdown fee is charged, with repayment spread over 1-12 months. There is no additional interest. On our Cashback card, when a customer transacts, an interchange fee of 1.75% is earned alongside interest on any revolving balances. The product offers customers 2% cashback in the first six months, followed by 1% thereafter.
FlexiPay is funded through Funding Circle's invested capital and a senior debt facility with Citi. The lines of credit are part of Funding Circle's balance sheet. The interest payable on this facility is shown in "cost of funds" and is based on SONIA plus a margin. This facility is currently GBP240 million with the ability to upsize further and is due for renewal in April 2026. This facility now only funds FlexiPay, however during 2025 the facility also funded our shorter-term loans and was GBP291 million at 31 December 2025, prior to an institutional investor being onboarded for future shorter-term loan funding.
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DJ Funding Circle plc: Full Year 2025 Results -4-
Loss before tax was GBP11.9 million (2024: loss before tax of GBP15.9 million after exceptional items, loss before tax of GBP15.6 million after exceptional items), with continued investment to support product momentum. Marketing costs and expected credit losses are recognised upfront, creating an initial "j-curve" effect. However, given the recurring nature of these products, we expect to generate repeat revenues that drive long-term profitability. Over 80% of the 2025 revenues came from customers onboarded pre-2025 and earlier cohorts are now cash generative.
31 December 31 December
31 December 2024
2025 31 December 2024 2024
Exceptional
Before exceptional Total
Profit and loss items
items
GBPm
GBPm
GBPm GBPm
Transaction fees 107.0 85.3 - 85.3
Servicing fees 35.9 37.5 - 37.5
Interest income 50.2 30.9 - 30.9
Other fees 5.1 5.2 - 5.2
Operating income 198.2 158.9 - 158.9
Investment income 24.3 2.8 - 2.8
Total income 222.5 161.7 - 161.7
Fair value (losses)/gains (6.7) 4.2 - 4.2
Cost of funds (11.5) (5.8) - (5.8)
Net income ("revenue") 204.3 160.1 - 160.1
Expected credit loss charge (18.3)
(8.6) - (8.6)
(68.4)
People costs (68.1) (2.3) (70.4)
Marketing costs (62.0) (45.6) - (45.6)
Depreciation, amortisation and impairment (11.1) (13.2) (0.3) (13.5)
Other costs (24.2) (21.2) - (21.2)
Operating expenses (165.7) (148.1) (2.6) (150.7)
Profit/(loss) before tax from continuing 20.3 3.4 (2.6) 0.8
operations
Operating income includes transaction fees, servicing fees, interest income from loans held at amortised cost, interest on cash balances and other fees and was GBP198.2 million (2024: GBP158.9 million).
-- Transaction fees, representing fees earned on originations, increased to GBP107.0 million (2024: GBP85.3 million),
driven by originations growth as the business continued to expand its Term Loans offering to more segments of the
market. Average yields in the Term Loans business improved to 6.5% (2024: 6.0%) driven by product mix. -- Servicing fees, representing income for servicing AuM, were GBP35.9 million (2024: GBP37.5 million). The fees move in
line with AuM and although year-end AuM grew slightly compared to 2024, total servicing fees were lower as a result
of a lower average AuM during the year. We expect AuM to continue to grow in 2026 now that new lending has outpaced
legacy amortisation. Servicing yields remain similar to 2024 levels.
-- Interest income includes:
i. FlexiPay interest income which is a fee charged on transactions and spread over a number of months, in line
with borrower repayments. It has increased to GBP42.9 million (2024: GBP21.3 million), driven by transaction levels
and the average fees on transactions which were 7.3% in the year (2024: 5.8%) due to longer average payment
terms.
ii. Interest earned on cash and cash equivalents decreased to GBP6.8 million (2024: GBP9.2 million). This interest
applies to the Group's unrestricted cash as well as restricted cash drawn from the Citi facility in
anticipation of future drawdowns. The interest earned on cash has decreased in line with the unrestricted cash
balance decrease, driven primarily by share buybacks and investment in our shorter-term loan offering where we
temporarily held loans on balance sheet while we tested and iterated the product. We have since sold these
loans to an institutional investor.
-- Other fees arose principally from collection fees we recovered on defaulted loans.
Investment income represents the income on loans held on balance sheet at fair value. It increased to GBP24.3 million (2024: GBP2.8 million), driven by the shorter-term loan product which we held on balance sheet and received interest income on during the investment phase before selling the loans post-year-end.
Net income ("revenue"), defined as total income after fair value adjustments and cost of funds, was GBP204.3 million (2024: GBP160.1 million). The fair value loss in the year of GBP6.7 million (2024: GBP4.2 million gain) related primarily to fair value movements on the shorter-term loan products held on balance sheet. Since year-end, we have sold these loans to an institutional investor, in line with the value at which they were held.
The fair value gain in 2024 related to certain investments 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.
Expected credit losses principally relate to the IFRS 9 charge for FlexiPay where we account for actual and future expected credit losses from SMEs defaulting on their lines of credit. This has increased to GBP18.3 million (2024: GBP8.6 million), mainly driven by growth in FlexiPay AuM.
Operating expenses: At an overall level, operating expenses increased compared with 2024.
However, costs remain actively and tightly managed with a 12% increase in expenses before exceptional items compared to a 28% growth in revenue.
The primary drivers of cost growth were the variable expenses associated with marketing and variable salary costs driven by the financial outperformance during the year. Marketing costs increased to GBP62.0 million.
The remaining costs increased by 1%.
People costs (including contractors) represent the Group's largest ongoing operating cost and include salary-related costs plus share-based payments.
