Funding Circle sent into a spin as it pulls out of loans fund. Shares in took a 5% hit on Friday as it pulled out of a fund aimed at the small business loans market. It said that FCIF (Funding Circle SME Income Fund Limited) shareholders had indicted they want it to stop investing and be wound up in an “orderly and expeditious fashion”. Samir Desai, Funding Circle’s CEO and co-founder, said: “A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform.” Funding Circle floated at 440p in October. Today they fell 16p to 326p, which leaves the company valued at £1.13 billion.
A spate of UK mid-cap stocks were downgraded today as analysts fired off Sell ratings like a politician furiously tabling Brexit amendments. Purplebricks Group (PURP), the colourful online estate agency, was the hardest hit, with shares falling to the bottom of the stock market as Berenberg invoked Greek mythology in a note entitled “The Icarus of Solihull” to warn the purple one had “flown too close to the sun”. The business, still reeling from a February profit warning, took a bath after it was reduced from a Buy in the broker’s 75-page analysis of UK estate agents which rated rival Countrywide (CWD) a Buy. Berenberg feels Purplebricks is “running out of steam” in the UK and burning through £7 million a month on marketing — those glitzy ads don’t come cheap — which could force it to go cap in hand to shareholders or pullback from international markets.
Close Brothers Group (CBG), which owns brokers Winterfloods, was slashed to a Sell by Investec’s banking guru Ian Gordon despite the fact that he still likes the stock. The reason? A “nigh on impossible to justify” valuation, he said, in contrast to Investec’s top pick OneSavings Bank. Close thinks of itself as a “counter-cyclical lender” (it says here) but with the UK unemployment in rude health investors may have to wait for the sunny uplands.
Stagecoach Group (SGC) dropped to the bottom of the index after being downgraded by Jefferies. The Virgin Trains West Coast may be flying but London buses are the problem. The broker slashed earnings forecasts for the London bus division after flagging higher costs because of rising wages and too many buses on Stagecoach’s traditional stomping ground of east London.
