Fellow Finance in strong growth: Turnover grew 38,2% and profit 34,7%

Financial Year 2018 in brief              

  • Turnover was 12,0 million euros (8,7), growth 38,2%
  • EBIT was 3,4 million euros (2,5), growth 34,7%
  • Adjusted EBIT was 3,5 million euros (2,5), growth 41,7%
  • EBIT margin was 28,1%
  • Adjusted EBIT margin was 29,5%
  • Profit was 0,8 million euros
  • Adjusted profit was 1,7 million euros
  • Earnings per share (EPS) was 0,13 euros (0,19)
  • Adjusted earnings per share (Adjusted EPS) was 0,28 (0,19)
  • The Company was listed on Nasdaq First North Finland -marketplace 10 th October 2018. Nonrecurring costs related to listing were 1,1 million euros.
  • Dividend proposal EUR 0,04 per share

Half-year Financial Report July-December 2018 in brief

  • Turnover was 6,4 million euros (4,7), growth 34,5%
  • EBIT was 2,3 million euros (1,5), growth 56,6%
  • Adjusted EBIT was 2,5 million euros
  • The financial period includes nonrecurring costs EUR 1,1 million related to listing on Nasdaq First North Finland -marketplace and option incentives related to listing.

              Key ratios

EUR 1,000 (unless otherwise informed)        
(unaudited, unless otherwise informed)
CONSOLIDATED KEY FIGURES 07-12/2018 07-12/2017 1-12/2018 1-12/2017
Turnover (EUR 1,000)  6 376.3   4 741.7   11 958.8 1)   8 655,7 1)  
From which commissions 4 829.0   3 239.6   8 967.0 1)   5 975,2 1)  
From which interest yields from loans 1 547.4   1 502.0   2 991.8 1)   2 680,4 1)  
EBITDA 2 551.8   1 691.6   3 747.5   2 867,6  
EBITDA margin % 40.0 % 35.7 % 31.3 % 33,1 %
Adjusted EBITDA 2 726.63 3)   1 691.6   3 922.3 3)   2 867,6  
Adjusted EBITDA margin, % 42.8% 3) 35.7 % 32.8% 3) 33,1 %
Operating profit (EBIT) 2 347.8   1 498.9   3 357.1 1)   2 493,0 1)  
Operating profit (EBIT) -margin, % 36.8 % 31.6 % 28.1% 1) 28,8 % 1)
Adjusted operating profit (Adjusted EBIT) 2 522.6 3)   1 498.9   3 531.9 3)   2 493,0  
Adjusted operating profit (Adjusted EBIT) -margin, % 39.6% 3) 31.6 % 29.5% 3) 28,8 %
Earnings before taxes (EBT) 48.0   809.9   1 053.1 1)   1 218,2 1)  
Earnings before taxes (EBT) -margin, % 0.8 % 17.1 % 8.8 % 14,1 %
Adjusted earnings before taxes (Adjusted EBT) 1 163.1 3)   809.9   2 168.2 3)   1 218,2  
Adjusted earnings before taxes (Adjusted EBT) -margin, % 18.2% 3) 17.1 % 18.1% 3) 14,1 %
Profit for accounting period 11.9   722.6   797.9 1)   1 083,7 1)  
Adjusted profit for accounting period 904.0 3)   722.6   1 690.0 3)   1 083,7  
Lainaamo’s loan receivables rate 21 257.6   18 124.8   21 257.6   18 124,8  
Lainaamo’s outstanding interest-bearing debt 16 930.0   16 945.0   16 930.0   16 945,0  
Equity/share (issue-adjusted), EUR 2.0   0,72   2.0   0,72 2)  
Return on equity (ROE), % 0,3 % 37,9 % 8.5% 1) 29,8 % 1)
Equity ratio, % 44.8 % 19.1 % 44.8% 1) 19,1 % 1)
Personnel (average number) 31   24   27 1)   22 1)  
Earnings per share (issue-adjusted) (EPS), undiluted, EUR 0.002   0,12   0.13   0,19 2)  
Adjusted earnings per share (Adjusted EPS), undiluted, EUR 0.14 3)   0,12   0.28 3)   0,19 2)  
Salaries and incentives 929.3   512.4   1 525.5   924.8  
End balance of Balance Sheet 32 392.5   21 890.3   32 392.5   21 890.3  
Average number of outstanding shares during period (issue-adjusted) 6 401 875   5 817 625   6 112 151   5 817 625 2)  
Number of outstanding shares at end of the period (issue-adjusted) 7 128 625   5 817 625   7 128 625   5 817 625 2)  

