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Orchard Funding Group PLC on Tuesday confirmed it would not be paying a dividend, although the firm remained optimistic about its future prospects.
Shares in the firm surged 16% to 24.93 pence on Tuesday afternoon in London.
For the financial year ended July 31, the Luton, England-based specialist in insurance premium finance and the professions funding market said its pretax profit narrowed slightly year-on-year by to 2.5% to £2.1 million from £2.2 million, with Orchard’s board expressing contentment ‘given the level of impairment allowance’.
Impairment charges over the period grew significantly to £1.2 million from £140,000 the prior year.
Throughout the period Orchard was subject to an external fraud and one of its largest introducers entered administration, with Chair Steven Hicks stating that: ‘The financial impact of the last two events is £811,000.’
Revenue for the AIM-listed firm grew by 23% to £9.6 million from £7.9million the prior year, boosted by a rise in interest revenue over the period. Orchard reported an 18% on-year increase in net interest income to £5.8 million from £4.9 million.
Net total income rose 23% to £6.9 million from £5.6 million.
In line with its capital allocation statement in May, where it reviewed the benefits of maintaining its AIM listing, the firm said it is not proposing a dividend. This compares with a final dividend last financial year of 2 pence per share.
The firm said it is mindful of how economic challenges could affect its customers, but said it is ‘encouraged by the normalisation of inflationary conditions and the expected gradual shift to a lower base rate environment’.
Orchard Chief Executive Ravi Takhar said: ‘Our business is resilient. We have had to endure a number of impacts to our group during the year and notwithstanding those impacts, we have continued to trade confidently and profitably.
‘We are...optimistic about the prospects for the business going forward.’
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