Orchard Funding Group Plc

0.00 (0.0%)
Share Name Share Symbol Market Type Share ISIN Share Description
Orchard Funding Group Plc LSE:ORCH London Ordinary Share GB00BYZFM569 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 45.00 19 08:00:00
Bid Price Offer Price High Price Low Price Open Price
44.00 46.00 45.00 45.00 45.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Security Brokers & Dealers 6.19 1.52 7.10 6.43 9.61
Last Trade Time Trade Type Trade Size Trade Price Currency
13:06:17 O 5 45.76 GBX

Orchard Funding (ORCH) Latest News

Orchard Funding (ORCH) Discussions and Chat

Orchard Funding Forums and Chat

Date Time Title Posts
02/6/202312:00Orchard Funding - a niche lender new to AIM393
27/3/200312:36Ocean Resources Capital Holdings Plc.-

Add a New Thread

Orchard Funding (ORCH) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type

Orchard Funding (ORCH) Top Chat Posts

Top Posts
Posted at 26/4/2023 22:35 by valuewinsout
From everything I have seen from Orchard, I think that they are pretty responsive to their customers.

I did hear back from Ravi via email - when I emailed him directly rather than using the general investor relations email address. He said that he read my letter proposing a share buyback with real interest, and briefly replied to say that he saw it would benefit the shareholders, however he wasn't sure how it would benefit the company - by which I guess he meant the operating business. I made various points in reply, including that the dividends that Orchard pays, also don't directly benefit the business, and share buybacks could be considered as similar to dividends, as another way to return capital to shareholders, and that in the case of ORCH, the return for the shareholders is much better buying back shares vs doing dividends. He has not replied to this last message yet. This could mean various different things, e.g. 1) he has no interest in doing a share buyback, 2) he is interested but can't tell me that, because it would need to be announced first via RNS, 3) he is thinking about it, 4) something else. I have no idea which. In summary, at least I can say that he said that he could see how a share buyback would be beneficial to the shareholders. If anyone wants to discuss this further with me you can reach me at Stephen [at] realworthstocks.com

Posted at 23/3/2023 23:42 by valuewinsout
I've not seen anything change about the business, so the recent share price weakness may be related to the banking crisis in the US. However, Orchard Funding Group is a completely different business to most banks, and does not suffer from duration or interest rate risk since almost all of their loans are <1 year in duration.

I've written to Ravi Takhar, the Orchard CEO today, to make the case for a share buyback. This would be highly accretive to shareholders. If he does decide to do this, we will probably all hear about it first via an RNS. If he writes back to me to decline my request, I will share the response.

Despite the recent share price weakness, there is nothing to my knowledge that has fundamentally changed about the business, therefore with continued business performance, I expect a share price recovery in time. In the final results RNS released in Dec-23, the company forecast was for an increase in gross loans to >£90M.

Posted at 28/2/2023 17:39 by gbcol
1tx that is true however in the specific case I am referring to the shareholding was listed on Orchard website list of Major Shareholdings (when it was over 4%) and subsequently removed by them from the list. Therefore they were perfectly aware that the shareholding had reduced below 3% and failed to report it. If they do not reply to my follow up email I will be referring it to the FCA (who will no doubt do nothing but may investigate and could issue fines).

Why should I be so concerned you may ask? Because as the shareholder reduced through 4% and 3% without the regulation RNS being issued and therefore without us being correctly made aware of the reductions, the share price tanked. An RNS may not have led to me selling in time, or at all however the information about a major shareholder reducing would have been useful. The regulations are there for a reason and they were not followed.

Posted at 14/2/2023 15:09 by gbcol
Oh Peter!! In March you were telling us you were holding your million+ shares until at least end of 2023 but now admit that within weeks of that statement you had started to dispose of 80% of them.

No one should be taking anything on these BBs at face value but it’s always disappointing when you find out that someone that appears to be straight up has in fact been rather economical with the facts.

Furthermore it appears that you haven’t even complied with the FCA regulations. Naughty, naughty.

29 Mar '22 - 11:18 - 78 of 285 0 0 0
….. I have currently only 1,111,111 and will stick to this and take div’s until end of 2023 and then decide where next or to long term hold for bank licence and maybe even a 3 bagger takeover,

22 Dec '22 - 13:06 - 177 of 285 0 3 0
gbcol and others stay the long game and patience! A few speculative sells at 51p and it will settle back above 50p in the New Year!
I also have to admit openly I work as a consultant for Orchards Cyber Security and also own just under 3% of Orchard.

