01 oct 25   orchard funding grp - unaudited results for 12 months orchard funding ltd. | orch | 62.5 5.0 8.7% | mkt cap: 13.3m    rns number : 4906b orchard funding group plc 01 october 2025   orchard funding group plc ("orchard funding group" or the "company" or the "group") unaudited results for the twelve months ended 31 july 2025   twelve month results orchard funding group, the finance group which specialises in insurance premium finance and the professions funding market, announces its unaudited results for the twelve months ended 31 july 2025. as reported on 26 june 2025, for operational reasons, the parent and its subsidiaries changed their accounting reference dates from 31 july 2025 to 31 january 2026. these financial statements are therefore interim, unaudited financial statements. five-year summaries (all £m):  2025 2024 2023 2022 2021 lending - non-toyota 109.52 101.32 88.76 72.39 57.73 lending - toyota 12.24 13.38 11.11 7.57 3.29 total lending 121.76 114.70 99.87 79.96 61.02       loan book - non-toyota 49.32 52.04 47.40 37.66 27.15 loan book - toyota 16.99 14.94 11.59 6.08 2.72 total loan book 66.31 66.98 58.99 43.74 29.87       borrowing 32.86 40.22 34.72 25.53 12.32       gross total income 10.50 9.64 7.86 6.19 4.60       net total income 8.30 6.89 5.60 4.85 3.44       operating costs (excluding impairment charges) 4.25 3.60 3.30 2.91 2.52       impairment charges 0.04 1.17 0.14 0.06 -0.13 operating profit   4.01 2.11 2.16 1.88 1.05       loan book comprises gross loans to customers less expected credit loss provision. gross total income consists of interest receivable together with other trading income. net total income is gross total income after direct costs.      ravi takhar, chief executive officer of the company, stated:   "we are pleased to confirm the completion of another record-breaking successful twelve months. we have had record lending of over £120 million, record income of over £10 million, record pbt of over £4 million and record pat of over £3 million. our performance represents a very satisfactory post tax return on average equity of 14.89%   "we continue to focus and succeed in our core market of insurance premium finance, where we compete effectively despite our competitors being much bigger than us, in terms of spending power, balance sheet and staff numbers.   "we thank our customers for their loyalty, our staff for their hard work and our finance providers toyota and natwest for their great support to our business.   "we are pleased to confirm that we will be paying a further 1p interim dividend on december 15, 2025. this is in addition to the 1p interim and 1p special dividend paid earlier this year in june."     for further information, please contact: orchard funding group plc                                                         +44 (0)1582 346 248 ravi takhar, chief executive officer allenby capital limited (nomad and broker)                              +44 (0)20 3328 5656 nick naylor/james reeve (corporate finance) amrit nahal/jos pinnington (sales and corporate broking) for investor relations please go to: www.orchardfundinggroupplc.com     chairman's statement    following our half year financial results, our strong performance has continued and we have achieved lending volumes, income, and profitability in excess of anything we have achieved before.  this robust performance has continued to be driven by lending volume growth in our core insurance premium funding markets together with improved margins as we have seen a gradual reduction in base lending rates. this outturn is particularly pleasing following last year's difficult year when we were impacted by the significant fraud and an increase in impairments.  this highlights the resilience of our business and is a testament to the hard work of our team and the ongoing support of our funders and partners. at the half year stage, we paid a 1p interim dividend together with a special dividend payment of an additional 1p.  with the change in our year end to january 2026, i am pleased to confirm that we will pay a further 1p interim dividend. looking ahead, whilst global geopolitical risks persist and the outlook for the uk economy and regulatory environment remains uncertain, the board is still optimistic regarding continued controlled growth for our business whilst keeping a watchful eye for any significant impact on our customers or partners.          steven hicks chairman      chief financial officer's statement   the world commercial outlook has changed very little since my last report to 31 january 2025 and economic growth has continued to slow. inflation has increased from 2.98% in the year to 31 january 2025 to 3.80% in the year to 31 july 2025. bank of england base rate fell from 4.75% in january 2025 to 4.00% in august 2025.   