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LONDON (Alliance News) - Orchard Funding Group PLC on Tuesday said it was "disappointed" its trading performance for its current financial year is now expected to be below market expectations, after it was unable to achieve the "material increases" in its revenue base it had been anticipating.
The AIM-listed finance provider said it expects its revenue for the year to end July 31 to be broadly level with the prior financial year, at GBP3.45 million, having previously said it was expecting "material increases" in revenue for the year, meaning its trading performance is now expected to be below market expectations.
Orchard said it remains well-positioned in its two core markets, and has invested in developing and expanding its senior sales team, as well as developing its software and technology platform. However, 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, Orchard said.
On top of this, the company said the new Financial Conduct Authority consumer credit regime has "significantly delayed" approval of new lender applications, which has resulted in the time-lines for insurance brokers to set up in-house finance companies, that can borrow from the company, being extended.
"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," said Chief Executive Ravi Takhar.
"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," Takhar added.
Shares in Orchard were down 24% at 83.00 pence on Tuesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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