Trading Update

4 February 2020

GLI Finance Limited (the "Group")
Trading Update

GLI Finance today announces a trading update.

Sancus BMS 

The Group's core business, Sancus BMS Group Limited ("Sancus BMS"), continues to grow, with its asset backed loan book increasing 19% to £199m for the year ended 31 December 2019 ("FY19"). The growth of Sancus UK has been below expectations, but the Group expects further traction in 2020 as this relatively new business becomes more established.

Whilst the financial results are still subject to audit, Sancus BMS is expected to generate revenue of approximately £13m for FY19 (31 December 2018: £13.3m).  Loan book growth did not translate to revenue growth, largely due to the Group's strategy, as previously announced, to sell down its on-balance sheet loan exposure in order to use cash assets to repay or buy back its ZDP shares, thus reducing the Group's interest income.

The Group expects to have delivered a further £1m in cost savings for FY19 due to a reduction in headcount (from 42 to 34 staff), largely from the closure of the Sancus Finance business in the UK, and from efficiencies associated with the roll out of Sancus' proprietary lending platform which launched in 2018.

As the impact of the reduction in interest income and slower than expected growth of Sancus UK outweighed the Group's cost savings, the Group expects to record a net operating loss for FY19, however the outcome is highly contingent on a proposed refinancing of a development loan, upon which the Company had previously made a provision of £1.5 million. Discussions in relation to the refinancing of the loan are progressing and, if they are successfully concluded before finalisation of the Group's audited accounts for FY19, the Group expects to release the provision and deliver a net operating profit for FY19.

More broadly, the Group remains focussed on the core asset backed lending offering across the six jurisdictions in which it operates. Sancus BMS surpassed the £1 billion total lending milestone in 2019 and, with a very strong pipeline and a proprietary electronic platform, the business is well placed to build on this and take advantage of the significant growth potential in the UK and Ireland in 2020 and beyond.

FinTech Ventures 

The Group announces that it expects a further write down in the valuation of its FinTech Ventures portfolio for FY19. Whilst still subject to audit review, the expected quantum of the write down is expected to be material.  The write down relates to some portfolio companies which have failed to achieve profitability as quickly as previously anticipated and are seeking to raise further equity capital.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.

LEI: 213800S2XOO3YSEGCA26