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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Trufin Plc | LSE:TRU | London | Ordinary Share | JE00BYVWJZ03 | ORD 91P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-4.50 | -5.26% | 81.00 | 81.00 | 83.00 | 85.50 | 82.00 | 85.50 | 103,428 | 16:35:10 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Personal Credit Institutions | 16.12M | -6.64M | -0.0627 | -13.08 | 86.79M |
TIDMTRU TIDMTRU
RNS Number : 0830O
TruFin PLC
29 September 2023
29 September 2023
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries "TruFin Group" or the "Group")
Interim Financial Report for the six months ended 30 June 2023 (Unaudited)
-- Combined gross revenue for the Group increased 35% to GBP8.5m (H1 2022: GBP6.3m)
-- Gross revenue at Oxygen Finance Group Limited (together with its subsidiaries) ("Oxygen") increased by 8% to GBP2.7m (H1 2022: GBP2.5m), driven by growth in its core UK Early Payments market. EBITDA was flat at GBP0.3m as Oxygen executed a targeted investment program focused on maximising the revenue potential embedded in its client base
-- Gross revenue at Satago Financial Solutions Limited ("Satago") increased 180% to GBP1.7m (H1 2022: GBP0.6m) with strong growth in subscription services and invoice financing facilities
-- Playstack Ltd ("Playstack") recorded 7% revenue growth to GBP2.5m (H1 2022: GBP2.3m), with the highly anticipated launch of The Last Faith on track for a Q4 release
-- Gross revenue at Vertus Capital Limited ("Vertus") increased 67% to GBP1.5m (H1 2022: GBP0.9m), driven by new facilities, interest rate rises and early settlements
-- TruFin Group's EBITDA loss improved 12% to GBP3.8m (H1 2022: GBP4.3m)
-- TruFin Group's loss before tax was GBP6.2m (H1 2022: GBP4.8m) as a result of a one-off net impairment loss of GBP1.3m on goodwill (due to the anticipated sale of TruFin's stake in Vertus) plus a depreciation and amortisation charge of GBP1.2m (H1 2022: GBP0.5m)
6 months to 6 months to 12 months to 30 June 30 June 31 December 2023 2022 2022* Financials and KPI's (Unaudited) GBP'000 GBP'000 GBP'000 Gross Revenue 8,497 6,281 16,119 EBITDA (3,786) (4,320) (6,425) Loss before tax (6,220) (4,795) (8,020) Net Assets 34,228 42,419 40,104 *Audited figures
Key milestones during the period:
-- Approximately 30% of Oxygen's EP clients purchased two or more products during the period (H1 2022: c15%)
-- Migration of existing Lloyds Banking Group's factoring clients onto the platform has started with the remainder of the factoring book expected to be materially progressed during 2024
-- Following the success of its Mortal Shell game, which has sold more than one million units, Playstack signed an agreement to develop and licence Mortal Shell 2 and Mortal Shell 3
-- Successful Placing and Open Offer raising GBP7.6m before expenses, enabling Playstack to secure the Mortal Shell franchise and provide the Group with additional working capital
Key milestones post period end:
-- Satago has today signed a Letter of Intent with a UK challenger bank - covering the adoption of Satago's LaaS solution. This will enable the Challenger Bank to offer invoice financing to its customers and to simplify and automate internal processes
-- To build on Satago's platform launch with Lloyds Banking Group and execute on the significant opportunities ahead, Satago has today agreed a GBP4m Convertible Loan Note ("CLN") with existing shareholders
-- Playstack signed a new, multi-year partnership with a major technology platform for more than $2m to develop a series of sequel games based on existing published IP. In addition, Playstack's proprietary discovery technology has sourced four new titles for release throughout 2024
-- TruFin received and conditionally accepted a non-binding cash offer for its shares in Vertus. Due diligence and contract negotiations are ongoing and, if successful, the deal is expected to complete before year end. If completed, TruFin expects to receive cash proceeds of approximately GBP3.2m
James van den Bergh, Chief Executive Officer commented:
"We have made positive progress during 2023, with growth across the Group. It was pleasing to successfully conclude TruFin's fundraise in June 2023, and I would like to personally thank shareholders for their ongoing support. The fundraise has enabled targeted additional investment in Playstack, Oxygen and Satago which the Board believes will maximise the equity value of these businesses for shareholders.
The proceeds allowed Playstack to enter into an agreement to develop and licence further games in the Mortal Shell franchise - an exceptional series that the whole team is excited to work on. Playstack's signing of a further multi-million-dollar, multi-year partnership to develop a series of sequel games based on existing published IP is further testament to the momentum within the business.
The fundraise has also allowed us to participate in Satago's CLN. Already delivering on its next generation lending platform for Lloyds Banking Group, today's announcement of the signing of a Letter of Intent with a UK Challenger Bank marks a big moment in Satago's development. Having shifted focus from a lending business to a software business, Satago will soon be a tech player with multiple enterprise customers, forward-thinking and united in a desire to offer SMEs a fully digitised end-to-end proposition. In so doing they are helping SMEs unlock their potential in the face of economic uncertainty.
As we look to reveal the full value embedded within Oxygen, we have made various tactical investments to make the company as attractive as possible to the largest number of potential acquirers. The value Oxygen adds to its customer base cannot be underestimated, and its cross-selling opportunities remain significant.
TruFin is very well positioned, and the Board looks to the future with excitement."