the group has performed exceptionally well in the 12 months to 31 july 2025 compared to previous years. as was mentioned at the last half year report, kpis and other financial indicators have been adjusted for toyota income which does not form part of interest income but is part of other income. this adjustment is reflected in lending and the loan book. lending is up by 8.10% for non-toyota products from £101.32m to £109.52m and down 8.52% for toyota from £13.38m to £12.24m. insurance premium financing (both to premium funding companies and to individuals through our partners) has seen a 10.33% increase from £93.46m to £103.12m. this has been the most substantial growth area and was expected to be. a reduction in the toyota market was expected and was reported last year. as a result, we adjusted our internal forecasts substantially down in respect of this lending. however, this market has performed better than our expectations with toyota finding an alternative vehicle to deliver their product. pbt increased by 89.51% from £2.12m to £4.01m. this came about because of a number of factors: we have improved the rates on our lending as indicated by the gross interest margin rising from 15.43% to 17.38% and an increase in lending; the amount of impairment allowance fell as shown below; operating costs, although higher, have been well controlled. operating costs excluding impairment losses are 17.96% higher from £3.60m to £4.25m. impairment charge has fallen by 96.65% from £1.17m to £0.04m. of the £650k increase in operating costs, employee costs accounted for £285k and commissions £203k. the large impairment charge in the previous year arose as a result of the fraud and for insurethat, both of which were fully explained in the previous year's accounts. impairment reviews are carried out at each reporting period on all financial assets. the method employed for assessing impairments arising from lending is shown in the audited accounts to 31 july 2024 and is based on expected credit losses (ecls). as part of this exercise we review debts to establish whether they have moved from one ecl stage to another. there have been no substantial material movements from stage 1 and stage 2 since the 31 july 2024. at 31 july 2025 the provision was £1,190k (31 july 2024 £1,146k). other assets (fixed assets and investments) are also subject to impairment reviews but no provision is needed this period. net financial assets (all financial assets less all financial liabilities) are up by 17.10% to £23.55m from £20.11m. liquidity (net current assets) was up by 9.23% from £19.83m to £21.66m. financial assets at the year end amounted to £67.02m (2024 £68.55m). financial liabilities amounted £43.47m (2024 £48.44m). the group has used more of its own resources this year as a result of which external, unrestricted borrowing has fallen from £22.98m to £15.55m.      on 15 august 2024, open b gateway limited became a 90% subsidiary of the parent. on 19 march 2024, the group took a further 30% stake by way of transfer from an existing shareholder in open b gateway limited at a cost of £nil. the intention was to get better control of the company which provided open banking software to the group. the group also took over the management of the company. it therefore became a 60% subsidiary on that date. on 15 august 2024 a further 300 shares were transferred from a shareholder in open b to the company, giving it a 90% share in open b. these were transferred at £nil cost   principal risks and uncertainties the group's activities expose it to a variety of risks: ·    credit risk ·    liquidity risk ·    interest rate risk ·    non-repayment risk ·    systems risk ·    conduct risk our principal risks are shown in the full year financial statements to 31 july 2024. a full explanation of each of them together with their impact and mitigation are detailed in those financial statements. there have been no changes to the various risks other than changes to credit risk. credit risk was high last year and credit losses were 1.81% of gross income generating assets - above our risk appetite of 1.00%. the main causes of this were that one of our introducing partners went into administration and there was a fraud. following a board level review, our processes have been made more secure. the board believe that this risk has fallen this year. financial key performance (kpis) and other performance indicators our kpis are set so that fluctuations outside a certain tolerance would trigger an examination of our operations to establish why these fluctuations have occurred and, if necessary, take any remedial action deemed necessary the following table gives a breakdown of group kpis as well as indicators not considered kpis but which give a better understanding of the progress of the group.   all £m unless otherwise stated 2025 2024 2023 2022 2021 kpis lending volumes      excluding toyota products £109.52 £101.32 £88.76 £72.39 £57.73 toyota products £12.24 £13.38 £11.12 £7.57 £3.29 total lending volumes £121.76 £114.70 £99.88 £79.96 £61.02 average interest earning assets1      excluding toyota products £50.68 £49.72 £42.53 £32.41 £27.23 toyota products £15.96 £13.26 £8.83 £4.40 £1.36 average interest earning assets £66.64 £62.98 £51.36 £36.81 £28.59 total revenue £10.50 £9.64 £7.86 £6.19 £4.60 average external funding2 £22.58 £23.92 £20.32 £15.77 £9.28 cost of external funds £1.72 £1.91 £1.35 £0.59 £0.56 cost of funds/funds ratio3 7.57% 7.94% 6.70% 3.57% 6.03% own resources (net financial assets) £23.55 £20.11 £19.20 £17.61 £15.88 operating costs (excluding impairment provisions) £4.25 £3.60 £3.30 £2.91 £2.52 impairment provisions £0.04 £1.17 £0.14 £0.06 -£0.13 net interest margin (as restated)4 13.99% 11.58% 11.15% 13.48% 11.83% roae (return on average equity)5 14.89% 8.56% 9.94% 9.36% 5.35% other performance indicators net interest income £7.09 £5.76 £4.87 £4.41 £3.22 profit before tax £4.01 £2.12 £2.17 £1.88 £1.05 profit after tax £3.01 £1.57 £1.71 £1.52 £0.84 gross interest margin (as restated)6 17.38% 15.43% 14.32% 15.31% 13.88% eps (pence) 7 14.37 7.39 8.03 7.11 3.91 dps (pence) 8 2.00 0.00 3.00 3.00 3.00 return on capital employed (roce)9 7.63% 3.83% 4.43% 5.20% 4.32%   1.   