27 Jan '23 - 23:06 - 235 of 285 0 0 0
Battlebus2 and all plus CWA1 this company and share as a big 3% of company investor, part time consultant and big backer of AIM. I can only ask you to wait for early Feb 2023 for IR investor look, links and Q&A and watch OFGP bounce to 55p!!
A great share, CEO, BOD and plan and strategic plan for 2023/24!!!!!!!!!

6 Feb '23 - 14:38 - 247 of 285 0 1 0
Great time to buy, I am trickling a few extra 1,000 and 5,000 buys as and when other divis from other shares comes in. I think the seller has finished now, or sellers, as they have cleared around 250,000 between them! Hopefully this was just a blip and speculators coming in purely for divi?
Orchard is solid!

14 Feb '23 - 09:08 - 269 of 285 0 0 0
Galles I did hold more 9 months ago, but reduced my holding to invest in other shares, tactically. But I am now buying back in and intend to get to around 1,100,000 shares or around 4%. Then I will just sit and take the £30,000 a year to live on. I have always been in and out and luckily now my average at 311,190 shares is46p. Hoping to buy remaining numbers under 50p, to 55p over the next 6 months.

Posted at 14/2/2023 00:57 by valuewinsout
Hi 97Peter: Orchard currently has shareholders equity of £16.7M as of Jul-22 (last balance sheet date). It made a profit of £1.518M, this is is return on equity of 1.518/16.7 = 9%, by keeping this capital on it's balance sheet and lending it out.

If Orchard buys back a share at 45p, then it gets 16.7M equity/21.35M shares outstanding = 78p of equity for 45p: or a return of (78-45)/45 = 73% on it's money. Now - they will have to borrow money at ~6% instead of using that balance sheet capital that was used for the buyback, so that they can replace it to maintain the current level of loans. This will reduce that return to about 67%.

That's why: assuming that they can do a share buyback AND maintain current lending levels, they should launch a share buyback. They very fact of buying back some of the shares would signal to the market, that they are determined to boost shareholder value, and would boost the share price. The more shares they can buy back at those levels, the better off all remaining shareholders would be. For example, if they were able to buy back £1M of shares at 44p, then this would be 1/0.44 = 2.27M shares, or 2.27/21.35 = 10.6% of shares outstanding. This means that the future dividends would be 3/(1-0.106) = 3.36p if the dividend total payment remained the same. So they could spend £1M of their capital or 1/16.7 = 6%, and boost the dividend per remaining share by 0.36/3 = 12%.

Posted at 12/2/2023 00:28 by valuewinsout
Rainmaker: you make an excellent point. Buying back shares when they are valued significantly below book price is accretive to shareholders. It's preferable to e.g. returning capital via a special dividend, since any subsequent gains in the share price would be taxed as a capital gain, vs a special dividend being taxed as income, which is usually at a higher rate for most shareholders.

I would welcome a share buyback: it would be a signal to the market that the management are concerned with boosting the share price, so it reflects a more realistic valuation.

The only issue with a share buyback is that Orchard uses its capital, to support it's lending: so if it buys back shares it will have to borrow more in order to lend. However, I think that it could easily buy back a limited amount e.g. £1M as you suggest which would be great for the share price, helping to put a floor on the share price closer to book price rather than significantly below it, as it is now. The remaining shareholders would see their shareholding increase in value, as you can currently buy 75p per share of ORCH assets for 44p in the market, due to the current share price. Earnings and dividends would be higher every year subsequently: so I think it's a win-win.

Posted at 08/2/2023 00:09 by rainmaker
ADVFN haven't yet updated Orchard Funding's latest annual results for the year to 31 July 2022, released in December so earnings per share aren't 3.91p and were're not trading at 11.5 times earnings but earnings are 7.11p per share and therefore we're trading at just 6.32 times earnings which rose 82.9% year on year and a loan book that increased 46.4%

The Company had net income of £1.518mln,paid a 3p dividend over the last year at a cost of £0.641mln and there are 21.35mln shares. Someone mentioned a share buyback v special dividend, well share buybacks by the Company are infinitely more preferable as they are the most tax efficient way of a Company returning value to shareholders since dividends are taxed.There is also the additional benefit of clearing the overhang of shares which have consistently been depressing the share price.