For further information, please contact:
TruFin plc James van den Bergh, Chief Executive Officer 0203 743 1340 Kam Bansil, Investor Relations 07779 229508 Liberum Capital Limited (Nominated Adviser and Corporate broker) Chris Clarke Edward Thomas 0203 100 2000
TruFin plc is the holding company of an operating group comprising four growth-focused technology businesses operating in niche markets: early payment provision, invoice finance, IFA finance and mobile games publishing. The Company was admitted to AIM in February 2018 and trades under the ticker symbol: TRU. More information is available on the Company website: www.TruFin.com
Chief Executive's Statement
Oxygen
Oxygen's position as a financial technology company delivering social value strengthened significantly during H1 2023.
Gross revenue at Oxygen increased by 8% to GBP2.7m (H1 2022: GBP2.5m). Oxygen's core Early Payments ("EP") revenue grew 20% to GBP1.8m (H1 2022: GBP1.5m) whilst other revenue predominantly comprising of Software as a Service ("SaaS") and partnership revenues was flat at GBP0.9m.
Momentum within Oxygen's EP market continues to build, with combined supplier spend totalling GBP24bn at the end of June 2023, up 9.4% from 30 June 2022.
An unprecedented number of clients' suppliers participated in EP programmes in H1 2023, with on-boarded annual supplier spend exceeding GBP1.2bn across 4,600 suppliers, growth of 20% over H1 2022. A record amount of new supplier spend, GBP201m, was also added during H1 2023, an increase of 22% over H1 2022.
Transacted spend attracting an early payment discount reached GBP468m in H1 2023, up 12% versus H1 2022. Total rebates generated were GBP5.1m in H1 2023, up 20% on H1 2022.
Oxygen's entrenchment into client procurement activity is illustrated by the continuing growth of its "Freepay" initiative. This sees Oxygen help clients deliver social value to their local communities by enabling them to pay local micro and small suppliers early, at no cost. By the end of June 2023 more than 11,000 suppliers were participating in this programme (up from 6,000 as at end June 2022). These local micro and small suppliers enjoyed early invoice payments totalling GBP275m, without charge, during the first six months of the year.
SaaS H1 revenues were flat at GBP0.7m, despite some irrational competitor pricing potentially prompted by financial strain. Oxygen's management believes this may lead to consolidation in the marketplace. Oxygen remains the market leader, unrivalled in its knowledge of local authority procurement and trusted partner status. Approximately 30% of Oxygen's Early Payments clients purchased two or more products during the period (H1 2022: circa 15%).
Partnership revenues which relate to third party products sold into Oxygen's client base grew strongly to GBP134,000 (H1 2022: GBP7,000). This highlights the strength of Oxygen's client relationships and distribution capabilities and has significant growth potential.
To fully exploit its dominant market position and client pipeline, Oxygen invested in its technology and people and continued to opt for higher revenue gain share over up-front fees, benefitting outer-year revenue. These targeted initiatives have supressed the 2023 year-on-year revenue growth rate, and added GBP0.2m of cost, temporarily supressing EBITDA growth. However, they are anticipated to benefit both revenue and profit in 2024 and beyond.
Satago
Satago offers its customers technically advanced invoice finance and cashflow management systems via its online software platform.
Satago is continuing its transition from predominantly self-funding its balance sheet to a hybrid model incorporating "partner balance sheet financing" which utilises Satago's lending-as-a-service ("LaaS") solutions and embedded finance model. This strategy remains anchored by the company's five-year commercial agreement and partnership with Lloyds Banking Group, and its strategic partnership with Sage to offer embedded finance in a number of Sage products.
During the period, Satago migrated a small set of Lloyds Banking Group's factoring clients onto the platform. Large scale migration is now due to begin in 2024; with migration anticipated to be materially progressed during 2024. Platform functionality for onboarding new clients and supporting the Sage50 embedded finance customers remains the primary focus in Q4 2023.
Satago more than doubled revenues in the first half of the year to GBP1.7m (H1 2022: GBP0.6m), driven by LaaS income and increases in interest and fee income (GBP605,000 versus GBP252,000 in H1 2022) as it builds on its existing partnerships while growing its invoice financing capabilities.
Subscription numbers with one of Satago's existing strategic technology partners continue to grow strongly, with active subscriptions increasing 134% to 640 over the same period in 2022 (H1 2022: 273). Based on the success of this year's UK and Irish roll out, Satago and its strategic partner have agreed, subject to contract, to roll out the same offering in the US and Canada in H1 2024.
Satago has recently extended its GBP5m facility with a specialist niche funder to GBP7m, in order to continue its expansion plans. The facility is currently GBP5.7m drawn.
Playstack
Playstack is a gaming technology business providing publishing and related services to the mobile game and console sector. Playstack is the Group's entry point into the highly attractive growth market of video game publishing.
Playstack continues to target positive EBITDA and operating cash generation in 2023.
Playstack has continued to track to its three-year commercial plan and expects to deliver significant growth from 2022 through to 2024 and beyond. During the period, the Group signed an agreement to develop Mortal Shell 2 and 3 following the success of Mortal Shell which has sold over one million copies. The securing of the Mortal Shell franchise has generated real excitement across the gaming landscape and provided Playstack a multi-year release programme.
Additionally, through valuable platform and technology partnerships, Playstack has been able to deliver valuable revenue visibility ahead of games launches, de-risking development spend.
Playstack continues to develop its own innovative technology suite that sets it apart from market rivals.
Vertus
Vertus provides succession finance to Independent Financial Advisers ("IFAs"). The business originates deals through its collaboration with IntegraFin Holdings plc ("IntegraFin") and various business brokers focused on the IFA market.