Total people costs of GBP68.4 million were broadly flat (2024: GBP68.1 million before exceptional items) with inflation and new hires offset by the reduction in share-based payments. The average salary per head increased by 11% driven by the variable costs including sales team commissions and Group bonus levels. Year-end headcount increase was driven by volume-related roles and investment in product development.
The share-based payment charge for the year, included in people costs, was GBP5.9 million (2024: GBP7.8 million), the reduction was largely driven by a large share price increase in 2024 which increased the national insurance costs associated with the awards in that year.
31 December 31 December
Change
Continuing operations 2025 2024
%
GBPm GBPm
Salary costs 71.3 69.3 3
Less capitalised development spend ("CDS") (8.8) (9.0) (2)
Salary costs net of CDS 62.5 60.3 4
Share-based payments 5.9 7.8 (24)
Total people costs 68.4 68.1 -
Average headcount (incl. contractors) 739 788 (6)
Year-end headcount (incl. contractors) 778 726 7
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DJ Funding Circle plc: Full Year 2025 Results -5-
Marketing costs comprise performance marketing (direct mail and online), brand spend and broker commission payments. Marketing costs increased in the year to GBP62.0 million (2024: GBP45.6 million). This was in line with growth in credit extended, together with an increase in the mix of broker commissions which has a higher cost per acquisition compared to performance marketing. Additionally, we continued sponsorship of PREM Rugby and launched a business partnership with TNT Sports.
Depreciation, amortisation and impairment costs of GBP11.1 million (2024: GBP13.2 million before exceptional items) largely represent the amortisation of the cost of our capitalised technology development and the depreciation of right-of-use assets related to our office lease. The reduction is driven by some legacy technology assets reaching the end of their amortised life during 2025.
Other operating costs consist of loan processing costs, data and technology, professional fees and employee and office-related costs. Revenue growth drove an increase in the variable element of these costs, alongside inflation.
Balance sheet and investments
The Group's net equity was GBP228.4 million at 31 December 2025 (31 December 2024: GBP216.5 million). This increase reflects the profit generated and recognition of deferred tax assets, partially offset by share buybacks. A deferred tax asset of GBP23.6 million on brought forward losses has been recognised at 31 December 2025 as the Group becomes increasingly profitable, and it is probable that there will be future taxable profits to offset previous losses. A further GBP2.5 million has been recognised in relation to RDEC tax credits to offset tax payable. The recognition of a deferred tax asset results in a tax credit increasing the profit for the year and resulting in a higher earnings per share ("EPS") figure compared to the position if the deferred tax asset had not been recognised. Note 9 provides further detail of the impact of deferred tax on EPS.
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.
Operating business Investment business
31 December 31 December
CBILS/
Term Loans
FlexiPay 2025 2024
RLS/GGS
business Shorter-term loans co-investments
GBPm Total Total
GBPm GBPm GBPm
GBPm GBPm
SME loans and lines
2.1 172.9 120.4 12.3 307.7 118.8
of credit
Cash and cash
equivalents
Unrestricted 100.8 0.1 - - 100.9 150.5
Restricted - 41.9 5.9 3.7 51.5 37.1
Other assets/ - 10.1 (1.8) - 8.3 6.3
(liabilities)
Borrowings - (168.8) (98.5) - (267.3) (101.9)
Cash and net
102.9 56.2 26.0 16.0 201.1 210.8
investments
Other assets 65.7 - - - 65.7 45.3
Other liabilities (34.7) - - (3.7) (38.4) (39.6)
Equity 133.9 56.2 26.0 12.3 228.4 216.5
The table below provides a summation of Funding Circle's net invested capital in products and vehicles:
31 December 31 December
Investment in product/vehicles 2025 2024
GBPm GBPm
1. CBILS/RLS/GGS co-investments1 12 18
2. Shorter-term loans1 26 -
3. Other - 2
Net invested 38 20
FlexiPay1 56 34
Total net invested capital 94 54
1. The vehicles through which the funding and lending are generated are set up to be bankruptcy remote
CBILS/RLS/GGS co-investments - as part of our historical participation in the CBILS and RLS government-guaranteed loan schemes and our ongoing involvement in GGS, we were required to co-invest c.1% alongside institutional investors.
Shorter-term loans - this relates to our shorter-term loan offering which we launched during 2025 as part of our Term Loans business with terms from 6 to 24 months. Whilst the product was tested and iterated, we funded it using our balance sheet, through the same leveraged warehouse as FlexiPay, in line with our capital allocation framework. The loans were treated as held for sale and therefore accounted for at fair value.
Cash flow
At 31 December 2025, the Group's total cash position was GBP152.4 million (31 December 2024: GBP187.6 million).
Of the total cash balance, GBP100.9 million (31 December 2024: GBP150.5 million) is unrestricted in its use with GBP51.5 million (31 December 2024: GBP37.1 million) being restricted. Restricted cash relates to cash held in the senior debt facility with Citi together with amounts owed to the British Business Bank ("BBB") for guarantee fees collected from institutional investors under the participation of the CBILS, RLS and GGS schemes.
Total movements in unrestricted cash during 2025 have principally been driven by:
i. trading performance;
ii. ongoing investment in FlexiPay lines of credit and shorter-term loan product with external bank debt;
iii. monetisation of on-balance-sheet SME loans as they have continued to pay down; and
iv. purchase of shares as part of the share buyback programme.
Unrestricted free cash flow, which is an alternative performance measure, has significantly improved year-on-year and is positive, driven by the profitability of the business.