If the Company purchased 10% of its 21.35mln shares so 2.135mln shares for cancellation at 45p, the cost would be £960,750.00. That's not a problem since they have £4.796mln of cash on their balance sheet and there's financially stable and a lowly geared business.

Once the share buyback has been concluded the Company will have 19.215mln shares and their eps will be 7.9p(ie £1.518mln /19.215mln)v 7.11 per share pre the buyback and the dividend per share will 3.33 per share(£641,000 /19.215mln) v 3p before so Investors have enjoyed a 10% rise in the dividend for doing absolutely nothing. There is a further benefit that the share becomes a more attractive proposition to tempt new investors with the p/e dropping from 6.32 times to a very miserly 5.7 times and the historic dividend yield rising to 7.4%



Posted at 19/1/2023 10:09 by 97peter
Slob, sorry to be blunt, but what has all that diatribe got to do with the ORCH share price and dividends??
Please keep to point and some interest to ORCH investors on here! Or a report and removal may be needed!

Posted at 19/1/2023 00:26 by valuewinsout
The Orchard Funding group annual dividend is 3p vs current share price at 47 p, so a 6.4% yield. Yes, this is below the current rate of inflation: however not all the cash earnings are paid out as dividends. 3p per share and 21.35M shares out. is £0.64M paid out in total, vs earnings after taxes of £1.52M: so they retained £0.88M. The market is currently not recognising this, but the true increase in value is £1.52M divided by £10.03M market cap: or 15.2%. So actually the increase in value is ahead of inflation - taking into account the dividend, and the retained cash earnings. This is actual money on the balance sheet. ORCH will not keep getting cheaper forever - at some point the shares will re-rate. Until they do, I am getting a 15% annual increase in the underlying value of my investment - ahead of inflation.
Posted at 02/7/2021 12:19 by rainmaker
Hi Ben,I know that you have already bought both but for your reference a copy of my original message on the Value thread posted on 20 May 2021.Although both share prices have subsequently risen, Orchard Funding(ORCH) is now 59p bid,62p offered, up 15.24% and Vector Capital is now 59p bid, 61p offered,up 23.71% IMHO there're both still very cheap and IMHO there should be plenty more upside. Orchard Funding is still trading at a discount to its net working capital and Vector, at a small premium.

A Value Investing forum, I can't resist, I have to make a quick "pit stop".Heres a couple of IMHO impressive "net nets" that I recently bought and haven't seen mentioned on this thread-

Orchard Funding(ORCH)
Market Cap £11.2mln
Number of shares 21.4mln
Share price 52.5p
Spread 50p/55p
p/e 8.13
Dividend yield 5.71%
Trading at 6.75 times, 7 year average earnings.
Net Working Capital-£15.43mln or 72.11p a share
Bargain Ratio 1.37

Vector Capital(VCAP)
Market Cap £20.4mln
Number of shares 42.0mln
Share price 48.5p
Spread 46p/51p
p/e 8.69
Dividend yield 2.94% but forecast to increase to 5.36%
Trading at 12.37 times 3 year average earnings.
Net Working Capital-£21.297 or 50.7p a share
Bargain Ratio 1.04

The reason I've bought both shares is that they are not only both very cheap, Ben Graham "bargains" but also they are both good businesses and consistently profitable,with great margins, making returns on capital employed in double digits. There're also long established and proven businesses. I believe that Vector Capital was founded in 1978 and Orchard Funding has been around some 23 years. Both pay dividends so effectively you are being paid to wait for an increase in the share price.

Both are involved in the funding business, effectively they borrow money to lend at a higher rate. Its a simple and easy to understand business model.Orchard provides customised financial fee funding solutions to accounting firms, professionals and small businesses. Through their subsidiary Bexhill, there are also involved in insurance premium funding so rather than a Customer having to pay the whole annual premium in one go, they arrange instalments say quarterly or even monthly. I read that they have never had a customer default on a payment.

I'm holding both for at least a couple of years and expect to do well.


I'll try to update more on Vector Capital later.

Orchard Funding share price data is direct from the London Stock Exchange
Your Recent History
Orchard Fu..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

Log in to ADVFN
Register Now

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

Support: +44 (0) 203 8794 460 | support@advfn.com

V: D: 20230606 15:29:31