Orchard Funding toppled 13% as it warned it is mulling dropping its listing on AIM and would halt dividend payments.
Legal and regulatory requirements plus associated costs of admission; low levels of liquidity and its inability to attract institutions given the material discount to net asset value (NAV), were all reasons cited for dropping the AIM listing.
“The board believes it is in the company's best interests to cease payment of dividends for the current financial year,” added the brief statement from the specialist insurance products group, which added "the capital retained can be used to make, if appropriate, an acceptable tender offer to shareholders in the future" and give it strategic flexibility.
Earlier this year, Orchard took a £500,000 provision after a fraudulent introducer put fake agreements into its system using someone else’s identity.
Orchard also warned it had been affected by the Financial Conduct Authority (FCA) review into guaranteed asset protection (GAP), one of its key insurance niches.
Shares fell 4p to 26p.