Unrestricted free cash flow represents the net cash flows from operating activities less the cost of purchasing intangible assets, property, plant and equipment and lease payments. It excludes the investment vehicle financing and funding cash flows together with FlexiPay lines of credit, Cashback card and shorter-term loan product. This excludes restricted cash and cash flows. 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:
2025 2024
GBPm GBPm
Profit before tax from continuing operations 20.3 0.8
Depreciation, amortisation, impairment and modification gains 11.1 13.2
Purchase of tangible and intangible assets and payment of lease liabilities (11.4) (13.6)
Exceptional items - 0.3
Share-based payments and social security costs 5.0 7.2
Fair value adjustments 6.7 (4.2)
Working capital/other (0.9) (0.1)
Unrestricted free cash flow 30.8 3.6
Net movement in trusts, co-investments and SME loans at amortised cost 7.6 12.3
Net movement in lines of credit (net of borrowings) (22.2) (15.7)
Net movement in loans at fair value through profit and loss (net of bonds) (27.6) 3.6
Share buyback/purchase of own shares (39.2) (33.7)
Net proceeds from sale of US business - 30.6
Other (distribution from associates and proceeds from exercise of share options) 1.0 1.4
Movement in the year (49.6) 2.1
Cash and cash equivalents at the beginning of the year 150.5 148.4
Cash and cash equivalents at the end of the year 100.9 150.5
Share buybacks and share purchases
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In May 2025, we announced our third share buyback programme, for up to GBP25 million, which is currently ongoing. This follows two earlier share buyback programmes announced in 2024 which returned GBP50 million to shareholders. Of this total of GBP75 million, c.GBP64 million has been purchased through 2024 and 2025 leaving up to c.GBP11 million remaining.
In the year to 31 December 2025, 23.0 million shares were bought back and cancelled (2024: 33.5 million shares) for consideration of GBP27.6 million (2024: GBP33.7 million) inclusive of fees and expenses under the programme representing c.7% (2024: c.9%) of the called-up share capital at the start of the year.
Additionally, the Group bought back 2.3 million shares that were not cancelled and were held in treasury for cancellation or to be used to satisfy share awards. The consideration was GBP3.0 million inclusive of fees and expenses, representing 0.7% of the called-up share capital at the start of the year.
A further 7.7 million of ordinary shares were purchased by the EBT for consideration of GBP8.6 million (2024: GBPnil) for the purposes of satisfying employee share option plans.
Subsequent events - sale of shorter-term loan assets
The shorter-term loans held by the Group were held at a fair value of GBP120.4 million at 31 December 2025 (2024: GBPnil). Since the year-end, an agreement was signed to sell the loans to a third party, alongside the signing of a forward flow agreement for the go forward origination of the product.
The loans were sold with an economic cut-off date of 31 December 2025, for an amount materially aligned with their fair value at the balance sheet date resulting in net invested capital of GBP26 million being monetised and a post-sale unrestricted cash of GBP126.9 million.
Of the GBP126.9 million, there remains up to c.GBP11 million usage for the ongoing buyback programme and management holds an operational cash buffer of c.GBP40 million. We are not regulated like a bank with regulatory capital, but we hold a stress buffer for operational purposes. This leaves c.GBP76 million of future deployable cash.
The below table illustrates the post-balance-sheet impact of the sale as if applied to 31 December 2025 with the loans sold, related borrowings repaid and the net unrestricted cash available for use in the operating business.
31 December
Proforma
balance sheet
post sale impact1
2025
GBPm
GBPm
SME loans and lines of credit 187.3 307.7
Cash and cash equivalents
Unrestricted 126.9 100.9
Restricted 45.6 51.5
Other assets/(liabilities) 10.1 8.3
Borrowings (168.8) (267.3)
Cash and net investments 201.1 201.1
Other assets 65.7 65.7
Other liabilities (38.4) (38.4)
Equity 228.4 228.4
1. Proforma balance sheet as at 31 December 2025 post the impact of sale of shorter-term loans post year-end.
Principal risks and uncertainties
The principal risks and uncertainties for the Group are as follows:
Strategic risk
Strategic risk is defined as the failure to plan or build a sustainable, diversified and profitable business.
i) Strategy execution
Risk that we are unable to effectively deliver the strategy selected due to inadequate investment, prioritisation,
organisational design or execution or fails to monitor the achievements of strategic objectives. This would result in
the business not meeting key objectives, impacting our competitive advantage.
ii) Environmental, social and governance risk
Environment, social and/or governance events or circumstances could cause an actual or potential material negative
impact on our financial performance or reputation.
Funding and finance risk
Funding and finance risk relates to the potential for adverse impacts on the Group's ability to source and maintain
sufficient capital to support the origination of SME financial products, and also the potential for adverse impacts on
the Group's financial position, performance, or reputation arising from various sources, including inadequate
liquidity, operational failures affecting financial data, errors in accounting and reporting, deviations from strategic
financial goals, and issues related to the balance sheet structure and asset management.
i. Funding risk
Risk that demand from borrowers for credit cannot be met by institutional investors providing the funding. This risk
varies with the economic attractiveness of Funding Circle products as an investment, the level of diversification of
funding sources and the level of resilience of these funding sources and their returns through economic cycles.
ii. Corporate liquidity
The risk that balance sheet funded investments lose value or cannot be exited at viable prices, and that liabilities
cannot be met timely or cost effectively.
Regulatory, reputation and conduct risk
Regulatory, reputation and conduct risk relates to activities that detract from our goal of being a trusted and
reputable company with products, services and processes designed for customer success and delivered in a way that will
not cause customer detriment or regulatory censure. Legal Risk is also included within this principal risk, which
includes, but is not limited to, exposure to fines, penalties, or punitive damages resulting from supervisory actions,
as well as private settlements.
i) Conduct risk
Failure to satisfactorily deliver fair customer outcomes leading to regulatory censure, and reputation damage.
ii) Regulatory risk
The risk of changing regulations which impact our operations, or our business practices do not align to regulatory
expectation leading to customer detriment, reputation damage and regulatory censure.
