Orchard Funding (ORCH) AI Stock Analysis

• Market Cap: £12.07M
• Dividend Yield: 1.77%
• Average Volume (3M): 74.90K
• Price to Earnings (P/E): 5.2
• Beta (1Y): -0.72
• Revenue Growth: 17.87%
• EPS Growth: 52.54%
• Country: UK
• Employees: 23
• Sector: Financial
• Sector Strength: 80
• Industry: Financial - Credit Services
• EPS (TTM): 0.11
• Shares Outstanding: 21,354,168
• 10 Day Avg. Volume: 65,854
• 30 Day Avg. Volume: 74,904
• PEG Ratio: 0.12
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £71.00
• Price Target Upside: 25.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: 66.00p ▲(16.81%Upside)

The overall stock score of 74 is driven by strong technical indicators and attractive valuation, suggesting potential upside. However, financial risks related to high leverage and negative cash flows temper the outlook. Positive corporate expectations for FY2025 earnings reinforce growth potential.

Orchard Funding Business Overview & Revenue Model

Company Description

Orchard Funding Group plc, through its subsidiaries, provides insurance premium finance, professional fee funding, and finance services in the United Kingdom. It offers credit to businesses and consumers to spread the cost of their insurance premiums; and professional customized fee funding solutions to accounting firms, professionals, and small businesses to spread the costs of their professional fees. The company was founded in 2002 and is based in Luton, the United Kingdom.

How the Company Makes Money

Orchard 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 displays strong revenue growth and effective cost management with solid gross and EBIT margins. However, challenges with high leverage and negative cash flows could affect financial flexibility. Profitability metrics are satisfactory, but focus on reducing debt and improving cash flow conversion would enhance financial stability.

Income Statement

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

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

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	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	10.31M	9.64M	7.86M	6.19M	4.60M	5.28M
Gross Profit	10.18M	5.37M	4.14M	4.78M	3.37M	4.68M
EBITDA	5.82M	2.23M	2.22M	1.94M	1.12M	2.29M
Net Income	2.31M	1.58M	1.71M	1.52M	839.00K	1.27M
Balance Sheet
Total Assets	70.36M	69.19M	61.88M	48.84M	32.44M	29.89M
Cash, Cash Equivalents and Short-Term Investments	908.00K	1.48M	2.55M	4.80M	2.17M	2.30M
Total Debt	40.56M	40.22M	34.72M	25.52M	12.32M	11.08M
Total Liabilities	49.90M	50.25M	44.13M	32.16M	16.64M	14.29M
Stockholders Equity	20.43M	18.90M	17.75M	16.68M	15.80M	15.60M
Cash Flow
Free Cash Flow	-1.57M	-6.14M	-10.72M	-9.94M	-652.00K	6.04M
Operating Cash Flow	-1.57M	-5.47M	-10.66M	-9.92M	-649.00K	6.07M
Investing Cash Flow	-158.00K	-628.00K	-97.00K	-16.00K	-78.00K	-20.00K
Financing Cash Flow	2.29M	5.03M	8.51M	12.56M	597.00K	-5.89M

Orchard Funding Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 56.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ORCH, the sentiment is Neutral. The current price of 56.5 is below the 20-day moving average (MA) of 59.30, above the 50-day MA of 48.52, and above the 200-day MA of 32.80, indicating a neutral trend. The MACD of 2.51 indicates Positive momentum. The RSI at 51.85 is Neutral, neither overbought nor oversold. The STOCH value of 18.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:ORCH.

Orchard Funding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ORCH	74 Outperform	£12.07M	5.23	11.96%	1.77%	17.87%	52.54%
TIME	74 Outperform	£57.36M	10.73	7.96%	―	21.71%	31.07%
Sector *	67 Neutral	$16.77B	11.73	9.77%	3.75%	12.07%	-8.28%
BANK		£27.21M	―	-147.16%	―	―	―
LEND	49 Neutral	£2.72M	―	-1088.89%	―	31.87%	―
ZAIM		£2.31M	―		―	―	―
DFCH	76 Outperform	£67.95M	5.33	13.00%	―	26.02%	340.22%

Orchard Funding Corporate Events

Orchard Funding Group PLC Alters Financial Year End and Appoints New Auditor

Orchard Funding Group PLC has announced a change in its financial year end from 31 July to 31 January, effective immediately, to streamline operations. Additionally, the company has appointed Macalvins Limited as its new auditor for the 18-month period ending 31 January 2026, following their completion of the audit for Orchard Bond Finance PLC for the year ended 31 July 2024.

Orchard Funding Expects FY2025 Earnings to Surpass Market Expectations

Orchard Funding Group PLC has reported positive trading results for the fiscal year ending July 2025, driven by growth in the insurance premium finance market and benefiting from reduced base interest rates. The company expects earnings to exceed market expectations by over 20%, highlighting its focus on controlled growth and strengthening its core and adjacent markets.