GLI Finance shutters loss-making supply chain unit
By Iain Gilbert
Date: Friday 08 Feb 2019
(Sharecast News) - GLI Finance announced on Friday that it will close its loss-making supply chain finance unit in order to focus on its asset-backed lending offering.
The AIM-listed outfit said, while Sancus Finance's performance improved in 2018, the division was still behind management expectations with a forecast operating loss of £1m for the year.
GLI believes the market for supply chain finance "has changed significantly", with credit insurers reducing appetite to write cover and increasing premiums markedly.
The group's remaining operations in the UK will remain focussed on its core asset-backed lending offering, provided by Sancus BMS.
In terms of results, GLI said Sancus BMS saw revenues grow approximately 28% year-on-year to £13m after it generated record loan origination levels of £168m - a 21% improvement.
However, GLI warned that it expects to suffer "further material write-downs" in its fintech ventures portfolio after it became increasingly apparent that several of its investments were "finding it harder to raise further capital at the valuation levels previously expected".
"Those that successfully raised further capital in 2018 are better placed to execute on their long-term business plans but this has, in some cases, resulted in a significant dilution for GLI," added GLI.
As of 1045 GMT, GLI shares had tumbled 31.03% to 5p.
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