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems or
from external events. This definition includes operational failures resulting from the use of AI systems, such as
flawed model outputs leading to poor business decisions, process automation failures, inadequate 'human-in-the-loop'
oversight, or fraud losses resulting from AI enabled attacks.
i. Process risk
Failure to originate and service loans in line with our internal policies, investor guidelines and third party loan
guarantees (e.g. BBB) may result in us repurchasing loans from investors. The risk of an operational incident could
impact the ability to originate new loans or the ability to service loans through collections from borrowers and return
of money to investors.
ii) Financial crime
Risk of regulatory breach, financial loss or reputational damage arising from a failure to adequately manage or prevent
money laundering, terrorist financing, bribery and corruption, or to comply with sanctions regulations.
a) Fraud Risk
Fraud risk is the threat of external unauthorised activities, including fraud committed by borrowers, investors, or
related parties. Fraud risk also includes the risk of internal fraud by employees against the organisation, its
customers, or third/ fourth parties for personal gain.
iii) Change Risk
The risk arising from the inability to manage business changes in a timely and controlled manner. This includes large
and complex change programmes as well as small and incremental enhancements, including product changes.
iv) People Risk
Failure to plan appropriately may lead to loss of subject matter expertise and may have a detrimental impact to
business resilience. Employees do not have the right level of training and skills to match job requirements leading to
poor deliverable outcomes. Includes key person reliance.
Credit risk
Credit risk is the risk of financial loss should any borrower fail to fulfil their contractual repayment obligations.
Credit risk management is the sum of activities necessary to deliver a risk profile at the portfolio level in line with
Funding Circle management's expectations, in terms of net loss rate, risk-adjusted rate of return and volatility
through economic cycles. This includes management of potential risks from AI and machine learning ("ML") models
integrated in the credit risk assessment.
i. Credit risk
a. Borrower acquisition
Credit performance and returns of new loans can deviate from expectations due to several factors: changes in credit
quality of incoming applications, calibration of risk models or strategy parameters, and control gaps in processing
loan applications..
b. Portfolio management
Credit performance and returns of existing portfolio can deviate from expectations due to several factors:
deterioration of credit environment, increased competition driving higher prepayment rates, effectiveness of portfolio
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monitoring, collections and recoveries. Such risks, unmitigated, could impair Funding Circle's capabilities to source funding for new loans at reasonable terms, and be adverse to the financial performance of the Company. Technology risk Technology risk refers to the potential negative consequences that can arise from the use or implementation of technology, including hardware, software, and data management systems. Technology risks can arise from a variety of sources, including hardware failures, software bugs, cyber attacks, data breaches, user errors, and security vulnerabilities specific to AI systems. i. Technology resilience Failure of the technology platform could have a material adverse impact on our business, results of operations, financial condition or prospects. ii) Cybersecurity The risk of unauthorised access to IT systems and data, including as a result of a cyber attack, which threatens the confidentiality, integrity, and availability of data and/or systems. Emerging Risks i) New technology risk Including AI and cybersecurity ii) Economic and geopolitical risks Including financial instability, disruptions in trade and supply chains and political and social fragmentation. iii) Exogenous risks Including climate related risks/ global shocks (pandemics, wars, etc.)
Consolidated statement of comprehensive income
for the year ended 31 December 2025
31 December 31 December 31 December
31 December
2024
2025 2024 2024
Exceptional
Before
Note Items1
exceptional
items
GBPm
GBPm GBPm GBPm
Transaction fees 107.0 85.3 - 85.3
Servicing fees 35.9 37.5 - 37.5
Interest income2 50.2 30.9 - 30.9
Other fees 5.1 5.2 - 5.2
Operating income 198.2 158.9 - 158.9
Investment income 24.3 2.8 - 2.8
Total income 222.5 161.7 - 161.7
Fair value (losses)/gains (6.7) 4.2 - 4.2
Cost of funds (11.5) (5.8) - (5.8)
Net income3 5 204.3 160.1 - 160.1
Expected credit loss charge 3, 14, 15, (18.3) (8.6) - (8.6)
17
People costs 4, 6, 7 (68.4) (68.1) (2.3) (70.4)
Marketing costs 6 (62.0) (45.6) - (45.6)
Depreciation, amortisation and impairment 4, 5, 6, 10 (11.1) (13.2) (0.3) (13.5)
Other costs 6 (24.2) (21.2) - (21.2)
Operating expenses 6 (165.7) (148.1) (2.6) (150.7)
Profit/(loss) before taxation 5 20.3 3.4 (2.6) 0.8
Income tax credit/(charge) 8 25.7 (0.5) - (0.5)
Profit/(loss) for the year from continuing operations 46.0 2.9 (2.6) 0.3
(Loss)/profit for the year from discontinued operations - (10.2) 18.5 8.3
Profit/(loss) for the year 46.0 (7.3) 15.9 8.6
Other comprehensive expense
Items that may be reclassified subsequently to profit
and loss:
Exchange differences on translation of foreign
operations - discontinued operations - (8.9)
(0.2) (8.7)
Total comprehensive income/(expense) for the year 46.0 (7.5) 7.2 (0.3)
Total comprehensive income/(expense) attributable to:
Owners of the Parent
Income/(expense) from continuing operations 46.0 2.9 (2.6) 0.3
(Expense)/income from discontinued operations - (10.4) 9.8 (0.6)
Total comprehensive income/(expense) attributable to
the owners of the Parent 46.0 (0.3)
(7.5) 7.2
Earnings per share
Basic earnings per share from continuing operations 9 14.6p 0.8p 0.1p
Diluted earnings per share from continuing operations 9 14.0p 0.8p 0.1p
Basic (loss)/earnings per share from discontinued 9 - (3.0)p 2.4p
operations
Diluted (loss)/earnings per share from discontinued 9 - (3.0)p 2.2p
operations
Basic total earnings/(loss) per share 9 14.6p (2.1)p 2.5p
Diluted total earnings/(loss) per share from all 9 14.0p (2.1)p 2.3p
operations
1. Exceptional items are detailed in note 4.
2. Interest income recognised on assets held at amortised cost under the effective interest rate method and GBP5.1 million (2024: GBP7.7 million) on money market funds held at fair value through profit and loss.