average interest earning assets consist of the average of the opening and closing loan book after taking account of the impairment provision. 2.   average external funding comprises amounts borrowed on a daily basis net of repayments. 3.   cost of funds/funds ratio is the cost of external funds divided by average external funding. 4.   net interest margin is net interest income divided by the average loan book. in previous years the average loan book included balances in respect of toyota business on which there is no interest income. this has been rectified and figures for each of the previous years restated. 5.   roae consists of profit after tax divided by average equity. average equity is the average of opening and closing equity. 6.   gross interest margin is gross interest income divided by the average loan book. the same comments apply regarding toyota business as are made regarding net interest income. 7.   there are no factors which would dilute earnings therefore fully diluted earnings per share are identical. 8.   dividends per share are based on interim dividends paid in the year and proposed final dividend for the 12 months. 9.   roce consists of earnings before interest, tax, depreciation and amortisation divided by capital employed. capital employed comprises capital and reserves together with borrowings, less cash held. future developments there has been little change in how we wish to grow the business in the future. fee funding, site fee and school fee income have fallen this year and it is expected that they will fall further. against that, we have seen growth in pfc, insurance premium funding, asset financing and bridging finance. we are still exploring complementary markets but will only sell into these if they fit our risk and return profile. since 31 july we have acquired 2 more subsidiaries. these companies complement what we do. both are involved in providing finance for insurance premiums. despite the fact that we have secure sources of funding at present, we shall continue to look at alternative sources of liquidity as this is of key importance to our business. the coming year will continue to prove a challenge as a result of ongoing negative world events and an uncertain uk economy, but we have already shown that we are up to that challenge in increasing our performance in an already testing environment. our focus will remain on building on our successes of the last 12 months. dividend the board is pleased to declare a further interim dividend of 1p per share to be paid on 15 december 2025 to shareholders on the register on 5 december 2025, with an ex-dividend date of 4 december 2025. this dividend is in addition to the 1p interim and 1p special dividend paid in june 2025.     liam mcshane, chief financial officer  consolidated statement of comprehensive income      2025 2024  notes £000 £000 continuing operations    interest receivable and similar income 2 8,805 7,674 interest payable and similar charges  (1,719) (1,911) net interest income  7,086 5,763 other trading income 2 1,694 1,966 other direct costs  (483) (844) net other income  1,211 1,122     net total income  8,297 6,885     other operating costs  (4,249) (3,601) net impairment losses on financial assets  (39) (1,235) reversal of impairment loss on investment at fair value through profit and loss  - 75 fair value adjustment for goodwill on consolidation  - (11) operating profit  4,009 2,113 interest receivable  4 6 interest payable  - - profit before tax  4,013 2,119 tax 3 (1,008) (552) profit for the 12 months from continuing operations attributable to:    owners of the parent  3,067 1,579 non-controlling interests  (62) (12)   3,005 1,567     earnings per share (pence)    basic and diluted 4 14.37 7.39       consolidated statement of financial position    2025 2024  notes £000 £000 non-current assets    property, plant and equipment  449 448 intangible assets  69 145 investment at fair value through profit and loss  6 6 loans to customers  9,429 9,038   9,953 9,637     current assets    loans to customers  56,874 57,944 other receivables and prepayments  85 122 cash and cash equivalents:         bank balances  639 1,482   57,598 59,548 total assets   67,551 69,185     liabilities    current liabilities    trade and other payables  11,634 9,488 borrowings  22,761 29,693 current tax payable  1,548 542   35,943 39,723     non-current liabilities    borrowings  10,095 10,529 deferred tax liabilities  3 1   10,098 10,530 total liabilities  46,041 50,253     equity    called up share capital  214 214 share premium  8,692 8,692 merger reserve  891 891 retained earnings  11,744 9,104 equity attributable to:    owners of the parent  21,541 18,901 non-controlling interests  (31) 31 total equity  21,510 18,932     total equity and liabilities  67,551 69,185         consolidated statement of changes in equity   called up share capital retained earnings share premium merger reserve attributable to the owners of the parent non-controlling interests total equity   £000 £000 £000 £000 £000 £000 £000         balance at 1 august 2023 214 7,952 8,692 891 17,749 - 17,749           non-controlling interests at the date of acquisition      43 43 profit and total comprehensive income - 1,579 - - 1,579 (12) 1,567 transactions with owners:        dividends paid - (427) - - (427) - (427)         balance