GLI Finance Limited Trading and financial update (9125F)

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RNS Number : 9125F

GLI Finance Limited

17 November 2015

17 Nov 2015

GLI Finance Limited

Trading and financial update

The Board is pleased to provide the following trading and financial update having completed the repositioning of its activities, which are now focussed on four complementary areas:

-- Alternative lending Platforms (whether wholly owned or as a significant shareholder) in several countries

   --     Direct lending, mainly through the Platforms 

-- Fund management with the first fund (GLI Alternative Finance PLC "GLI Alt Fi") listed in September 2015

   --     Investment in GLI's managed fund 

GLI was an early mover in the Peer-to-Peer (P2P) lending sector and has assembled a portfolio of Platforms that provide lending diversity by duration, geography and asset type and use highly differentiated origination strategies. The rapid growth in the sector (Liberum AltFi index for business P2P lenders for the 12 months to 11 Nov 2015 is up 128.11% in UK, and 153.45% in Continental Europe - YTD GBP1.12bn) is an international phenomenon and GLI, with Platforms in the UK, Continental Europe, USA and Africa, continues to assess opportunities throughout the world.

Direct lending activity

GLI's direct lending activity is complementary to its investment in the Platforms enhancing their ability to attract borrowers and providing loan origination channels for GLI which generated interest at an average rate of around 10% on its portfolio during the nine months ended 30 September 2015. Loan losses/provisions were approximately 0.7% of the closing loan book during the nine months ended September 2015.

Managed funds

GLI's wholly owned subsidiary GLI Asset Management Ltd is an authorised fund manager and intends to launch a range of investment funds with differing strategies. GLI's strategic aim of increasing the size and number of its managed funds changes its risk profile as it generates fee income from the managed portfolios with decreasing direct exposure to loan losses.

Its first fund, "GLI Alt Fi" is a London listed investment trust was launched in September 2015. GLI Alt Fi has acquired GBP40.2m direct loans from GLI resulting in GLI holding 76% of GLI Alt Fi's issued share capital. The target dividend yield on GLI Alt Fi's shares is 8% per annum.

It is intended that GLI Alt Fi, which has already raised GBP12.5m from third party investors, will continue to issue new shares enabling it to expand and diversify its portfolio, reducing GLI's percentage shareholding. GLI receives management fee income of 0.75% per annum of GLI Alt Fi's net asset value (or of market capitalisation, if lower) of up to GBP100m, and 0.5% of any excess.

Financial update

The Company intends to publish its Net Asset Value formally, incorporating the results of a review of the value of its investments in Platforms, by mid December. Reflecting, in particular the launch of GLI Alt Fi, the segmental analysis of GLI's statement of financial position has changed significantly since 30 June 2015.

Unaudited management accounts as at 30 September 2015 indicate as follows:

 
                                                           30 June 
                                       30 Sept 2015           2015 
                                        GBP'million    GBP'million 
 Loan portfolio GLI family 
  of Platforms                                48.88          76.05 
 Loan Portfolio through third 
  parties                                      0.55           7.25 
 Platforms (loans and investments)*           62.84          61.25 
 Investment in GLI Alt Fi**                   41.18              0 
 Cash                                          0.25           2.55 
 Debtors                                       2.89           4.40 
 Assets                                      156.59         151.50 
 
 Creditors and accruals                      (0.98)         (0.95) 
 Borrowings                                 (22.99)        (16.50) 
 ZDP Shares                                 (21.84)        (21.52) 
 Net assets                                  110.78         112.53 
 
 

* The investments in Platforms (some of which are subsidiaries and others are associated companies) are shown at cost less impairments unless a transaction or third party valuation provides evidence of a higher value. However, as at the date of this announcement, no fair value adjustments have been made since 30 June 2015 (the date of GLI's interim financial statements).

** The investment in "GLI Alt Fi", an investment trust managed by GLI Asset Management Limited is shown at GLI's share of its net assets. The GLI Alt Fi shares held by GLI as at 30 September 2015 represented 76% of its issued share capital and had a mid-market value of GBP41.2m. In statutory accounts, GLI Alt Fi would be consolidated as a subsidiary of GLI, rather than the investment in GLI Alt Fi being shown as a separate asset.

The table below shows the lending type of GLI's loan portfolio through its own family of platforms and third parties as at 30 September 2015.

 
 Direct Loans 
                                   GBP'million 
 Invoice Finance                          3.57 
 Trade Finance                            0.23 
 Bonds                                    0.10 
 Term Lending                            44.98 
 Total through GLI Platforms             48.88 
 Loans through third parties              0.55 
 Total                                   49.43 
 
 
 

A similar analysis of GLI Alternative Finance plc's statement of financial position and portfolio of loans through the GLI family of Platforms as at 30 September 2015 is set out below:

 
 
                                        GBP'million 
 Loan portfolio GLI family of 
  Platforms                                   32.64 
 Loan Portfolio through third 
  parties                                      5.70 
 Platforms (loans and investments)             0.53 
 Cash                                         13.54 
 Debtors                                       0.56 
 Other assets                                  0.03 
 Creditors and accruals                      (0.52) 
                                     -------------- 
 Net assets                                   52.48 
                                     -------------- 
 
 
 Loan portfolio GLI Family of Platforms 
                                            GBP'million 
 Invoice Finance                                   0.42 
 Bonds                                             0.50 
 Term Lending                                     31.72 
 
 Total: GLI Platforms                             32.64 
                                           ------------ 
 
 
 
 

GLI is currently undertaking some test marketing, which may or may not lead to the issue of further securities to refinance certain existing borrowings as well as providing additional working and growth capital.

For further information, please contact:

GLI Finance Limited

Geoffrey Miller

[phone]

[phone]

Panmure Gordon (Nominated Adviser and Corporate Broker)

Dominic Morley / Tom Salvesen

[phone]

Peter Steel

[phone]

Camarco (PR Advisor)

Ed Gascoigne-Pees

[phone]

[phone]

Hazel Stevenson

[phone]

[phone]

About GLI Finance Limited

GLI Finance (www.glifinance.com) is a specialist provider of finance to small and medium sized enterprises. Its ordinary shares are quoted on AIM and its issued zero dividend preference shares are listed and traded on the main market of the London Stock Exchange (ticker GLIF). GLI Finance both invests in loans to SMEs and originates finance for SMEs through a variety of finance platforms.

The platforms in which GLI Finance is invested vary by geography, industry, size of lending and by type of lending. They include Global Trade Finance, UK and US SME Lending, Offshore Lending, UK invoice discounting, European invoice discounting, Global multi-asset crowd funding and UK property-backed lending.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 17, 2015 02:00 ET (07:00 GMT)