3. Net income is also referred to as "revenue".
The notes form part of these financial statements.
Consolidated balance sheet
as at 31 December 2025
31 December 31 December
Note 2025 2024
GBPm GBPm
Non-current assets
Intangible assets 10 21.3 21.2
Property, plant and equipment 7.9 9.6
Investment in associates - 0.6
Investment in trusts and co-investments 11, 15 11.9 17.8
Deferred tax asset 8 26.1 -
SME loans held at amortised cost 11, 15 1.2 1.4
68.4 50.6
Current assets
SME loans held at amortised cost 11, 15 0.9 0.7
SME loans held at fair value through profit and loss 11, 15 120.8 1.2
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DJ Funding Circle plc: Full Year 2025 Results -8-
Lines of credit 11, 15 172.9 97.1
Trade and other receivables 12 20.5 20.8
Cash and cash equivalents 16 152.4 187.6
467.5 307.4
Total assets 535.9 358.0
Current liabilities
Trade and other payables 13 30.8 27.8
Bank borrowings 15, 16 267.3 101.9
Short-term provisions and other liabilities 14, 17 2.5 3.6
Lease liabilities 16 1.8 1.8
302.4 135.1
Non-current liabilities
Long-term provisions and other liabilities 14 0.6 0.6
Lease liabilities 16 4.5 5.8
Total liabilities 307.5 141.5
Equity
Share capital 0.3 0.3
Share premium account 0.5 0.1
Foreign exchange reserve 5.3 5.3
Share options reserve 21.1 20.6
Retained earnings 201.2 190.2
Total equity 228.4 216.5
Total equity and liabilities 535.9 358.0
The financial statements were approved by the Board and authorised for issue on 05 March 2026. They were signed on behalf of the Board by:
Tony Nicol
Director
Company registration number 07123934
The notes form part of these financial statements.
Consolidated statement of changes in equity
for the year ended 31 December 2025
Share Foreign Share
Share Total
premium exchange options Retained
capital equity
Note account reserve reserve earnings/ (accumulated
losses)
GBPm GBPm
GBPm GBPm GBPm
GBPm
Balance at 1 January 2024 0.4 293.1 14.2 24.0 (84.9) 246.8
Profit for the year - - - - 8.6 8.6
Other comprehensive expense
Exchange differences on translation of
foreign operations - - (8.9) - - (8.9)
Total comprehensive (expense)/income - - (8.9) - 8.6 (0.3)
Transactions with owners
Transfer of share option costs - - - (6.6) 6.6 -
Buyback of own shares 2 (0.1) - - - (33.6) (33.7)
Capital reduction 2 - (293.5) - - 293.5 -
Issue of share capital/exercise of - 0.5 - - - 0.5
share options
Employee share schemes - value of
employee services - - - 3.2 - 3.2
Balance at 31 December 2024 0.3 0.1 5.3 20.6 190.2 216.5
Profit for the year - - - - 46.0 46.0
Other comprehensive income
Exchange differences on translation of
foreign operations - - - - - -
Total comprehensive income - - - - 46.0 46.0
Transactions with owners
Transfer of share option costs - - - (4.2) 4.2 -
Buyback of own shares 2 - - - - (30.6) (30.6)
Purchase of own shares by Employee 2 - - - - (8.6) (8.6)
Benefit Trust ("EBT")
Issue of share capital/exercise of - 0.4 - - - 0.4
share options
Employee share schemes - value of
employee services - - - 4.7 - 4.7
Balance at 31 December 2025 0.3 0.5 5.3 21.1 201.2 228.4
The notes form part of these financial statements.
Consolidated statement of cash flows
for the year ended 31 December 2025
31 December 31 December
Note 2025 2024
GBPm GBPm
Net cash outflow from operating activities 16 (33.8) (67.4)
Investing activities
Purchase of intangible assets 10 (8.9) (9.0)
Purchase of property, plant and equipment (0.6) (2.9)
Originations/purchase of SME loans held at amortised cost 15 (2.4) (0.2)
Proceeds from sale of SME loans held at amortised cost 15 0.7 -
Cash receipts from SME loans held at amortised cost 15 1.9 3.0
Originations/purchase of SME loans held at fair value through profit and 15 (180.6) -
loss
Cash receipts from SME loans held at fair value through profit and loss 15 51.8 13.5
Proceeds from sale of SME loans held at fair value through profit and loss 15 3.9 -
Investment in trusts and co-investments 15 (0.8) (4.1)
Cash receipts from investments in trusts and co-investments 15 8.2 14.6
Redemption in associates 0.6 0.9
Proceeds from sale of subsidiary 4 - 32.6
Direct costs of selling subsidiary - (2.0)
Cash disposed of on sale of subsidiary 4 - (23.1)
Net cash (outflow)/inflow from investing activities (126.2) 23.3
Financing activities
Proceeds from bank borrowings 16 176.8 52.6
Repayment of bank borrowings 16 (11.4) (6.0)
Proceeds from the exercise of share options 0.4 0.5
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DJ Funding Circle plc: Full Year 2025 Results -9-
Purchase of own shares by EBT 2 (8.6) - Buyback of own shares 2 (30.6) (33.7) Proceeds from subleases - 0.4 Payment of lease liabilities 16 (1.9) (3.6) Net cash inflow from financing activities 124.7 10.2 Net decrease in cash and cash equivalents (35.3) (33.9) Cash and cash equivalents at the beginning of the year 187.6 221.4 Effect of foreign exchange rate changes 0.1 0.1 Cash and cash equivalents at the end of the year 16 152.4 187.6
The notes form part of these financial statements.