at 31 july 2024 214 9,104 8,692 891 18,901 31 18,932         profit and total comprehensive income - 3,067  - 3,067 (62) 3,005 transactions with owners:        dividends paid - (427)  - (427) - (427)         balance at 31 july 2025 214 11,744 8,692 891 21,541 (31) 21,510           retained earnings consist of accumulated profits less losses of the group. they represent the amounts available for further investment in group activities. only the element which constitutes profits of the parent company are available for distribution. there are no restrictions on payment of dividends by the subsidiaries to the parent or by the parent to shareholders. the share premium account arose on the ipo on 1 july 2015 at a premium of 95p per share. costs of the ipo have been deducted from the account as permitted by ifrs and the companies act 2006. the merger reserve arose through the formation of the group on 23 june 2015 using the capital reorganisation method.  consolidated statement of cash flows    2025 2024     £000 £000 cash flows from operating activities:    operating profit  4,009 2,113 depreciation and amortisation  90 95 reversal of impairment loss on investment at fair value through profit and loss  - 11 goodwill on acquisition written off  - (75) adjustment for assets and liabilities at date of acquisition  - 107   4,099 decrease/(increase) in loans to customers, other receivables and prepayments  716 (7,837) increase in trade and other payables  2,188 575   7,003 tax paid  - (460)    net cash generated/(absorbed) by operating activities  7,003 (5,471)         cash flows from investing activities    interest received  4 6 purchases of property, plant and equipment  (14) (453) deposit paid on property  - - purchase of intangible assets  - (214) transfer of intangible assets purchased in the previous year  - 33     net cash absorbed by investing activities  (10) (628)         cash flows from financing activities    dividends paid  (427) (427) net receipts from borrowings  - 5,473 net borrowings repaid  (7,409) - lease repayments  - (15)     net cash (absorbed)/generated by financing activities   (7,836) 5,031     net decrease in cash and cash equivalents   (843) (1,068) cash and cash equivalents at the beginning of the year  1,482 2,550     cash and cash equivalents at the end of 12 months   639 1,482        cash and cash equivalents consist of bank balances.      notes to the consolidated financial statements   1.       general information orchard funding group plc ("the company") and its subsidiaries (together "the group") provide funding and funding support systems to insurance brokers and professional firms through the trading subsidiaries. the group operates in the united kingdom. the company is a public company listed on the aim market of the london stock exchange, incorporated in england and wales and domiciled in the united kingdom. the address of its registered office is 222 armstrong road, luton, bedfordshire lu2 0fy. the condensed consolidated interim financial information for the 12 months ended 31 july 2025 has been prepared in accordance with the presentation, recognition and measurement requirements of applicable uk adopted international accounting standards ('ifrs') except that the group has not applied ias 34, interim financial reporting, which is not mandatory for uk groups listed on aim, in the preparation of the condensed consolidated interim financial information. the financial information does not include all of the information required for full annual financial statements and should be read in conjunction with the financial statements of the group for the year ended 31 july 2024 which are prepared in accordance with ifrs. the accounting policies used in the preparation of condensed consolidated interim financial information for the 12 months ended 31 july 2025 are in accordance with the presentation, recognition and measurement criteria of ifrs and are consistent with those which are expected to be adopted in the annual statutory financial statements for the eighteen months ending 31 january 2026. there are a number of new standards, amendments and interpretations that have been issued but are not effective for these financial statements. they are not expected to impact the financial statements as either they are not relevant to the group's activities or are consistent with accounting policies already followed by the group. under the expected credit loss (ecl) model required in ifrs 9, there has been a further £39k charged to consolidated income (31 july 2024 £1,235). last year included a provision for a fraud amounting to £479k. the main focus of the assessment is debt arrears as, although based on past performance, they are the best indicator of potential default. the increase over the provision at 31 july 2024 is not large and is commensurate with the increase in the loan book. arrears are under control and there are no other factors which would indicate potential credit losses. in assessing potential provisions, the group has adopted the simplified approach which requires the entity to recognise a loss allowance based on lifetime ecls at each reporting date, right from origination. part of this process has been to examine the impact of ongoing international situation. the group's 2024 annual report provides full details of significant judgements and estimates used in the application of the group's accounting policies. there have been no significant changes to these judgements and estimates during the period. the financial information included in this document is unaudited and does not comprise statutory accounts within the meaning of section 434 of the companies act 2006. the comparative figures for the financial year ended 31 july 2024 are the group's statutory accounts for that financial year. those accounts have been reported on by the company's auditor and delivered to the registrar of companies. the report of the auditor was (i) unqualified, (ii) did not include a reference to matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the companies act 2006.     