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Orchard Funding (GB:ORCH)
:ORCH
UK Market

Orchard Funding (ORCH) AI Stock Analysis

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GB

Orchard Funding

(LSE:ORCH)

Rating:71Outperform
Price Target:
56.00p
▲(10.89%Upside)
Orchard Funding's strong technical momentum and undervaluation are the key strengths, supported by solid financial performance. However, high leverage and overbought technical indicators pose potential risks.

Orchard Funding (ORCH) vs. iShares MSCI United Kingdom ETF (EWC)

Orchard Funding Business Overview & Revenue Model

Company DescriptionOrchard Funding Group PLC is a United Kingdom-based company that specializes in providing insurance premium finance and professional fee funding solutions. The company operates primarily in the financial services sector, offering funding to clients who require assistance in spreading the cost of insurance premiums and professional fees over a period of time. Orchard Funding's core services are designed to support both individuals and businesses, enabling them to manage their cash flow more effectively.
How the Company Makes MoneyOrchard Funding Group PLC generates revenue primarily through interest income and fees related to its lending activities. The company offers insurance premium finance, which allows customers to pay their insurance premiums in installments, rather than in a lump sum, with Orchard Funding earning interest on these financed amounts. Additionally, the company provides professional fee funding, enabling clients to spread the cost of professional service fees over a set period, again generating interest income. Key revenue streams include interest charged on financed amounts and any associated service fees. Partnerships with insurance brokers and professional service firms are significant in distributing Orchard's funding solutions and expanding its client base, thereby contributing to its earnings.

Orchard Funding Financial Statement Overview

Summary
Orchard Funding exhibits strong revenue growth and effective cost management, indicated by solid gross and EBIT margins. However, high leverage and negative cash flows may hinder financial flexibility. Profitability metrics are satisfactory but reducing debt and improving cash flow conversion could stabilize finances.
Income Statement
75
Positive
Orchard Funding shows a positive revenue growth trajectory with a 22.59% increase from 2023 to 2024, indicating strong top-line expansion. The company maintains healthy gross and EBIT margins at 55.74% and 21.92%, respectively, highlighting effective cost management and operational efficiency. However, a slight decrease in net profit margin to 16.38% suggests some pressure on net income growth.
Balance Sheet
65
Positive
Orchard Funding has a high debt-to-equity ratio of 2.13, indicating significant leverage which could pose financial risk. The return on equity is decent at 8.35%, suggesting moderate profitability for shareholders. The equity ratio stands at 27.32%, reflecting a stable but low equity base relative to total assets.
Cash Flow
50
Neutral
The company faces challenges with negative free cash flow, though it has improved from the previous year. The operating cash flow to net income ratio is unfavorable, indicating potential issues in converting income into cash. The free cash flow to net income ratio is also negative, highlighting cash flow management concerns.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
10.31M9.64M7.86M6.19M4.60M5.28M
Gross Profit
10.18M5.37M4.14M4.78M3.37M4.68M
EBIT
5.70M2.11M2.24M1.88M1.05M2.20M
EBITDA
5.82M2.23M2.22M1.94M1.12M2.29M
Net Income Common Stockholders
2.31M1.58M1.71M1.52M839.00K1.27M
Balance SheetCash, Cash Equivalents and Short-Term Investments
908.00K1.48M2.55M4.80M2.17M2.30M
Total Assets
70.36M69.19M61.88M48.84M32.44M29.89M
Total Debt
40.56M40.22M34.72M25.52M12.32M11.08M
Net Debt
39.65M38.74M32.17M20.73M10.15M8.78M
Total Liabilities
49.90M50.25M44.13M32.16M16.64M14.29M
Stockholders Equity
20.43M18.90M17.75M16.68M15.80M15.60M
Cash FlowFree Cash Flow
-1.57M-6.14M-10.72M-9.94M-652.00K6.04M
Operating Cash Flow
-1.57M-5.47M-10.66M-9.92M-649.00K6.07M
Investing Cash Flow
-158.00K-628.00K-97.00K-16.00K-78.00K-20.00K
Financing Cash Flow
2.29M5.03M8.51M12.56M597.00K-5.89M

Orchard Funding Technical Analysis

Technical Analysis Sentiment
Positive
Last Price50.50
Price Trends
50DMA
38.46
Positive
100DMA
33.72
Positive
200DMA
29.69
Positive
Market Momentum
MACD
3.79
Negative
RSI
83.30
Negative
STOCH
87.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ORCH, the sentiment is Positive. The current price of 50.5 is above the 20-day moving average (MA) of 42.38, above the 50-day MA of 38.46, and above the 200-day MA of 29.69, indicating a bullish trend. The MACD of 3.79 indicates Negative momentum. The RSI at 83.30 is Negative, neither overbought nor oversold. The STOCH value of 87.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:ORCH.

Orchard Funding Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
£65.37M5.0813.00%26.02%340.22%
74
Outperform
£55.05M10.297.96%21.71%31.07%
71
Outperform
£10.78M4.6811.96%10.00%17.87%52.54%
64
Neutral
$12.86B9.797.78%16985.65%12.28%-7.82%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:ORCH
Orchard Funding
50.50
22.00
77.19%
GB:TIME
Time Finance plc
58.50
17.00
40.96%
GB:DFCH
Distribution Finance Capital Holdings Plc
40.00
10.50
35.59%

Orchard Funding Corporate Events

DividendsFinancial Disclosures
Orchard Funding Group Reports Robust Half-Year Financial Results
Positive
Mar 31, 2025

Orchard Funding Group PLC reported a strong financial performance for the half-year ending January 2025, with significant increases in revenue and profit. The company nearly doubled its profit before tax compared to the previous year, driven by increased lending volumes and improved interest margins. Despite the competitive market and geopolitical uncertainties, the company remains optimistic about maintaining its growth trajectory. The board decided to pay an interim and special dividend, reflecting the company’s robust performance.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.