Cash flows from discontinued operations are not shown above.
Notes forming part of the consolidated financial statements
for the year ended 31 December 2025
1. Basis of accounting
The consolidated financial statements are prepared under the historical cost basis except for certain financial instruments that are carried at fair value through profit and loss ("FVTPL").
2. Basis of preparation
The financial statements included in this preliminary announcement have been prepared in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority, and the principles of UK-adopted international accounting standards, but do not comply with the full disclosure requirements of these standards. The financial information for the year ended 31 December 2024 is derived from the statutory financial statements for that year which have been delivered to the Registrar of Companies. The auditor reported on those financial statements: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.
The financial information contained in this announcement does not constitute the statutory financial statements of the Group as at and for the year ended 31 December 2025, but is derived from those financial statements, which have been prepared in accordance with UK-adopted international accounting standards. The financial statements themselves have been approved by the Board of Directors and reported on by the auditor and will be delivered to the Registrar of Companies in due course.
Going concern
The Group made a total comprehensive income of GBP46.0 million during the year ended 31 December 2025 (2024: expense of GBP0.3 million). As at 31 December 2025, the Group had net assets of GBP228.4 million (2024: GBP216.5 million). This includes GBP152.4 million of cash and cash equivalents (2024: GBP187.6 million), of which GBP51.5 million (2024: GBP37.1 million) is held for specific purposes and is restricted in use. Within the net assets, the Group holds GBP94.5 million (2024: GBP53.5 million) of invested capital, some of which is capable of being monetised if liquidity needs arise.
The 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 at least 12 months from the date of approval of the financial statements).
The Group has prepared detailed cash flow forecasts for the next 15 months to 30 June 2027.
The base case scenario assumes:
. the economic environment remains as is with no improvement or deterioration in the macro environment forecast;
. growth in shorter-term loans;
. growth in Cashback card alongside FlexiPay lines of credit;
. the Group continues to fund the lines of credit through its balance sheet along with the senior banking facility;
. shorter-term loans are expected to be funded in the same way until December 2025 when we expect to sell the assets and switch to operating under a platform model;
. costs are controlled with any growth driven by marketing, expected credit losses ("ECL") and cost of funds. Remaining costs grow but predominantly through inflation. Strict control of headcount, with limited increases;
. the current share buyback programme concludes in April 2026 with no additional buyback or dividend assumed; and
. corporation tax begins to be paid in 2026 alongside utilising brought forward tax losses.
Management prepared a severe but plausible downside scenario in which:
. further macroeconomic volatility continues through the period with elevated inflation and interest rates reducing originations as borrower demand for loans at higher interest rates reduces and investor funding appetite reduces;
. a downside scenario is applied to Term Loans, loans under management resulting in reduced servicing fees;
. a downside scenario applied to the on-balance sheet lines of credit results in reduced net interest margins with higher cost of funds; and
. an operational event occurs, such as impacts on critical suppliers and lower corporate cash levels resulting in lost revenues and cash outlays.
The severe but plausible downside scenario results in a maximum cash outflow of GBP40 million, which is the minimum level of unrestricted cash and cash equivalents the Group will hold at all times (referred to as "management's stress buffer").
Management has reviewed its limited 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 initially shorter-term 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, specifically assessed for the 15 months to 30 June 2027.
Significant changes in the current reporting year
The financial position and performance of the Group were affected by the following events and transactions during the year ended 31 December 2025:
i) Expansion into shorter-term loans product
In April 2025, the Group expanded into a shorter-term loan product, offering fixed rate interest term loans between 6 and 24-month terms. Loans with terms over 12 months are subject to an origination fee in line with our other Term Loan products, while those with terms of 12 months or less are not subject to origination fees. The shorter-term loans generally charge higher rates of interest than FC's equivalent longer-term loans, but provide more flexibility with penalty-free prepayments and in some cases no origination fees.
Through 2025 shorter-term loans were financed through the same leveraged warehouse used to fund the FlexiPay and Cashback card product, Kanaloa 2 Limited ("K2"). The interest and fees related to the senior borrowing facility used to fund the loans is presented under "cost of funds" in the condensed consolidated statement of comprehensive income.
The intention with the shorter-term loan product is to initially build up the product on balance sheet to an appropriate level of scale whilst in an R&D phase. This enables us to iterate and evolve the product, before selling the loans to a third party investor and originating new loans under a platform strategy going forward. As we intended to sell these loans they were measured at fair value through profit and loss and presented under "SME loans held at fair value through profit and loss" on the consolidated balance sheet. Interest income and fair value gains or losses follow the existing accounting policy and presentation for SME loans held at fair value through profit and loss and are presented within the Term Loans segment of the business in note 5.