Given the increase in cost of debt and equity capital, the deal market has softened during 2023. However significant consolidation persists as Financial Planners continue to retire from the industry, pressured by age and regulation (consumer duty being the most recent regulatory driver).
Private Equity-backed consolidators proliferate and continue to drive high valuations and significant deal activity with aggressive integration strategies. In contrast, Vertus funds a succession process that ensures planning firms can remain independent and meet client demand for quality and bespoke advice.
The loan book continues to perform well, with the value of the underlying security increasing as Vertus' borrowers retain and grow their client bases. The combination of higher interest rates and suppressed equity and bond markets has put downward pressure on ad valorem recurring revenue for firms, which has introduced early signs of stress on the profitability of firms. Furthermore, competition with yields on cash and the impact of inflation on household budgets has reduced new inflows. Despite this, borrowers are managing the environment well and Vertus remains without credit losses since inception.
The increasing interest rate environment has precipitated some early settlements for Vertus, which has helped early settlement charge profitability, whilst hampering growth in the loan book. Despite the increase in these settlements, Vertus is aiming to end 2023 with a loan book of GBP24m (31 December 2022: GBP21.9m).
Vertus is developing further capital products to enable independent succession in the UK IFA market and has good prospects for the future.
Post period end developments and outlook
Oxygen
Oxygen's core EP revenue maintained strong organic growth, with EP revenues to the end of August up by 22% year-on-year.
Seven of the eight EP client contracts due to expire in FY23 have already been re-signed or had renewal confirmed, for multi-year periods.
Additionally, three new EP client contracts were signed by the end of August 2023, with an exceptionally strong pipeline expected to deliver a record number of new clients in 2023. The Board is confident of continued and significant financial progress in 2024 and beyond.
Partnerships continue to develop. Oxygen anticipates these will contribute more than GBP0.25m to full year revenues, from reselling services and referral fees. Seventeen EP clients now purchase one or more additional service from Oxygen.
The turmoil of the Covid pandemic has now passed with record numbers of attendees at the various local government conferences that Oxygen attends and hosts annually, enabling Oxygen to build its client prospect pipeline.
The normalisation of remote working post-Covid continues to benefit Oxygen, with ongoing efficiencies achieved particularly with new client implementation. Moreover, councils in England alone are expected to increase procurement expenditure to GBP74bn in 2023, up 4% over 2022. These favourable tailwinds, coupled with rising interest rates and inflation, make Oxygen's supply side offer even more compelling.
Satago
Full client migration of Lloyds Banking Group's factoring clients is set to be materially progressed during 2024.
In addition, platform functionality for onboarding clients and supporting the Bank's embedded finance customers within Sage50 is anticipated to be delivered in November 2023.
Building on this success, today Satago is pleased to announce that it has signed a Letter of Intent with a UK Challenger Bank ("Challenger Bank"), covering the adoption of Satago's LaaS solution. This will enable the Challenger Bank to offer invoice financing to its customers and to simplify and automate internal processes.
This Letter of Intent demonstrates the ongoing demand for the compelling product which Satago has built and further solidifies Satago's place as a Critical Integration Platform for incumbent Banks globally. Conversations are ongoing with multiple strategic partners in other territories.
To build on Satago's successful Platform launch with Lloyds Banking Group and execute on the significant opportunities ahead, Satago has today agreed GBP4m CLN from existing shareholders. TruFin is investing GBP3m via the CLN which will earn interest of 15% per annum and convert to common equity at a material discount to the price of a future equity fund raise completed by Satago.
Playstack
Playstack's two new PC and console releases - AK-Xolotl and The Last Faith - combined with the securing of further platform deals are key to delivery of revenues for the current year.
AK-Xolotl launched on 14 September to strong critical acclaim, performing in-line with expectations. AK-Xolotl has been released across PC, Xbox 1, Xbox Series S/X, PlayStation 4, PlayStation 5 and Nintendo Switch. This was Playstack's first simultaneous release across six platforms and is testament to the business's strong operational capability.
The Last Faith is slated for release in November 2023 and is enjoying strong wish-list momentum following the release of a new playable demo.
During September Playstack secured a new multi-million-dollar, multi-year partnership with a major technology platform to develop a series of sequel games based on existing published IP. This contract underpins Playstack's ambition to sequel high quality existing IP via a fully funded model.
Playstack's proprietary discovery technology has sourced several high potential games, including four new titles for release throughout 2024 with more in the pipeline.
Vertus
In August 2023 the TruFin board received and conditionally accepted a non-binding cash offer for its shares in Vertus. Due diligence and contract negotiations are ongoing and, if successful, the deal is expected to complete before year end.
Vertus has originated new facilities of GBP4m and the pipeline is experiencing increased volumes. The company's loan book is forecast to grow to GBP24m (from GBP21.9m as at 31 December 2022). Loan book growth has been largely offset by an increase in early settlements as borrowers seek to pay down debt subject to higher interest rates.
The subsidiaries within the TruFin Group have been resilient in the first six months of 2023 and the board remains confident regarding prospects for the remainder of 2023.
As at 31 August 2023, the following assets were not less than:
-- GBP7.8m of cash or cash equivalents -- GBP6.9m of assets within the Satago Group's loan book
The TruFin Group has no more than GBP2.4m in net near-term liabilities.
UNAUDITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months Year ended ended ended 31 December 2022 Notes 30 June 2023 30 June (Audited) 2022 (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ======================================= ======= ============== ============= ============ Interest income 3 2,093 1,003 2,619 Fee income 3 3,930 2,955 7,183 Publishing income 3 2,474 2,323 6,317 Gross revenue 3 8,497 6,281 16,119 -------------- ------------- ------------ Interest, fee and publishing expenses (2,564) (1,947) (5,075) -------------- ------------- ------------ Net revenue 5,933 4,334 11,044 ============== ============= ============ Staff costs 5 (6,737) (6,433) (12,609) Other operating expenses (2,922) (2,215) (4,810) Depreciation & amortisation (1,171) (479) (1,596) Net impairment loss on financial assets (69) (6) (50) Impairment of goodwill 9 (1,250) - - Share of (loss)/profit from associates (4) 4 1 -------------- ------------- ------------ Loss before tax (6,220) (4,795) (8,020) ============== ============= ============ Taxation 8 241 230 1,214 -------------- ------------- ------------ Loss for the period/year (5,979) (4,565) (6,806) ============== ============= ============ Other comprehensive income Items that may be reclassified subsequently to profit and loss Exchange differences on translating foreign operations 103 9 (65) Other comprehensive income for the period/year, net of tax 103 9 (65) ============== ============= ============ Total comprehensive loss for the period/year (5,876) (4,556) (6,871) ============== ============= ============ Loss after tax attributable to: Owners of TruFin plc (5,995) (3,716) (6,637) Non-controlling interests 16 (849) (169) -------------- ------------- ------------ (5,979) (4,565) (6,806) ============== ============= ============ Total comprehensive loss for the period/year attributable to: Owners of TruFin plc (5,894) (3,706) (6,704) Non-controlling interests 18 (850) (167) (5,876) (4,556) (6,871) ============== ============= ============ Earnings per share 6 months 6 months Year ended ended ended 31 December 2022 Notes 30 June 2023 30 June (Audited) 2022 (Unaudited) (Unaudited) Pence pence pence ====================== ======= ============== ============= ============ Basic and Diluted EPS 14 (6.4) (4.3) (7.3)
UNAUDITED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at As at 31 Notes 30 June 2023 December 2022 GBP'000 GBP'000 (Unaudited) (Audited) ================================= ======= ============== =========== Assets Non-current assets Intangible assets 9 23,718 24,411 Property, plant and equipment 10 320 345 Deferred tax asset 8 165 250 Loans and advances 11 15,955 15,016 -------------- ----------- Total non-current assets 40,158 40,022 ============== =========== Current assets Cash and cash equivalents 4,993 10,273 Loans and advances 11 10,615 9,145 Interest in associate - 4 Trade receivables 1,777 2,149 Other receivables 4,891 3,899 -------------- ----------- Total current assets 22,276 25,470 ============== =========== Total assets 62,434 65,492 ============== =========== Equity and liabilities Equity Issued share capital 12 85,706 85,706 Retained earnings (30,879) (24,884) Foreign exchange reserve 38 (63) Other reserves (26,531) (26,531) -------------- ----------- Equity attributable to owners of the company 28,334 34,228 -------------- ----------- Non-controlling interest 5,894 5,876 -------------- ----------- Total equity 34,228 40,104 ============== =========== Liabilities Non-current liabilities Borrowings 13 15,688 16,764 -------------- ----------- Total non-current liabilities 15,688 16,764 ============== =========== Current liabilities Borrowings 13 5,449 1,783 Trade and other payables 7,069 6,841 Total current liabilities 12,518 8,624 -------------- =========== Total liabilities 28,206 25,388 ============== =========== Total equity and liabilities 62,434 65,492 ============== ===========
The financial statements were approved by the Board of Directors on 28 September 2023 and were signed on its behalf by:
James van den Bergh
Chief Executive Officer
UNAUDITED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
Foreign Non- Share Retained exchange Other controlling Total capital earnings reserve reserves Total interest equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------- -------- --------- --------- --------- -------- ------------ -------- Balance at 1 January 2023 85,706 (24,884) (63) (26,531) 34,228 5,876 40,104 Loss for the period - (5,995) - - (5,995) 16 (5,979) Other comprehensive income for the period - - 101 - 101 2 103 Total comprehensive loss for the period - (5,995) 101 - (5,894) 18 (5,876) -------- --------- --------- --------- -------- ------------ -------- Balance at 30 June 2023 (Unaudited) 85,706 (30,879) 38 (26,531) 28,334 5,894 34,228 ======== ========= ========= ========= ======== ============ ======== Balance at 1 January 2022 73,548 (17,731) 4 (24,393) 31,428 1,023 32,451 Loss for the period - (3,716) - - (3,716) (849) (4,565) Other comprehensive income for the period - - 10 - 10 (1) 9 ------ Total comprehensive loss for the period - (3,716) 10 - (3,706) (850) (4,556) ------ -------- -------- ------- ----- ------- Issuance of shares 12,158 (496) - (2,138) 9,524 - 9,524 Issuance of shares to subsidiary - - - - - 5,000 5,000 Balance at 30 June 2022 (Unaudited) 85,706 (21,943) 14 (26,531) 37,246 5,173 42,419 ====== ======== ======== ======= ===== =======
UNAUDITED CONDENSED INTERIM STATEMENT OF CASH FLOWS
