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Post by explorep2p on Nov 5, 2017 22:28:25 GMT
Hello forum Over the last month or two, many British P2P firms have been disclosing their latest financial statements. We used this as an opportunity to update our analysis of the latest P&L, equity and revenues disclosed by the most important 30 British P2P firms. In summary - only 2 out of the 30 firms covered reported any meaningful profits in their most recent accounts. Overall the industry lost £67 million, mainly due to losses made by the larger platforms. We discuss why that is happening, and what the outlook is. Almost every British P2P firm is losing money right now |
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hazellend
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Post by hazellend on Nov 5, 2017 23:08:24 GMT
Interesting reading, thank you
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Liz
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Post by Liz on Nov 5, 2017 23:12:15 GMT
Great article. I bet the results will be vastly different in 12 months.
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jonah
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Post by jonah on Nov 6, 2017 6:13:19 GMT
Great article. I bet the results will be vastly different in 12 months. Well, zopa has been losing money for around a decade now. That said, I suspect your prediction will be accurate, as quite a few platforms may fold and therefore not be on next years version. Both AC and MT have publicly stated they are profitable so I expect their next filings to reflect this.
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Post by p2plender on Nov 6, 2017 7:44:11 GMT
Surely after a decade someone there must be thinking 'this biz plan aint working'...
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macq
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Post by macq on Nov 6, 2017 7:51:27 GMT
And yet we still invest & new companies still launch  |
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Post by chris on Nov 6, 2017 8:22:12 GMT
Great article. I bet the results will be vastly different in 12 months. Well, zopa has been losing money for around a decade now. That said, I suspect your prediction will be accurate, as quite a few platforms may fold and therefore not be on next years version. Both AC and MT have publicly stated they are profitable so I expect their next filings to reflect this. AC are indeed profitable and the next filings will reflect this.
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locutus
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Post by locutus on Nov 6, 2017 8:52:55 GMT
Fantastic article and analysis. Thank you.
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Post by Deleted on Nov 6, 2017 9:02:39 GMT
Nice article.
Any chance you could do the same but not worry about profit (which is arbitary measure only really useful over the longterm and hard to compare between businesses) but cash flow?
After all declaring a profit is just a way of paying tax, who in their right mind, at this stage in the market wants to pay tax? (well obviously a company that wants to come to the stock exchange) but if the rest want to keep their private structures then I'd assume none.
Who is actually making cash and who is still burning it and at what rate?
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pikestaff
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Post by pikestaff on Nov 6, 2017 9:26:43 GMT
@bobo The article is based on published data. Not all of the platforms will publish cash flow, although RS does.
I'd work on the assumption that cash flow is no better than profit and may be worse because some platforms (including Assetz but not RS or TC*) capitalise development costs. Assetz had £500k of intangible assets, all of which I believe to be capitalised development costs, at 31/3/16.
Adjusting [cumulative] profit/loss for [cumulative] capitalised development costs (if published) is likely to be a fair proxy for [cumulative] cash burn in most cases. I doubt there will be other significant adjustments.
*These are the platforms I use. I've not looked at others.
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angrysaveruk
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Post by angrysaveruk on Nov 6, 2017 11:11:11 GMT
Zopa are losing money at an alarming rate.
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hendragon
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Post by hendragon on Nov 6, 2017 11:46:13 GMT
Zopa are losing money at an alarming rate. their own, their investors, or even both?
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hendragon
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Post by hendragon on Nov 6, 2017 11:51:58 GMT
A very interesting, if somewhat sobering, article. My only problem with it is that I have no idea at all what might be considered a normal period for cash burn before a business becomes profitable.
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Post by Deleted on Nov 6, 2017 12:47:46 GMT
@bobo The article is based on published data. Not all of the platforms will publish cash flow, although RS does. I'd work on the assumption that cash flow is no better than profit and may be worse because some platforms (including Assetz but not RS or TC*) capitalise development costs. Assetz had £500k of intangible assets, all of which I believe to be capitalised development costs, at 31/3/16. Adjusting [cumulative] profit/loss for [cumulative] capitalised development costs (if published) is likely to be a fair proxy for [cumulative] cash burn in most cases. I doubt there will be other significant adjustments. *These are the platforms I use. I've not looked at others. Pikestaff, that makes a lot of sense, the data is available and... well that is that. However if the portal is not aiming for a listing or a sell it will minimise its profits (anyway it can), while if it is aiming for listing or a sell it will maximise them (all legally and above board). Hence lumping them all in together is a mistake. On the other hand it is clear which companies are aiming for list/sell  Ah, capitalising of development costs, good to smell the smoke of battle.
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ashtondav
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Post by ashtondav on Nov 6, 2017 16:50:44 GMT
Amazon lose money virtually every year as they decide to invest all earnings back into the business. Same with most p2p platforms.
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