1) Audited 2) Key Figures per share are calculated by using a number of shares adjusted in a consequence of costless share issue (share split) for the Company’s shareholders. As a part of the arrangements related to Planned Offering, it was decided by unanimous shareholders’ decision on 7 September 2018 to organize costless share issue for the Company’s shareholders. Share issue adjustment means adjustment of number of shares in consequence of costless share issue. 3 ) Adjusted with Company’s nonrecurring costs related on listing to Nasdaq’s First North Finland -marketplace and option incentives related to that. Total of 1,1 million euros was booked as costs on which 0,2 million to Personnel costs and 0,9 million to financial items. Adjusted Profit for accounting period takes on account the computational taxes if the nonrecurring costs were not actualized.

Fellow Finance’s CEO Jouni Hintikka: An eventful and successful year Our growth rate and profit were on an outstanding level in  2018. Our revenue grew almost by 40 % to 12 million euros and our operating profit grew to 3,4 million euros (adjusted operating profit was 3,5 million euros). Our operations, the number of platform users and the number of intermediated loans kept on growing rapidly throughout the whole year 2018. We intermediated loans with a record-breaking amount of 172 million euros which resulted in 74% growth compared to the previous year.

The biggest milestones in 2018 were our listing on Nasdaq First North Finland – marketplace and getting approximately 2800 new owners to the Company as well as expanding our platform to Sweden during the summer. The development work in 2018 also resulted in opening our platform in already fifth country, Denmark, in January 2019. By the end of the year we had investor clients already from around 60 different countries.

In 2019 we will continue our sustainable, profitable and strong growth towards our ambitious future goals. We will expand our platform to new markets in Europe creating foundation for the growth for becoming years and offering new financing products to our existing markets. This way we can offer diverse and interesting investment opportunities to our platform investors.

Profit Forecast 2019

The Fellow Finance Group’s turnover in 2019 is expected to grow over 30% and its adjusted operating profit (EBIT) to grow from financial year 2018.

Financial Development 2018

Fellow Finance Group´s consolidated turnover grew by 38,2% from previous financial year to 12,0 (8,7) million euros and consolidated EBIT grew by 34,7% to 3,4 (2,5) million euros. Operating profit margin was 28,1% from turnover. Parent company’s turnover grew by 44,2% from previous financial year to 7,7 (5,3) million euros and EBIT was 2,0 (0,8) million euros.

Balance sheet and funding At the end of the year, the Fellow Finance Group´s balance sheet total was 32,4 (21,9) million euros. Fellow Finance Group´s debt receivables were 21,3 (18,1) million euros, which equates to 65,6% (82,8) of total assets.

Fellow Finance Group´s interest bearing debt was 16,9 (16,9) million euros. Liabilities in total were 17,9 (17,7) million euros and equity totalled 14,5 (4,2) million euros.

Fellow Finance Group´s equity ratio was 44,8 (19,1) percent. Liquid assets increased after IPO and as a result of a positive financial performance of the Company. The financial position of the Company became stronger enabling the future growth plan.  

Capital adequacy Fellow Finance’s capital adequacy management has been organized according to the laws regulating Payment Institutions. The base of the capital adequacy management is that payment institution’s own assets, together with their quality and allocation are on a sufficient level to cover the risks that payment institution carries continuously. To calculate the required amount of assets, Fellow Finance uses transaction-based calculation method. A transaction is included in the calculation when an investor transfers money via platform to the borrower and when borrower do repayment to the investor.

Fellow Finance Plc´s total capital was 12,94 million euros (2,37) when the minimum adequate capital requirement 0,4 million euros (0,3) in the end of the financial period.