6 months 6 months Year ended ended ended 31 December 2022 Notes 30 June 30 June (Audited) 2023 2022 (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ========================================== ======= ============= ============= ============ Cash flows from operating activities Loss before tax (6,220) (4,795) (8,020) Adjustments for Depreciation of property, plant and equipment 55 55 108 Amortisation of intangible fixed assets 1,637 822 2,377 Impairment of intangible assets 1,250 - - Finance costs 820 384 974 Share of loss/(profit) from associates 4 (4) (1) (2,454) (3,538) (4,562) Working capital adjustments Movements in loans and advances (2,408) (5,744) (8,029) (Increase)/decrease in trade and other receivables (415) 566 (34) Increase/(decrease) in trade and other payables 511 (1,511) 60 Net payables on acquisition of subsidiary - (76) (67) (2,312) (6,765) (8,070) Tax credit received/(paid) 88 (4) 668 Interest and finance costs paid (686) (308) (777) ------------- ------------- ------------ Net cash used in operating activities (5,364) (10,615) (12,741) ============= ============= ============ Cash flows from investing activities: Additions to intangible assets (2,204) (1,054) (3,159) Additions to property, plant and equipment (28) (72) (113) Acquisition of subsidiaries (157) (1,234) (1,217) Cash on acquisition of subsidiary - 19 19 Net cash used in investing activities (2,389) (2,341) (4,470) Cash flows from financing activities: Issue of ordinary share capital - 9,524 9,524 Issue of ordinary share capital of subsidiary - 5,000 5,000 Net borrowings 13 2,471 3,744 5,370 Lease payments (42) (27) (28) Net cash generated from financing activities 2,429 18,241 19,866 ------------- ------------- ------------ Net (decrease)/increase in cash and cash equivalents (5,324) 5,285 2,655 ------------- ------------- ------------ Cash and cash equivalents at beginning of the period/year 10,273 7,608 7,608 Effect of foreign exchange rate changes 44 12 10 ------------- ------------- ------------ Cash and cash equivalents at end of the period/year 4,993 12,905 10,273 ============= ============= ============
NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting policies
Basis of preparation
The annual financial statements of TruFin plc are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS").
The condensed set of financial statements included in this Interim Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34'). This condensed set of Financial Statements has been prepared by applying the accounting policies and presentation that were applied in the preparation of the TruFin Group's published Financial Statements for the year ended 31 December 2022.
The condensed set of financial statements included in this Interim Financial Report for the six months ended 30 June 2023 should be read in conjunction with the annual audited financial statements of TruFin plc for the year ended 31 December 2022, which were delivered to the Jersey Financial Services Commission. The audit report for these accounts was unqualified and did not draw attention to any matters by way of emphasis.
Going concern
The Directors are satisfied that the TruFin Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of the report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.
Group information
The TruFin Group ("the Group") is the consolidation of;
-- TruFin plc, -- TruFin Holdings Limited,
-- Oxygen Finance Group Limited, Oxygen Finance Limited and Oxygen Finance Americas Inc., together the ("Oxygen Group"),
-- TruFin Software Limited,
-- Satago Financial Solutions Limited, Satago SPV 1 Limited, Satago SPV 2 Limited, Satago Financial Solutions z.o.o, together ("Satago"),
-- AltLending (UK) Ltd, -- Vertus Capital Limited and Vertus SPV 1 Limited, together ("Vertus"), and
-- Playstack Limited, Bandana Media Ltd, Playignite Ltd, Playstack z.o.o, Playstack OY, Foxglove Studios AB, Magic Fuel Games Inc, Playstack Inc and Playignite Inc, together the ("Playstack Group").
Additionally, the Playstack Group also includes two associate companies incorporated in the UK which have been accounted for using the equity method. These are;
-- A 49% interest in Snackbox Games Ltd, and -- A 26% interest in Stormchaser Games Ltd.
On 13 March 2023, the Group disposed of its 49% interest in one associate company, PlayFinder Games Ltd.
On 18 April 2023, Military Games International Limited, a company in which the Group had a 42% interest was dissolved.
The principal activities of the Group are the provision of niche lending, early payment services and mobile game publishing.
The financial statements are presented in Pounds Sterling, which is the currency of the primary economic environment in which the Group operates. Amounts are rounded to the nearest thousand.
Significant accounting policies and use of estimates and judgements
The preparation of interim consolidated financial statements in compliance with IAS 34 requires the use of certain critical accounting judgements and key sources of estimation uncertainty. It also requires the exercise of judgement in applying the TruFin Group's accounting policies. There have been no material revisions to the nature and the assumptions used in estimating amounts reported in the annual audited financial statements of TruFin plc for the year ended 31 December 2022.
The accounting policies, presentation and methods of computation in the audited financial statements have been followed in the condensed set of financial statements.
2. General information
TruFin plc is a public limited company incorporated in Jersey. The shares of the Company are listed on the Alternative Investment Market. The address of the registered office is 26 New Street, St Helier, Jersey, JE2 3RA.
A copy of this Interim Financial Report including Condensed Financial Statements for the period ended 30 June 2023 is available at the Company's registered office and on the Company's investor relations website (www.trufin.com).
3. Gross revenue 6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ======================== ============== ============== ============ Interest income 2,093 1,003 2,619 -------------- -------------- ------------ Total interest income 2,093 1,003 2,619 -------------- -------------- ------------ EPPS* contracts 1,939 1,519 3,335 Consultancy fees 135 247 597 Implementation fees 1,015 412 1,644 Subscription fees 841 777 1,607 -------------- -------------- ------------ Total fee income 3,930 2,955 7,183 -------------- -------------- ------------ IAP revenue 80 207 342 Advertising revenue 78 299 453 Console revenue 2,316 1,816 5,521 Brand revenue - 1 1 -------------- -------------- ------------ Total publishing income 2,474 2,323 6,317 -------------- -------------- ------------ Gross revenue 8,497 6,281 16,119 ============== ============== ============
*Early Payment Programme Services
4. Segmental reporting
The results of the Group are broken down into segments based on the products and services from which it derives its revenue:
Short term finance:
Provision of invoice factoring and succession financing for the IFA space. For results during the reporting period, this corresponds to the results of Satago, Vertus and AltLending.
