LINUS Digital Finance achieves growth objectives and adjusts strategy to return to profitability in short-term
- Around 50% revenue growth in the first half of 2022
- Macroeconomic environment causes withdrawal of guidance for 2022 financial year
- Adjustment of corporate strategy to return to profitability in short-term
Berlin, 2 August 2022 – In the first half year of 2022, Linus Digital Finance AG (LINUS), the listed real estate fintech from Berlin, confirmed its planned growth trajectory despite the difficult market environment and generated revenues of EUR 5.4 million. This corresponds to growth of 50.4 % compared to the same period last year (EUR 3.6 million in H1/2021). The investment volume was EUR 218 million compared to EUR 154.4 million in H1/2021 (+ 41.2 %). The number of qualified users was increased by 1,120. Qualified users have been identified by LINUS as semi- professional or professional investors and have indicated their interest to co-invest alongside LINUS. Despite the strong growth, the Management Board believes that due to the uncertainties in the macroeconomic environment, it is currently no longer feasible or quantifiable to reliably estimate the further course of business. Therefore, the guidance for the current 2022 financial year, which was originally published on 29 April 2022 with the annual report for the 2021 financial year, has been withdrawn.
"We were able to build on the strong growth of the previous year in a difficult environment and were able to increase our turnover by more than 50 %. We are very proud of this result, but we also see that caution is required with regards to short- term guidance in view of the uncertainties in the markets," comments Frederic Olbert, CFO of LINUS.
LINUS’ business is currently significantly influenced by the macroeconomic environment, in particular the uncertainties in the financing, capital and real estate markets, which at least indirectly reflect the impact of the Russian war of aggression on Ukraine. Considering this, LINUS has decided today to adjust its corporate strategy with the aim of returning to operational profitability in the short term. As a result, LINUS will reduce growth investments in online marketing, targeted at attracting new affluent private customers, for the time being in order to return to profitability in the short term. This would be a return to profitability mirroring the successful 2018 to 2020 financial years. In the near future, the focus will be on engaging with the approximately 2,700 existing qualified users and expanding the investor base among high net worth individuals (HNWI), family offices and institutional investors. In addition, LINUS' digital investment offering is to be made increasingly accessible to new private clients via B2B2C partnerships. LINUS has recently concluded several successful partnerships in this area. This strategic corporate decision is accompanied by a short-term adjustment of staff capacities. This socially acceptable reduction in the workforce affects 22 employees (corresponds to around 20 % of the total workforce), particularly in the marketing and sales departments.
"The last few months have been characterised by great uncertainty on the part of investors. This affects both the real estate and the stock markets. We also feel this among our shareholders and business partners," explains David Neuhoff, founder and CEO of LINUS. "With regard to new investments in real estate, more caution than ever is required in view of the massive change in the interest rate landscape. At the same time, a market environment like this also offers many promising opportunities for alternative financiers like us due to the reduced liquidity in the financing markets. Therefore, we are cautiously optimistic overall."
Against this background, the Management Board expressly upholds the basic growth trajectory for the full year 2022 and expects growth in the low to high double-digit percentage range for revenue, investment volume, co-investment volume and the number of qualified users. In addition, the Management Board intends to return to profitability significantly earlier. With this focus on a short-term return to profitability, LINUS sees itself well positioned for the coming market phase.
About LINUS Digital Finance:
Berlin-based Linus Digital Finance AG finances real estate projects with debt and mezzanine capital through a private debt fund which it manages, enabling semi- professional and professional as well as institutional investors to participate in these in these short- to medium-term investments through its digital platform. In addition to these private debt investment solutions, LINUS also brokers long-term equity investments in existing properties with regular distributions as well as access to long-term investments in institutional real estate funds of renowned asset managers via its investment platform. As a seed investor, LINUS remains involved in all investments with its own funds until the end of the investment term.
Together with its co-investors, LINUS’ funds invested more than EUR 1.2 billion in 65 real estate projects since its inception in 2016 (as of July 2022). Linus Capital Management GmbH, a subsidiary of Linus Digital Finance AG, is registered with the German Federal Financial Supervisory Authority (BaFin) as a financial investment management company (Kapitalverwaltungsgesellschaft - KVG).
Linus Digital Finance AG is listed on the regulated market (General Standard) of the Frankfurt Stock Exchange. Linus Capital Ltd. is the UK subsidiary of Linus Digital Finance AG and an Appointed Representative of Infinity Asset Management LLP, which is authorised and regulated by the Financial Conduct Authority (FCA).
LINUS Digital Finance
Chief Financial Officer Alexanderstraße 7, 10178 Berlin [email protected]
+49 (0) 30 629 3968 10
E-Mail: [email protected] Telefon: +49 30 726276-1544