wysiati
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Post by wysiati on Dec 29, 2014 18:52:41 GMT
Is this credit score very different from other (p2p lending) startups? After all they are a young company. It is very difficult to make direct comparisons. However the performance of FC is an example of a business getting most things financial right. IIRC FC lost about £500k in the first year, made about £1M the second year and has piled up the cash ever since.
Forgive me, but how on earth do you reach those conclusions? Look at the FC P&L reserve figures and CFO figures. The business did not (for those years filed) generate accounting profits or generate cash from its operations. FC limited's P&L account reserve shows the following progression: 2010 -£518k, 2011 -£1660k, 2012 -£5522k, 2013 -£9483k FC Limited's Net cash from Operations figure for 2012 was -£3.89m and for 2013 was -£3.66m The improving Shareholder Funds position reflected significant capital raising exercises successfully completed by the business. It does not mean that FC made a profit. It will be interesting to see whether there was an inflection point in 2014 with the progress made by the platform but, as always, we shall have to look in the rear view mirror at the actual numbers.
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Post by bracknellboy on Dec 29, 2014 18:57:27 GMT
I was going to make a very similar point but without the numbers to fall back on: what I do recall is that 3 (?) years ago or so the founders shovelled in about £10m of additional equity (so it was reported). So while their balance sheet/asset position might have looked OK, I was far from convinced that their operating p/L would have looked as rosy as described by merlin.
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Post by batchoy on Dec 29, 2014 19:12:47 GMT
The only thing that I can see that coincides with the first drop is FF going under, but as I have already stated the subscription service that I use has made no changes to its ratings for Assetz SME Capital in the last 12 months so one has to wonder what Company Check see that Experian (the ultimate owners of the service I use) don't or vice versa.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Dec 29, 2014 19:59:35 GMT
I was going to make a very similar point but without the numbers to fall back on: what I do recall is that 3 (?) years ago or so the founders shovelled in about £10m of additional equity (so it was reported). So while their balance sheet/asset position might have looked OK, I was far from convinced that their operating p/L would have looked as rosy as described by merlin. You are probably right bracknellboy I was quoting on the same basis as the AC example Assets minus Liabilities, not profits. IIRC Amazon failed to make a profit for the first 10 years of its existence and in fact made some huge losses but throughout its Assets minus Liabilities were always positive thanks to the banks putting in many millions of dollars. In the same period the share price went from virtually zero to over $150 with the banks holding most of the equity. I hope the same will apply to AC in time.
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Post by Ton ⓉⓞⓃ on Dec 29, 2014 21:19:51 GMT
As has already been said, the figures aren't too unusual, all I need to know are the owners still prepared to move the business forward putting in more money if needed. AC seems to have just signed an new agreement with IFG. So I think it's business as usual. Is there anyhting to indicate otherwise?
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mikes1531
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Post by mikes1531 on Dec 29, 2014 21:50:20 GMT
When did that director leave ? I believe that is sometimes a trigger for a credit down grading. Edit: November or there abouts so scrap that thought November may have been when the announcement was made, but the Company Check website shows they left w.e.f. 31/August. Then again, they were a director of Assetz Capital rather than Assetz SME.
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mikes1531
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Post by mikes1531 on Dec 29, 2014 22:21:58 GMT
So, what spooked them after August 5? The question that I cannot avoid to ask is, was the higher rate a sprat to catch a mackerel? In other words had AC been subsidising higher rate of return in order to pull in business during the early start up phase? There's bound to be a bit of that, because AC needed to build up its roster of investors, and what better way is there to do that than by offering very good returns? Having said that, though, IIRC the early credit reports did specify AC's share of the income from most deals - either as lump-sum direct fees or as a annual percentage 'loan monitoring fee', and those were positive, so if there were subsidies it wasn't obvious. What we don't know is whether those fees would have been even higher if they weren't trying to encourage more investment. Having built up an investor base, AC could have decided that they still could raise the investor funds they needed with lower returns to investors and that would help them encourage more borrowers to come to them to allow them to realise their aggressive growth plans, and that could have been a contributor to the lower returns to investors. With the changes to credit reports and repayment schedule info AC now release, it's much harder to see what level of fees AC are charging now, and whether those might also have increased. AC's recent apparent reduction in deal flow, and the fact that there are an awful lot of underwriter units still for sale in the Aftermarket -- 48% of the 9% London Retail loan is still available nearly seven months after it was drawn down, and 72% of the 9% London Retail 2 loan is still available four months after it was drawn down -- does not seem to indicate that AC's strategy has been particularly effective. We have no way to know whether the GEIA has been particularly successful, though the vast amount of wind turbine loan units still on the Aftermarket suggests that funds haven't been pouring into the GEI accounts. It remains to be seen what the AC/IFG product will look like and how successful it might be.