The shorter-term loans held by the Group were sold in January 2026 subsequent to the balance sheet date. Details are included in note 18.
ii) Share buyback programme extension and purchase of own shares
The share buyback programme which was launched in 2024 was further extended in May 2025 to buy and cancel up to a further GBP25 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 year to 31 December 2025, 23.0 million shares (2024: 33.5 million) were purchased and cancelled for consideration of GBP27.6 million (2024: GBP33.7 million) inclusive of fees and expenses under the programme. Additionally, the Group bought back 2.3 million shares (2024: nil) which were not cancelled and were held in treasury for consideration of GBP3.0 million (2024: GBPnil).
Additionally, the Group purchased 7.7 million shares (2024: nil) for GBP8.6 million (2024: GBPnil) during the year ended 31 December 2025, which were not cancelled and are held for the purpose of satisfying the exercise of employee share options.
iii) Recognition of deferred tax asset (notes 8 and 9)
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Deferred tax assets 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. The UK business is in, and is forecast to remain in, a taxable profit making position, and as a result past losses are anticipated to be utilised against these taxable profits resulting in the recognition of a deferred tax asset. There remains risk and uncertainty as to the amount and timing of forecast taxable profits and so the future profits are probability weighted in the calculation of the deferred tax asset. The recognition of the asset results in a credit to the income tax line of the consolidated statement of comprehensive income of GBP26.1 million. This results in a higher profit for the year and earnings per share result for the year compared to the results had the deferred tax asset not been recognised. The recognition of the deferred tax asset has not been classified as an exceptional item; however, to highlight the impact of first time recognition of the asset we have added a disclosure of earnings per share excluding the recognition of deferred tax in note 9.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the consolidated 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 financial statements have been applied on a consistent basis with the financial statements for the comparative year to 31 December 2024, except for the ECL where the model methodology has been refined (see note 15).
Critical judgements
Loans originated through the platform
The Group originates SME loans through its platform which have been funded primarily by banks, asset managers, other institutional investors, funds, national entities, retail 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.
Key sources of estimation uncertainty
The following are the key sources of estimation uncertainty that the Directors have identified in the process of applying the Group's accounting policies and have the most significant effect on the amounts recognised in the financial statements.
Expected credit loss impairment of FlexiPay lines of credit (notes 14, 15 and 17)
At 31 December 2025, the Group held GBP205.1 million of drawn FlexiPay lines of credit and GBP446.7 million of undrawn lines of credit, gross of expected credit loss impairment allowances (2024: GBP110.0 million drawn and GBP278.7 million undrawn).
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 GBP34.7 million (GBP32.2 million related to drawn lines of credit and GBP2.5 million related to undrawn) (2024: GBP15.6 million split, GBP12.9 million drawn and GBP2.7 million 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 ("PD") related to stage 1 and 2 lines of credit which is modelled based on observed trends and adjusted using probability-weighted forward-looking scenarios. Currently a baseline scenario, upside scenario and downside scenario are utilised which are probability weighted as outlined below, which provide a blended stage 1 and 2 average probability of default of 9.0%.
If 100% probability weighting was to be applied to each scenario, the weighted PD related to stage 1 and 2 lines of credit and the expected credit loss impairment provision would change as follows:
ECL scenario 100% weighting ECL GBP
to scenario
Change in average PD
compared to blended scenario
%
Change in ECL compared
to blended scenario GBP
Scenario Average
weighting % PD %
Base case 70% 100% 8.8% 34.5 (0.2)% (0.2)
Upside 15% 100% 6.0% 29.6 (3.0)% (5.1)
Downside 15% 100% 12.4% 40.9 3.4% 6.2
Blended weighted 100% 100% 9.0% 34.7 - -
scenarios
The above reflects the impact of both drawn and undrawn elements of the ECL impairment allowance.
The loss given default ("LGD") of the expected credit loss impairment allowance is estimated based on observation of the blended portfolio recoveries to date on defaulted lines of credit projected out into the future using an average 83.6% LGD. While the LGD expectation is based on the trajectory of recoveries to date, the lifetime LGD may differ from the estimated amount. A 500 bps increase/decrease in the estimated lifetime LGD would increase/decrease the expected credit loss impairment allowance by GBP0.9 million/GBP(0.9) million. It is considered that the above sensitivities represent the range of reasonably possible outcomes in relation to the LGD on FlexiPay lines of credit.
SME loans held at fair value through profit and loss (note 15)
At 31 December 2025, the carrying value of the Group's financial instrument assets held at fair value was GBP217.8 million (2024: GBP155.9 million).
In accordance with IFRS 13 Fair Value Measurement, the Group categorises financial instruments carried on the consolidated balance sheet at fair value using a three-level hierarchy. Financial instruments categorised as level 1 are valued using quoted market prices and therefore there is minimal estimation applied in determining fair value. However, the fair value of financial instruments categorised as level 2 and, in particular, level 3 is determined using valuation estimation techniques including discounted cash flow analysis and valuation models. The most significant estimation is with respect to discount rates and default rates.
SME loans held at fair value through profit and loss are the assets most sensitive to estimation uncertainty, and within this, the shorter-term loan product is the area which is materially sensitive to estimation uncertainty. A sensitivity to only the shorter term loan product inputs is shown given other SME loans held at fair value through profit and loss are not considered materially sensitive to estimation uncertainty, nor are any other financial assets held at fair value through profit and loss.
Fair
value
Relationship of
unobservable inputs to fair value
Description Unobservable input Inputs
GBPm
120.4
16.6%
Shorter-term
loans
Lifetime cumulative
default rate as % of
original
A change in the lifetime cumulative default rate by +590/-470
bps would decrease/increase fair value by GBP(11.2) million/GBP8.5
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million respectively.
The above sensitivities represent management's estimate of the reasonably possible range of outcomes and as a result the fair value of the assets could materially diverge from management's estimate.
