Funding Circle closed down 8.7% at 210p on 8 September after Lisa Jacobs told the board she intends to leave the chief executive role no later than September 2027. The stock opened 10% lower, wiping out much of the gain from a first half the London-listed SME lender had presented as its strongest on record.
Jacobs joined Funding Circle in 2012 and took the top job in January 2022. Her departure notice, delivered alongside first-half results, hands the board a search window of up to twelve months.
The market reaction was the story. Analysts at Investec said the timing was "likely to come as a surprise to investors". Cavendish said the exit would take "some gloss off" a strong first half. A single-day fall of that size on a succession announcement is a blunt statement about how much of the equity story shareholders attribute to one executive.
The share price context sharpens it. Funding Circle floated in 2018 at 440p, a level it has not seen since. Jacobs inherited a company down roughly 75% from that debut and losing ground as pandemic-era government-backed lending schemes wound down.
Total income fell to £206.9m in 2021 from £222m the year before, then dropped again in her first year as chief executive to £148.7m, with a headline loss of £12.9m.
Her response was a medium-term plan launched in 2022 to turn a small business loan book into a multi-product platform, funding the Flexipay buy now, pay later product and an international push.
Two years later much of that was reversed. Facing a capital structure in the United States that did not match its operations, Funding Circle sold the US business for £33m, booking a £10m gain on the retreat. In the UK it cut 120 roles to deliver £15m of annual cost savings.
The retrenchment worked for the register. Shares climbed more than 500% over the following two and a half years, though from a heavily depressed base and still less than half the IPO price.
Chair Ken Stannard said the company has extended more than £18bn of credit to over 135,000 SMEs since 2012 and has delivered the transformation plan set out in March 2024 to build a simpler, higher-growth and more profitable business. A formal search for a successor begins now.
Jacobs said the latest results showed the business in the best position it has been in, and that this made it the right moment to begin handing over.
The board's problem is that the plan investors bought is now closely identified with the person leaving. Whoever succeeds Jacobs inherits a lender that has returned to growth but still trades at less than half its float price eight years on.
Original source: City AM (additional reporting: BusinessCloud)
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