homes119
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Post by homes119 on May 6, 2016 6:54:51 GMT
Hello everyone,
I am considering diversifying (platform/asset types) into MT.
Does anyone know if MT is currently profitable? Or if 2015 accounts will show a profit for MT?
Thank you!
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davex
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Post by davex on May 6, 2016 7:59:15 GMT
Clearly a question for Ed MoneyThing , from this investors point of view the answer is yes, highly recommended. |
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Post by MoneyThing on May 6, 2016 8:28:36 GMT
Morning,
Whilst I am pleased to say that we have been profitable for a number of months now, because the 2015 accounts only cover the early months since launch, they will not show an overall profit (although only a modest loss).
Kind regards,
Ed
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shimself
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Post by shimself on May 6, 2016 9:06:37 GMT
Hello everyone, I am considering diversifying (platform/asset types) into MT. Does anyone know if MT is currently profitable? Or if 2015 accounts will show a profit for MT? Thank you! What a really good question. I would refine it by asking who audits the accounts (Madoff) though I guess that's somewhat over the top for a 1Mish t/o company. I'm struck by how many companies have size of loan book on their front page (which they care about and we don't as long as they are big enough) and no mention of investor profits (vice versa), I immediately see this as a company that has lost sight of what customers need (unlike MT) ED - I clearly get the impression you are a very small team, with software in house, substituting skill and competence for headcount. Which suits me fine, but might not be your best route to an IPO (or whatever). What is the running rate of loans issued which amount to breakeven, and are you paying yourselves a good wage? If in 10 years time the business was in the same order of magnitude as it is now will it have been worthwhile?
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Post by Deleted on May 6, 2016 9:57:57 GMT
got to be a bit careful with the words "investing" and "lending". Most of us on here are lenders, though I'm assuming Ed is an investor. I would have thought the concept of cash burn is more the issue for a start up, as Terry Smith used to say when I was at college, "profit; what would you like it to be?"  |
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shimself
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Post by shimself on May 6, 2016 10:03:50 GMT
got to be a bit careful with the words "investing" and "lending". Most of us on here are lenders, though I'm assuming Ed is an investor. I would have thought the concept of cash burn is more the issue for a start up, as Terry Smith used to say when I was at college, "profit; what would you like it to be?" ED is the boss of moneything. And yes ED what can you tell us about cash burn please?
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Post by mrclondon on May 6, 2016 10:43:26 GMT
Whilst profitable organic growth as MT, SS and a few others have achieved is reassuring, TC is a salutary lesson in how such a plan can go wrong.
TC's thin margins and well constrained costs provided profitability, and growth was indeed organic, however there simply wasn't enough margin being generated to re-invest into the software development costs and the recruitment of employees with the specialist knowledge needed as the business scaled. Ultimately they had to be taken over (in effect) by an institutional funder, and TC have lost a tremendous amount of lender goodwill through their inability to re-invest in the business over the last few years.
At this stage in the life of the p2p sector its far from clear who the long term winners will be, but the unprofitable platforms that are using venture capital / private equity to fund their growth are every bit as likely to be around in ten years time as the small well profitable platforms. The losers are likely to be the small(er) platforms that are not generating sufficient profits to be able to re-invest in the business.
An ex-shareholder / director of TC has stated on the TC forum that he believes post the initial startup phase, a platform will need to write a minimum of £30m of loans each year to recoup the startup costs (including FCA compliance), be profitable (from shareholders perspective), and re-invest. Which is an interesting rule of thumb when applied to a number of platforms that have been trading for a few years now. MT's £10m of loans in its first year is a very encouraging start.
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shimself
Member of DD Central
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Post by shimself on May 6, 2016 12:37:32 GMT
Whilst profitable organic growth as MT, SS and a few others have achieved is reassuring, TC is a salutary lesson in how such a plan can go wrong.
TC's thin margins and well constrained costs provided profitability, and growth was indeed organic, however there simply wasn't enough margin being generated to re-invest into the software development costs and the recruitment of employees with the specialist knowledge needed as the business scaled. .....
It's my guess that MT have got their software thru sweat equity (basically they do it themselves), for a small fraction of TC's spend. I think TC went awry the programmers weren't that good then belatedly having decided to go elsewhere (with much internal politics muddying the waters) they spent a huge amount on trying to integrate a new user friendly front end with the existing data which proved to be impractical. With different people and or different decisions there was a way of doing it. In any event, software, schmoftware, TC still offer lots of very decent loans and remain my number one platform.
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