2.       operating segments the group's activities are providing funding for insurance premiums, professional fees, school fees, leisure activities and asset financing wholly within the uk. most of our lending meets the criteria for aggregation as the underwriting process, management of the loans, distribution channels, risks and rewards are all similar. the group does report to the board of directors (the chief operating decision makers ("codm")) in terms of two segments - lending for toyota products (shown as "toyota products" in these financial statements) which carry no credit risk and have a lower return, and other lending (shown as "standard lending" in these financial statements), the nature of which is similar in terms of risk, reward and processes. the codm reviews monthly management information including our kpis. revenue (which for these purposes includes interest income, which is outside the scope of ifrs 15) consists of income which is recognised at a single point in time and that which occurs over a given period. there is a small amount of income falling within the scope of ifrs 15 which is recognisable over more than one year. any discounting would be immaterial.   revenue recognition by timing:   2025   2024    standard toyota   standard toyota   total lending products total lending products  £000 £000 £000 £000 £000 £000         over time - interest revenue outside the scope of ifrs 15 7,740 7,740 - 6,735 6,735 - at a point in time - non utilisation fees 899 899 - 773 773 - at a point in time - default and settlement fees 166 166 - 166 166 - interest receivable and similar income 8,805 8,805 - 7,674 7,674 - at a point in time - direct debit charges 396 396 - 558 558 - over time - loan administrative fees 1,163 499 664 1,264 675 589 over time - licence fees 135 135 - 144 144 - other trading income 1,694 1,030 664 1,966 1,377 589 total revenue 10,499 9,835 664 9,640 9,051 589             expenses by nature      2025    central standard toyota   total costs lending products revenue £000 £000 £000 £000 interest revenue 8,805 - 8,805 - other revenue 1,694 - 1,030 664  10,499 - 9,835 664      interest payable and similar charges     interest payable in direct costs 1,640 - 1,640 - bank fees in direct costs 79 - 79 -  1,719 - 1,719 - other direct costs     bank fees in direct costs 483 - 358 125      net total income 8,297 - 7,758 539      other operating costs     employee costs 1,991 943 1,048 - advertising and selling costs 1,058 - 1,058 - professional and legal fees 360 136 221 3 it costs 308 - 308 - cost of listing 93 93 - - depreciation and amortisation 89  89 - other net expenses 350 2 345 3   4,249 1,174 3,069 6      impairment allowance (39) - (39) -      operating profit 4,009 (1,174) 4,650 533      interest receivable 4  4 - interest payable -  - - profit before tax 4,013 (1,174) 4,654 533         expenses by nature      2024    central standard toyota   total costs lending products revenue £000 £000 £000 £000 interest revenue 7,674 - 7,674 - other revenue 1,966 - 1,377 589  9,640 - 9,051 589      interest payable and similar charges     interest payable in direct costs 1,842 - 1,842 - bank fees in direct costs 69 - 69 -  1,911 - 1,911 - other direct costs     bank fees in direct costs 844 - 738 106      net total income 6,885 - 6,402 483      other operating costs     employee costs 1,710 788 801 121 advertising and selling costs 853 - 838 15 professional and legal fees 315 119 194 2 it costs 221 - 221 - cost of listing 83 83 - - depreciation and amortisation 95  95 - other net expenses 324 2 321 1   3,601 992 2,470 139      impairment losses (1,160) - (1,160) - goodwill on consolidation written off (11) - (11) -      operating profit 2,113 (992) 2,761 344      interest receivable 6 - 6 - interest payable - - - - profit before tax 2,119 (992) 2,761 344        3.       tax expense the tax assessed for the 12 months differs from the applicable corporation tax rate in the uk (25% for 2025 and 25.00% for 2024) because of the effect of items disallowed for tax and accelerated capital allowances.   4.       earnings per share earnings per share is based on the profit for the 12 months of £3.06m (2024 - £1.58m) attributable to the owners and the weighted average number of the ordinary shares in issue during the 12 months of 21.35m (2024 - 21.35m). there are no options or other factors which would dilute these therefore the fully diluted earnings per share is identical.   this information is provided by rns, the news service of the london stock exchange. rns is approved by the financial conduct authority to act as a primary information provider in the united kingdom. terms and conditions relating to the use and distribution of this information may apply. for further information, please contact 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