Fair
value
Relationship of
unobservable inputs to fair value
Description Unobservable input Inputs
GBPm
Shorter-term 120.4 Risk-adjusted 22.4%
loans discount rate
A change in the discount rates by +/-200 bps would decrease/increase
fair value by GBP(1.2) million/GBP1.2 million respectively.
It is considered that the range of reasonably possible outcomes in relation to the discount rate used could be +/ -200 bps and as a result the fair value of the assets could diverge from management's estimate.
The sensitivity in expected lifetime cumulative defaults and sensitivity of the credit risk element of the risk-adjusted discount rate are most meaningful when viewed independently of each other.
As disclosed in note 18, subsequent to the year ended 31 December 2025, the assets were sold in January 2026 for a price materially in line with the fair value at the balance sheet date, and concurrently a forward flow agreement was signed related to ongoing shorter-term loan originations.
Estimation of deferred tax asset value (note 8)
During the year the Group recognised a total deferred tax asset of GBP26.1 million related to the UK business for the first time. This comprised GBP23.6 million in relation to carried forward losses for which the recognition and valuation incorporated significant judgements and estimates, and a further GBP2.5 million in relation to RDEC Step 2 credits. In order to support the recognition of the deferred tax asset, modelling was undertaken to assess the level of forecast profits which were probability weighted. This is a significant estimate, while the forecasting period used for determining the probable profits is a significant judgement.
The Board-approved five-year medium-term plan ("MTP"), which is also used in the assessment of Group viability, forms the basis of the forecast taxable profits, and has been extended for one year, using a 2% long-term growth rate assumption. The MTP forecasts anticipate continued growth in revenues and profits. Judgement is used in assessing elements of the forecasts that contain elements of uncertainty. Probability weightings are applied in order to reflect the degree of uncertainty, which increases as forecasts extend further into the future. There is estimation uncertainty related to the management forecasts and the probabilities applied to them and judgement applied in the selection of the six year forecast period. As a result, the DTA is sensitive to forecasting assumptions, and the actual utilisation of the deferred tax asset may vary from the timing and quantum expected. The judgements and estimates will be assessed on an ongoing basis.
The GBP26.1 million total deferred tax asset represents a recognition of c.73% of the brought forward loss position, and a recognition of 100% of the RDEC Step 2 credits.
If taxable forecast profits reduced by 25% this would result in a GBP6.0 million reduction of the total deferred tax asset to GBP20.1 million, or a utilisation of c.55% of the carried forward loss position, with no impact on the RDEC Step 2 credits which remain GBP2.5 million.
If the period of forecasting were reduced by 1 year, the DTA would reduce by GBP1.5 million.
If the baseline forecast profits were fully achieved then a deferred tax asset of GBP34.7 million (GBP32.2 million in relation to the carried forward losses and GBP2.5 million related to RDEC Step 2 credits) would have been recognised in full by 2030.
4. Exceptional items
The Group reflects its underlying financial results in the "before exceptional items" column of the consolidated statement of comprehensive income in order to provide a clear and consistent view of trading performance.
In the previous year, as part of its ongoing commitment to profitability, the Group launched a redundancy and cost efficiency programme during the year. This process will result in a simpler, leaner and better positioned UK-focused operation. This resulted in redundancy costs of GBP2.3 million and impairment of capitalised development spend intangible assets of GBP0.3 million which were treated as exceptional items.
The Group disposed of its investment in the US business on 1 July 2024, as detailed below which were treated as exceptional items related to discontinued operations.
31 December
2024
GBPm
Consideration received:
Cash consideration at prevailing exchange rate 32.6
Net assets disposed on (including cash and cash equivalents of GBP23.1 million) (22.2)
Gross gain on sale 10.4
Direct transaction costs for legal, advisory and other costs (2.3)
Net impact of (early vesting)/lapsing US share options 1.7
Other disposal-related costs (0.6)
Gain on sale 9.8
Reclassification of foreign currency translation reserve 8.7
Total gain as a result of disposal after reclassification of foreign currency translation reserve 18.5
5. 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 in the comparative period 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. Reporting segments are identified by the required reporting information determined by the CODM which tends to be grouped by geography in the comparative period or by products with similar characteristics. The Term Loans segment comprises the Term Loan products along with shorter-term loans, which have similar features of containing fixed Term Loans and similar revenue streams and costs. The FlexiPay segment contains our line of credit products including Cashback card and generally contains our newer product innovations and more flexible lending products.
The ExCo measures the performance of each segment primarily by reference to profit before tax. Additionally, the ExCo utilises a non-GAAP measure, profit before tax (before exceptional items), which is defined as profit/loss for the year before taxation and excluding the impact of exceptional items. Profit before tax (before exceptional items) is a measure of Group performance as it allows better comparability of the underlying performance of the business. The segment reporting 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. The segment results include an allocation of central and shared costs which are allocated on the basis of budgeted revenue generation between the segments.
31 December 2025 31 December 20241
Continuing operations Continuing operations
Term Loans FlexiPay Total Term Loans FlexiPay Total
GBPm GBPm GBPm GBPm GBPm GBPm
Transaction fees 105.8 1.2 107.0 84.7 0.6 85.3
Servicing fees 35.9 - 35.9 37.5 - 37.5
Interest income 5.6 44.6 50.2 8.3 22.6 30.9
Other fees 5.0 0.1 5.1 5.1 0.1 5.2
Operating income 152.3 45.9 198.2 135.6 23.3 158.9
Investment income 24.3 - 24.3 2.8 - 2.8
Total income 176.6 45.9 222.5 138.4 23.3 161.7
Fair value (losses)/gains (6.7) - (6.7) 4.2 - 4.2
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