Funding Circle share price tumbles after revenue growth warning
The peer-to-peer (P2P) lender saw its share price take a major tumble on Tuesday after it cut its revenue growth forecast in half.
Funding Circle saw its share price slide by more than 29% on Tuesday, after it slashed its revenue growth forecast for 2019 in half.
The alternative lender said that it expects revenues to grow by 20% in 2019, down from its initial forecast of around 40%.
The P2P lender, which operates in the UK, US, Germany and the Netherlands, saw its stock close at 164p a share on Monday, only for it fall to 115p a share as of 17:10 GMT on Tuesday following its latest trading update.
Funding Circle revenue growth hit by economic uncertainty
Funding Circle blamed the ‘uncertain economic environment’ for the reduction in demand for loans from small businesses and forced the lender to tighten its lending criteria.
‘As a result, revenue growth will be impacted. We recognise that this is a change from our previous guidance, but we are taking the prudent course of action for the long-term growth and development of our business,’ Funding Circle CEO and Co-Founder Samir Desai said.
‘We remain confident in our aim to become the world's largest small business loans provider, helping millions of businesses to create jobs and support economic growth,’ he added.
Funding Circle yet to turn a profit
The P2P lender listed on the London Stock Exchange late last year, hitting the public market with an opening share price of 440p.
Since then, however, the stock has lost more than 73% of its value, with investors growing increasingly concerned with the company's inability to turn a profit as it continues to focus on growing its global footprint.
But with the company’s growth forecast cut in half, Funding Circle announced that it has puts it plans to enter the Canadian market on hold in favour of focusing on growing in existing markets like the UK and the US.
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