Payment services:
Provision of Early Payment Programme Services. For results during the reporting period, this corresponds to the results of the Oxygen Group.
Publishing:
Publishing of video games. For results during the reporting period, this corresponds to the results of the Playstack Group.
Other:
Revenue and costs arising from investment activities. For results during the reporting period, this corresponds to the results of TruFin Software Limited, TruFin Holdings Limited and TruFin plc.
The results of each segment, prepared using accounting policies consistent with those of the Group as a whole, are as follows:
Short term Payment finance services 6 months ended 30 June 2023 GBP'000 GBP'000 Publishing Other Total (Unaudited) GBP'000 GBP'000 GBP'000 ============================== =========== ========= ============ ========== ========== Gross revenue 3,241 2,748 2,490 18 8,497 Cost of sales (908) (521) (1,135) - (2,564) ----------- --------- ------------ ---------- ---------- Net revenue 2,333 2,227 1,355 18 5,933 ----------- --------- ------------ ---------- ---------- Loss before tax (3,256) (493) (1,378) (1,093) (6,220) Taxation (85) 104 222 - 241 Loss for the period (3,341) (389) (1,156) (1,093) (5,979) =========== ========= ============ ========== ========== Total assets 33,279 7,892 20,781 482 62,434 Total liabilities (22,161) (1,816) (3,532) (697) (28,206) ----------- --------- ------------ ---------- ---------- Net assets 11,118 6,076 17,249 (215) 34,228 ----------- --------- ------------ ---------- ---------- Short term Payment finance services 6 months ended 30 June 2022 GBP'000 GBP'000 Publishing Other Total (Unaudited) GBP'000 GBP'000 GBP'000 ============================== =========== ========= ============ ========== ========== Gross revenue 1,491 2,467 2,323 - 6,281 Cost of sales (441) (398) (1,108) - (1,947) ----------- --------- ------------ ---------- ---------- Net revenue 1,050 2,069 1,215 - 4,334 ----------- --------- ------------ ---------- ---------- Loss before tax (2,298) (232) (1,085) (1,180) (4,795) Taxation (1) - 231 - 230 Loss for the period (2,299) (232) (854) (1,180) (4,565) =========== ========= ============ ========== ========== Total assets 30,837 8,208 19,406 6,039 64,490 Total liabilities (16,907) (1,859) (2,572) (733) (22,071) ----------- --------- ------------ ---------- ---------- Net assets 13,930 6,349 16,834 5,306 42,419 ----------- --------- ------------ ---------- ----------
*adjusted loss before tax excludes share-based payment expense
Short term Payment finance services Year ended 31 December 2022 GBP'000 GBP'000 Publishing Other Total (Audited) GBP'000 GBP'000 GBP'000 ============================== =========== ========= ============ ========== ========== Gross revenue 4,469 5,311 6,330 9 16,119 Cost of sales (1,153) (889) (3,033) - (5,075) ----------- --------- ------------ ---------- ---------- Net revenue 3,316 4,422 3,297 9 11,044 ----------- --------- ------------ ---------- ---------- Loss before tax (3,879) (220) (1,569) (2,352) (8,020) Taxation 218 395 601 - 1,214 Loss for the year (3,661) 175 (968) (2,352) (6,806) =========== ========= ============ ========== ========== Total assets 34,200 8,258 20,407 2,627 65,492 Total liabilities (19,747) (1,792) (2,911) (938) (25,388) ----------- --------- ------------ ---------- ---------- Net assets 14,453 6,466 17,496 1,689 40,104 ----------- --------- ------------ ---------- ----------
*adjusted loss before tax excludes share-based payment expense
5. Staff costs
Analysis of staff costs:
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ============================================== ============== ============== ============ Wages and salaries 5,392 5,269 10,365 Consulting costs 452 193 379 Social security costs 662 744 1,411 Pension costs arising on defined contribution schemes 231 227 454 6,737 6,433 12,609 ============== ============== ============
Consulting costs are recognised within staff costs where the work performed would otherwise have been performed by employees. Consulting costs arising from the performance of other services are included within other operating expenses.
Average monthly number of persons (including Executive Directors) employed:
6 months 6 months Year ended ended ended 30 June 31 December 2022 2022 30 June 2023 (Unaudited) (Audited) (Unaudited) Number Number Number ================== ============== ============== ============ Management 16 18 17 Finance 8 11 10 Sales & marketing 43 34 30 Operations 57 50 78 Technology 60 54 43 -------------- -------------- ------------ 184 167 178 ============== ============== ============
Directors' emoluments
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ====================== ============== ============== ============ Combined remuneration 376 376 715 6. Employee share-based payment transactions
The employment share-based payment charge comprises:
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ====================================== ============== ============== ============ Performance Share Plan and Joint Share - - - Ownership Plan Founder Award Performance Share Plan Market Value - - - Award Performance Share Plan 2019 Award - - - Performance Share Plan 2018 Award - - - Total - - - ============== ============== ============
Performance Share Plan and Joint Share Ownership Plan Founder Award ("PSP and JSOP")
The final 25% of Founder Awards held by James van den Bergh vested on 22 February 2022 when the share price was GBP0.81. As a result, 395,558 shares subject to the Joint Share Ownership Plan became fully owned by the EBT and James' nil cost option under the Performance Share Plan vested in respect of the same number of shares.