Essential events after financial period 2018 Fellow Finance expanded to Denmark in January 2019. After the financial period 2018 the Company has continued the platform development in accordance with the Company’s strategy and objectives by expanding in Europe to new markets and by creating new financial products within the current markets and therefore offering to its investor clients even more investment and diversification opportunities.

Decision taken by the annual general meeting and shareholders’ unanimous decisions The Fellow Finance Plc´s Annual General Meeting of Shareholders held in Helsinki on 31 st of January 2018. The Annual General Meeting granted release from liability of the members of the Board of Directors and the CEO.

The Annual General Meeting made a resolution to pay a dividend according to board’s proposal was totaled 511.941,00 euros.

The Annual General Meeting confirmed six (6) as the total number of the Board of Directors. Teemu Nyholm, Harri Tilev, Jorma Alanne, Riikka Rajavirta and Pontus Oinonen were elected to Fellow Finance Plc´s Board of Directors.

The Annual General Meeting elected KHT Timo Helle (Grant Thornthon) as the Auditor of the Company.

In addition to the Annual General Meeting the Company decided by the unanimous shareholders decision in Helsinki 1 st of August 2018 to change the members of the Board of Directors due to the Company’s IPO plans. The goal was to improve the Corporate Governance demanded from a listed company. The new member’s elected were Esa Laurila and Kai Myllyneva. Teemu Nyholm, Harri Tilev and Jorma Alanne continued as board members. The annual reward to the independent board members was decided to 5000 euros.

Other shareholder’s unanimous resolutions from the financial period of 2018 are addressed in the section “Share and shareholders”.

The Board, CEO and Auditors The Company’s Board of Directors is formed starting at 1 st of August 2018 by Kai Myllyneva as a chairman of the Board of Directors and Teemu Nyholm, Jorma Alanne, Harri Tilev and Esa Laurila as board members. In the financial year 2018 the board met 15 times and the participation percentage in the meetings was 100%.

The Company’s Auditor is KHT Timo Helle (Grant Thornthon).

The Company’s CEO in the financial period has been Jouni Hintikka.

Share and shareholders

The Company’s number of shares in 31 st of December 2018 was 7 128 625. The Company listed on First North Finland -marketplace during the financial period. The Company’s share capital was 125 000 euros at the end of the financial period 2018.

The Company’s shareholders decided 7 th of September unanimously on the amendments to the Company’s Articles of Association necessitated by the First North listing. The shareholders also decided on a share issue authorization to the Board of Directors, pursuant to which a maximum of 1,700,000 new shares in the Company may be issued, and on an authorization to the Board of Directors to acquire the Company’s own shares, by virtue of which a maximum of 581,762 shares in the Company may be acquired. The Authorization is valid till the end of the next annual general meeting but limited to 30 th of June 2019.

The Company’s shareholders resolved unanimously on 7 th of September 2018 to authorize the Board of Directors of the Company to decide on a directed issue of a maximum of 1,300,000 Shares of the Company and on 29 th of October 2018 private offering of 11 000 new shares as a management incentive. Other changes regarding the shares and equity is described in more detail in the offering memorandum published during the initial public offering. During the financial period Fellow Finance Plc has not owned any own shares.

Fellow Finance Plc received gross proceeds of 9,98 million euros in the initial public offering (IPO). Trading of the Company’s shares commenced on 10 th of October 2018 with the trading code FELLOW. The shares’ closing price on the last trading day on 28 th of December 2018 was 6,50 euros. The financial period’s lowest trading price was 6,20 euros and the highest 8,25 euros. Fellow Finance Plc’s market value at the end of the financial period was 46,34 million euros and the Company had 2784 shareholders.

The biggest shareholders Shareholder list is based on Euroclear Finland Oy’s list of registered shareholders. Dated 31 st December 2018.

