Consumer lending company RateSetter has shed some light on recent profitability levels, and on where the company's focus will lie for the next couple of years.
The P2P platform posted £618,468 of profit before tax in the 2014/15 financial year, and made a smaller profit in 2013/14. Whilst relatively modest, RateSetter management is pointing to the positive bottom line as a clear sign that the business model works. As CEO Rhydian Lewis put it:
"We've proved that our model works and consistently delivers great benefits for retail investors. Our focus now is to scale up while continuing to deliver that great value."
The “scale up” to which Mr. Lewis refers will likely have an impact upon the platform’s profitability – a fact that has been acknowledged by the RateSetter boss. RateSetter expects to make a loss both in this year and in the next financial year. Significant investments will be made to hire new staff, to relocate from the company’s current office in Southwark to a new headquarters in the City, and to continue with the company’s aggressive marketing efforts. On the platform’s plans for increased spending, Mr. Lewis said:
"We are very confident in the strength of our business. Our next step will be to take on the mainstream finance industry."
An IPO stands out as one potential method of intensifying RateSetter’s assault upon the mainstream financial services sector. A number of the UK’s best-established P2P brands have been dropping IPO hints of late. But what of Rhydian’s vision for the future of RateSetter?
"We want RateSetter to be a public company - it feels a natural home for a business focused on investors."