Performance Share Plan Market Value Award ("PSP Market Value")
On 21 February 2018, options to acquire 4,868,420 shares were granted to the senior management team. The vesting of this award is based on market--based performance conditions. The vesting of these awards is subject to the holder remaining an employee of the Company and the Company's share price achieving five distinct milestones - vesting at 20% each milestone. The exercise price of the awards at the time of grant was GBP1.90 per share. A Monte Carlo simulation was used to determine the fair value of these options. The model used an expected volatility of 10% and a risk free rate of 1.3%.
In order to reflect the impact of the demerger, the PSP Market Value Award was split into two:
-- Part of the award remained as an option in respect of TruFin plc shares ("TruFin Market Value Award")
-- Part of the award became an award in respect of DFC shares ("DFC market Value Award")
The TruFin Market Value Award is on the same terms as the original PSP Market Value Award except that:
-- The exercise price was adjusted to GBP0.85, and the share price milestones were adjusted to reflect the demerger
-- The exercise price was further adjusted to GBP0.80, and the share price milestones were further adjusted, to reflect the return of value to shareholders in June 2019
-- The exercise price was further adjusted to GBP0.71, and the share price milestones were further adjusted to reflect the return of value to shareholders in December 2019
The modification has not resulted in a change in the valuation of the award and this continues to be recognised over the remainder of the original vesting period.
Performance Share Plan 2018 Award ("PSP 2018")
The unvested performance condition of this award had not been met at the end of the vesting period.
Performance Share Plan 2019 Award ("PSP 2019")
The performance conditions had not been met at the end of the vesting period.
7. Loss before income tax
Loss before income tax is stated after charging:
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ==================================== ============== ============== ============ Depreciation of property, plant and equipment 55 55 108 Amortisation of intangible assets 1,637 822 2,377 Staff costs including share-based payments charge 6,737 6,433 12,609 8. Taxation
Analysis of tax credit/charge recognised in the period/year
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ==================== ============== ============== ============ Current tax credit (326) (230) (1,267) Deferred tax charge 85 - 53 -------------- -------------- ------------ Total tax credit (241) (230) (1,214) ============== ============== ============
Deferred tax asset
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 ======================================== ============== ============== ============ Balance at start of the period/year 250 303 303 Debit to the statement of comprehensive income (85) - (53) -------------- -------------- ------------ Balance at end of the period/year 165 303 250 ============== ============== ============ Comprised of:
Losses 165 303 250 -------------- -------------- ------------ Total deferred tax asset 165 303 250 ============== ============== ============
A deferred tax asset was recognised in 2021 in respect of Vertus Capital SPV 1 Limited, as it became profitable.
9. Intangible assets Software Separately Client contracts licences identifiable and similar intangible Goodwill Total assets assets GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ============================ ================== ============ ============= ========== ======= Cost At 1 January 2023 6,399 4,773 3,237 16,569 30,978 Additions 441 1,763 - - 2,204 Disposals (114) - - - (114) Exchange differences (1) (24) - - (25) ------------- At 30 June 2023 (unaudited) 6,725 6,512 3,237 16,569 33,043 ================== ============ ============= ========== ======= Amortisation At 1 January 2023 (2,496) (2,082) (1,581) - (6,159) Charge for the period (521) (792) (324) - (1,637) Disposals 114 - - - 114 Exchange differences - 15 - - 15 At 30 June 2023 (unaudited) (2,903) (2,859) (1,905) - (7,667) ================== ============ ============= ========== ======= Accumulated impairment losses At 1 January 2023 (408) - - - (408) Charge - - - (1,250) (1,250) ------------------ ------------ ------------- ---------- ------- At 30 June 2023 (unaudited) (408) - - (1,250) (1,658) ================== ============ ============= ========== ======= Net book value ------------------ ------------ ------------- ---------- ------- At 30 June 2023 (unaudited) 3,414 3,653 1,332 15,319 23,718 ------------------ ------------ ------------- ---------- ------- At 31 December 2022 3,495 2,691 1,656 16,569 24,411 ================== ============ ============= ========== ======= Software Separately Client contracts licences identifiable and similar intangible Goodwill Total assets assets GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ======================= ================== ============ ============= ========== ======= Cost At 1 January 2022 5,490 2,579 1,642 15,746 25,457 Additions 905 2,254 - - 3,159 On Acquisition - 3 1,595 823 2,421 Disposals - (75) - - (75) Exchange differences 4 12 - - 16 ------------- At 31 December 2022 6,399 4,773 3,237 16,569 30,978 ================== ============ ============= ========== ======= Amortisation At 1 January 2022 (1,607) (1,181) (1,070) - (3,858) Charge (889) (977) (511) - (2,377) Disposals - 75 - - 75 Exchange differences - 1 - - 1 At 31 December 2022 (2,496) (2,082) (1,581) - (6,159) ================== ============ ============= ========== ======= Accumulated impairment losses At 1 January 2022 (408) - - - (408) At 31 December 2022 (408) - - - (408) ================== ============ ============= ========== ======= Net book value ------------------ ------------ ------------- ---------- ------- At 31 December 2022 3,495 2,691 1,656 16,569 24,411 ------------------ ------------ ------------- ---------- ------- At 31 December 2021 3,475 1,398 572 15,746 21,191 ================== ============ ============= ========== =======
Client contracts comprise the directly attributable costs incurred at the beginning of an Early Payment Scheme Service contract to revise a client's existing payment systems and provide access to the Group's software and other intellectual property. These implementation costs are comprised primarily of employee costs.