Nro Name Stocks (%)
1 TAALERI OYJ 1 847 163 25,91
2 MARGIN INVESTMENTS OY 830 843 11,66
3 TN VENTURES OY 830 843 11,66
4 OY T&T NORDCAP AB 646 436 9,07
5 AVENSIS CAPITAL OY 277 266 3,89
6 OP-SUOMI MIKROYHTIÖT -ERIKOISSIJOITUSRAHASTO 140 060 1,96
7 VAKUUTUSOSAKEYHTIÖ HENKI-FENNIA 134 949 1,89
8 OP-SUOMI PIENYHTIÖT 130 000 1,82
9 SIJOITUSRAHASTO SÄÄSTÖPANKKI PIENYHTIÖT 129 366 1,81
10 KESKINÄINEN TYÖELÄKEVAKUUTUSYHTIÖ VARMA 100 980 1,42

Dividend policy and the Board of Directors dividend proposal

The Board of Directors of Fellow Finance made a resolution on the Company’s dividend policy on 31 st of July 2018. Fellow Finance seeks to distribute at least 30 percent of the Company´s annual net profit to its Shareholders in dividends, taking into account the Company’s financial condition and financing situation. However, the size and payment of dividend depend on at least the following: Company profits and financial condition, future investments, cash flow, amount of net debt and loan servicing requirements, and other factors deemed material by the Board. The dividend policy is in effect until further notice.

At the end of the financial period 2018 the parent company´s distributable assets were 13.436.667,11 euros of which the financial period’s 2018 profit was 828.942,72 euros.

The Board of Directors proposes to the Annual General Meeting of Shareholders that a dividend of EUR 0,04 per share be paid, which counts for 30% of the Company´s earnings per share.

Consolidated income statement, balance sheet, cash flow statement and change in equity (FAS)

CONSOLIDATED INCOME STATEMENT (1000eur)                
  1.7-31.12.2018   1.7-31.12.2017   1.1-31.12.2018   1.1-31.12.2017
          (audited)   (audited)
TURNOVER 6 376.3   4 741.7   11 958.8   8 655.7
               
Other operating income 0.0   4.5   2.3   9.0
               
Materials and services              
External services -1 284.8   -1 500.2   -3 788.7   -2 976.0
Materials and services total -1 284.8   -1 500.2   -3 788.7   -2 976.0
               
Personnel expenses              
Wages and salaries -869.1   -473.4   -1 414.1   -846.8
Pension expenses -123.4   -89.3   -226.8   -157.7
Other non-wage expenses -26.5   -16.6   -40.4   -26.4
Personnel expenses total -1 019.0   -579.4   -1 681.4   -1 031.0
               
Depreciation and amortization              
Depreciation according to plan -191.5   -180.4   -365.5   -349.8
Depreciation on consolidated   goodwill -12.4   -12.4   -24.8   -24.8
Depreciation and amortization total -204.0   -192.8   -390.3   -374.6
               
Other operating costs -1 520.7   -975.0   -2 743.5   -1 790.1
               
OPERATING PROFIT/LOSS 2 347.8   1 498.9   3 357.1   2 493.0
               
Financial income and expenses              
Other interest and financial income              
From others 1.8   3.2   2.3   3.2
Interest and other financial    expenses              
To others -2 301.7   -692.2   -2 306.3   -1 278.0
Financial income and expenses total -2 299.8   -689.0   -2 304.0   -1 274.8
               
PROFIT/LOSS BEFORE APPROPRIATIONS AND TAXES 48.0   809.9   1 053.1   1 218.2
               
Income taxes -36.1   -87.3   -255.2   -134.5
               
PROFIT/LOSS FOR THE PERIOD 11.9   722.6   797.9   1 083.7
CONSOLIDATED BALANCE SHEET (1000eur)      
       
ASSETS 31.12.2018   31.12.2017
       
NON-CURRENT ASSETS      
       
Intangible assets      
Other capitalized long-term expenditure 620.4   380.4
Goodwill 35.2   60.0
Intangible assets total 655.6   440.4
       
Tangible assets      
Machinery and equipment 191.2   46.3
Tangible assets total 191.2   46.3
       
TOTAL NON-CURRENT ASSETS 846.8   486.7
       
CURRENT ASSETS      
       
Receivables      
       
Non-current      
Loan receivables 15 846.3   13 471.3
Non-current receivables total 15 846.3   13 471.3
       