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koba
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Post by koba on Dec 30, 2014 8:06:27 GMT
I also subscribe to CompanyCheck and use it routinely - the automated update function in particular is very useful to let me know when new information has been filed on one of the companies I am invested / interested in. Unfortunately, the credit rating algorithm is somewhat wonky to say the least and triggers major revisions for no apparent reason. The credit rating for my own private investment company has varied, for example, from 39 to 95 over the last 15 months during which time there have been absolutely no changes of any note to the underlying business or financials. The initial image has disappeared from the OP; no trolling intended just asking a question based on public info.  |
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jonno
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Post by jonno on Dec 30, 2014 10:24:52 GMT
koba: forgive me, but I wonder ,therefore why you choose to routinely subscribe to this particular service?
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koba
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Post by koba on Dec 30, 2014 10:49:09 GMT
Because the raw information available is relatively complete and easily accessed and the alert system works rather well. In any case, I tend to like to make up my own mind about the creditworthiness of any given company so the automated credit rating is, for me, not really essential. koba: forgive me, but I wonder ,therefore why you choose to routinely subscribe to this particular service? |
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jonno
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Post by jonno on Dec 30, 2014 11:18:45 GMT
Because the raw information available is relatively complete and easily accessed and the alert system works rather well. In any case, I tend to like to make up my own mind about the creditworthiness of any given company so the automated credit rating is, for me, not really essential. koba: forgive me, but I wonder ,therefore why you choose to routinely subscribe to this particular service? Thanks for that-I was just curious
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Post by stuartassetzcapital on Dec 30, 2014 17:47:29 GMT
Hi all
Yes this is nothing more than a typical automated credit rating for a start up business. The change would have come when we posted the accounts at Companies House recently. We have chosen a debt structure for some of our initial business funding and that won't have helped the credit rating but it does help other things. As we are still in growth mode the accounts rating wouldn't change too much for the 2015 accounts except that we are going through a Round A fund raise shortly that will improve the balance sheet substantially as the time is now right to do this.
We achieved monthly break-even earlier in 2014, a rare situation for a peer to peer business, before turning up the growth dial again and growing the team and other overheads again. Investors in businesses like ours don't like to see profits at this stage and would rather see re-investment in growth instead. This level of investment helped us grow around 400% YOY in 2014 and expect more of the same in 2015 as deal flow comes on-line. IFG is just the start of a long list of large deals we will be announcing in Q1 and Q2 that will help lenders achieve great returns and also further improve liquidity of their investments. We didn't announce it but we also went on MoneySuperMarket.com before Christmas.
As raised a little way through the thread, I can confirm that the Green Energy Income Account has started off very well and although we don't publish data on these investment accounts it has already received £500k of investment and this is accelerating nicely and i wouldn't be surprised to see several million pounds a month later in 2015. Expect more investment accounts covering various specific loan types in Q1, the next should be announced in the 1st full week of January.
Hope that helps.
Stuart
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Dec 31, 2014 10:32:23 GMT
stuartassetzcapital many thanks for your explanation of the current state of affairs at AC and a general steer on the businesses future direction. Two things come to mind are: you mention strengthening your capital base. Are you going to offer the lenders an opportunity to invest directly in AC? Second, you mention several new directions for AC in the coming year but how much will this divert management attention away from clearing up the over-running BL's currently in existence?
Happy and a profitable New Year to all at AC.
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Post by stuartassetzcapital on Dec 31, 2014 12:10:46 GMT
Hi merlin Without doing any kind of promotion (given we have lending permissions not equity permissions) I can confirm we would like to be able to make any equity offering available to lenders if possible and I am working on how we could possibly achieve that even with strong institutional interest as would want to reward lenders who have supported the business. I am not aware of any substantial peer to peer lender offering this early stage opportunity to private investors and Lending Club has seen an increase in its valuation of 120x ($80m to $9.56bn) from the date of its first proper fund raising in around four and a half years. I can also confirm that it is different sets of people working on the BL recovery and credit in general vs the business funding activities and in general we continue to grow the management team and the team in general apace. And a happy and profitable year to all of our lenders and thank you again for all of your support and feedback, it is really appreciated. Stuart |
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shimself
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Post by shimself on Dec 31, 2014 15:42:30 GMT
.... I am not aware of any substantial peer to peer lender offering this early stage opportunity to private investors.... .... Stuart TheHousecrowd of this parish for one
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