Current      
Trade receivables 95.7   112.0
Loan recevables 5 411.3   4 616.7
Other recevables 1 156.9   1 182.2
Prepayments and accrued income 347.5   267.1
Current receivables total 7 011.3   6 178.0
       
Cash and cash equivalents      
Cash equivalents 0.0   2.5
Cash at banks 8 688.1   1 751.8
Cash and cash equivalents total 8 688.1   1 754.3
       
TOTAL CURRENT ASSETS 31 545.7   21 403.6
       
TOTAL ASSETS 32 392.5   21 890.3
CONSOLIDATED BALANCE SHEET (1000eur)      
       
EQUITY AND LIABILITES 31.12.2018   31.12.2017
       
SHAREHOLDER’S EQUITY      
Share capital 125.0   125.0
Invested unrestricted equity reserve 13 039.4   2 977.5
Retained earnings/loss 563.5   -10.3
Profit/loss for the period 797.9   1 083.7
       
TOTAL SHAREHOLDER’S EQUITY 14 525.8   4 175.9
       
       
LIABILITES      
Non-current      
Loans from financial institutions 2 000.0   5 300.0
Other liabilities 11 215.0   11 245.0
Non-current liabilities total 13 215.0   16 545.0
       
Current      
Loans from financial institutions 800.0   0.0
Trade payables 275.9   322.5
Other liabilites 3 017.9   477.6
Accruals and deferred income 558.0   369.3
Current liabilities total 4 651.8   1 169.4
       
TOTAL LIABILITES 17 866.8   17 714.4
       
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 32 392.5   21 890.3
CONSOLIDATED CASH FLOW STATEMENT (1000 eur)      
         
Cash flow from operations 1.1-31.12.2018   1.1-31.12.2017
         
         
Profit (loss) before extraordinary items 1 053.1   1 218.2
  Depreciation and amortisation according to plan 390.3   374.6
  Financial income and expenses 2 304.0   1 274.8
Cash flow before change in working capital 3 747.5   2 867.6
         
Change in net working capital      
  Increase (-)/decrease (+) in short-term non-interest-bearing receivables -38.7   570.0
  Increase (+)/decrease (-) in short-term non-interest-bearing debts 216.4   107.2
Cash flow from business operations before financial items and taxes 3 925.2   3 544.8
         
  Interest paid and payments made for other financial expenditure -2 306.3   -1 278.0
  Interest on business operations 2.3   3.2
  Direct taxes paid -304.2   -149.1
Cash flow from business operations (A) 1 316.9   2 120.9
         
Cash flow from investments      
  Investments in tangible and intangible assets -750.5   -168.2
  Loans extended increase(-)/decrease(+) -3 169.6   -6 026.3
Cash flow from investments (B) -3 920.1   -6 194.5
         
Cash flow from financing activities      
  Public share issue 10 061.8    
  Withdrawals of current loans 500.0    
  Repayments of current loans -715.0    
  Withdrawals of non-current loans 2 700.0   4 010.0
  Repayments of non-current loans -2 500.0   -400.0
  Dividends paid and other distribution of profit -512.0    
  Translation difference 2.1   -5.0
Cash flow from financing activities (C) 9 537.0   3 605.0
         
Change in cash and cash equivalents 6 933.8   -468.6
         
  Cash and cash equivalents at the beginning of the period 1 754.3   2 223.0
  Cash and cash equivalents at the end of the period 8 688.1   1 754.3
  Change in cash and cash equivalents 6 933.8   -468.6
Change in SH’s equity  Financial period 2018 (1000eur) Share capital Invested unrestricted equity reserve Retained earnings/loss SH’s EQUITY TOTAL
Start balance 1.1.2018 125.0 2 977.5 1 072.4 4 175.0
Dividend     -512.0 -512.0
Option subscriptions   83.5   83.5
Share issue   9 978.4   9 978.4
Translation differences     3.1 3.1
Profit/loss for the period     797.9 797.9
End balance 31.12.2018 125.0 13 039.4 1 361.4 14 525.8
         
Change in SH’s equity  Financial period 2017 (1000eur) Share capital Invested unrestricted equity reserve Retained earnings/loss SH’s EQUITY TOTAL
Start balance 1.1.2017 125.0 2 977.5 185.3 3 287.8
Dividend       0.0
Option subscriptions       0.0
Share issue       0.0
Translation differences     -6.1 -6.1
Profit/loss for the period     894.2 894.2
End balance 31.12.2017 125.0 2 977.5 1 073.4 4 175.9
         
Change in SH’s equity  Financial period 07-12/2017 (1000eur) Share capital Invested unrestricted equity reserve Retained earnings/loss SH’s EQUITY TOTAL
Start balance 1.7.2017 125.0 2 977.5 1 350.0 4 452.6
Dividend       0.0
Option subscriptions   83.5   83.5
Share issue   9 978.4   9 978.4
Translation differences     -0.6 -0.6
Profit/loss for the period     11.9 11.9
End balance 31.12.2017 125.0 13 039.4 1 361.4 14 525.8
         
Change in SH’s equity  Financial period 07-12/2018 (1000eur) Share capital Invested unrestricted equity reserve Retained earnings/loss SH’s EQUITY TOTAL
Start balance 1.7.2018 125.0 2 977.5 351.2 3 453.7
Dividend       0.0
Option subscriptions       0.0
Share issue       0.0
Translation differences     -0.4 -0.4
Profit/loss for the period     722.6 722.6
End balance 31.12.2018 125.0 2 977.5 1 073.4 4 175.9

Investor Calendar 2019 The Annual Report and Financial Statements for 2018 will be published on the Company’s website www.fellowfinance.fi on week 10, 2019. The Annual General Meeting of Fellow Finance Plc is planned to be held in Helsinki on 3 rd of April 2019. The Half-year Financial Report (January-June 2019) will be published on 23 rd of August 2019.

FELLOW FINANCE PLC The Board of Directors

 

Further enquieries

Jouni Hintikka

CEO, Fellow Finance Plc

Tel. +358 40 585 5009

jouni.hintikka@fellowfinance.fi

 

Certified advisor

Evli Bank Plc tel. +358 40 579 6210

Fellow Finance in Brief

Fellow Finance Plc  launched its operations in 2014 and it is an internationally active and growth-oriented FinTech group that provides crowdfunding services for people and businesses. Fellow Finance is the leading¹ Nordic loan-based crowdfunding and peer-to-peer lending platform which has over 520 000 users from around 60 countries. Fellow Finance Plc is regulated by the Financial Supervisory Authority of Finland as an Authorized Payment Institution. Fellow Finance Plc is listed on Nasdaq First North Finland and The Company has around 2800 shareholders.

 

¹Measured by amount of financing facilitated. Source: Brismo Market Data (data accessed on 4 February 2019).

 

Calculation of Key Figures

EBITDA = Operating profit + Depreciation, amortization and impairment losses
EBITDA margin, % = Operating profit + Depreciation, amortization and impairment losses
Turnover
Adjusted EBITDA = EBITDA + non-recurring operative costs 1
Adjusted EBITDA margin, % = Operating profit + non-recurring operative costs 1
Turnover
Adjusted operating profit (Adjusted EBIT) = Operating profit + non-recurring operative costs 1
Adjusted operating profit (Adjusted EBIT) margin, % = Operating profit + non-recurring operative costs 1
Turnover
Earnings before taxes (EBT), margin, % = Profit for the year + income taxes
Turnover
Adjusted earnings before taxes (Adjusted EBT) = Profit for the year + income taxes + non-recurring operative costs 1 + non-recurring financing costs 2
Adjusted profit for the year = Profit for the year + non-recurring operative costs 1 + non-recurring financing costs 2
Equity ratio, % = Equity
Balance sheet total – prepayments received
Return on equity (ROE), % = Profit for the year (annualised)
Equity (average)
Earnings per share (EPS), undiluted, EUR = Profit for the year
Share split-adjusted 3 average number of outstanding shares during period
Adjusted earnings per share (oadjusted EPS), undiluted, EUR = Adjusted profit for the year
Share split 3 average number of outstanding shares during period