The useful economic life for each individual asset is deemed to be the term of the underlying Client contract (generally 5 years) which has been deemed appropriate and for impairment review purposes, projected cash flows have been discounted over this period.
The amortisation charge is recognised in fee expenses within the statement of comprehensive income, as these costs are incurred directly through activities which generate fee income.
Software, licenses and similar assets comprises separately acquired software, as well as costs directly attributable to internally developed platforms across the Group. These directly attributable costs are associated with the production of identifiable and unique software products controlled by the Group and are probable of producing future economic benefits. They primarily include employee costs and directly attributable overheads.
A useful economic life of 3 to 5 years has been deemed appropriate and for impairment review purposes projected cash flows have been discounted over this period.
The amortisation charge is recognised in depreciation and amortisation on non-financial assets within the statement of comprehensive income.
Goodwill and "Separately identifiable intangible assets" arise from acquisitions made by the Group.
Vertus
In July 2019, the Group converted into ordinary shares its existing convertible loan with Vertus Capital in full satisfaction and discharge of the loan. This, together with a further cash payment, gave the Group 51% ownership of Vertus Capital and Vertus SPV 1.
Goodwill of GBP1,714,000 arose from this transaction and has been included within the short term finance segment of the business. In 2021, the Group increased its ownership of Vertus Capital from 51% to 53.8%, resulting in a GBP50,000 adjustment to Goodwill.
Separately identifiable intangible assets of GBP255,000 primarily related to the value of existing third party relationships on acquisition have been identified.
These are being amortised over 5 years and the amortisation charge for the year was GBP26,000 (2022: GBP51,000).
Net Book value of these assets at 30 June 2023 was GBP55,000 (2022: GBP81,000).
In August 2023, the Group accepted a non-binding offer for its shares in Vertus Capital. Following this, Goodwill related to this transaction has been impaired by GBP1,250,000.
Goodwill related to this transaction excluding Separately identifiable intangible assets at 30 June 2023 was GBP158,000 (2022: GBP1,408,000).
10. Property, plant and equipment Fixtures Computer Right-of-Use & equipment Asset Total fittings Group GBP'000 GBP'000 GBP'000 GBP'000 ===================== ========= ========== ============ ======= Cost At 1 January 2023 139 96 276 511 Additions 14 14 - 28 Exchange differences 1 (1) - - --------- ---------- ------------ ------- At 30 June 2023 154 109 276 539 --------- ---------- ------------ ------- Depreciation At 1 January 2023 (60) (61) (44) (165) Charge (15) (12) (28) (55) Exchange differences - 1 - 1 --------- ---------- ------------ ------- At 30 June 2023 (75) (72) (72) (219) --------- ---------- ------------ ------- Net book value --------- ---------- ------------ -------
At 30 June 2023 79 37 204 320 ========= ========== ============ ======= At 31 December 2022 79 34 232 345 ========= ========== ============ ======= Fixtures Computer Right-of-Use & equipment Asset Total fittings Group GBP'000 GBP'000 GBP'000 GBP'000 ==================== ========= ========== ============ ======= Cost At 1 January 2022 53 78 429 560 Additions 86 27 276 389 Disposals - (9) (429) (438) At 31 December 2022 139 96 276 511 --------- ---------- ------------ ------- Depreciation At 1 January 2022 (44) (44) (407) (495) Charge (16) (26) (66) (108) Disposals - 9 429 438 At 31 December 2022 (60) (62) (44) (166) --------- ---------- ------------ ------- Net book value --------- ---------- ------------ ------- At 31 December 2022 79 34 232 345 ========= ========== ============ ======= At 31 December 2021 9 34 22 65 ========= ========== ============ ======= 11. Loans and advances 30 June 2023 31 December 2022 (Unaudited) (Audited) GBP'000 GBP'000 ========================= ============= ============ Total loans and advances 26,714 24,215 Less: loss allowance (144) (54) 26,570 24,161 ============= ============
Past due receivables relating to loans and advances are analysed as follows:
30 June 2023 31 December 2022 (Unaudited) (Audited) GBP'000 GBP'000 ============================== ============= ============ Neither past due nor impaired 26,142 23,875 Past due: 0-30 days 243 129 Past due: 31-60 days 49 77 Past due: 61-90 days 7 41 Past due: more than 91 days 48 39 Impaired 81 - 26,570 24,161 ============= ============
The financial risk management procedures disclosed in the 31 December 2022 audited financial statements have been and remain in place for the period to 30 June 2023.
12. Share capital Share Capital Total GBP'000 GBP'000 ======================================= ============= ======== 94,182,943 shares at GBP0.91 per share at 30 June 2023 (unaudited) 85,706 85,706
All ordinary shares carry equal entitlements to any distributions by the Company. No dividends were proposed by the Directors for the period ended 30 June 2023.
13. Borrowings 30 June 2023 31 December 2022 (Unaudited) (Audited) GBP'000 GBP'000 =========================== ============= ============ Loans due within one year 5,449 1,783 Loans due in over one year 15,688 16,764 21,137 18,547 ============= ============
Movements in borrowings during the period/year
The below table identifies the movements in borrowings during the period/year.
GBP'000 ====================================== ======= Balance at 1 January 2023 18,547 Funding drawdown 5,789 Interest expense 758 Fee amortisation 55 Origination fees paid (41) Repayments (3,278) Interest paid (686) Exchange differences (7) Balance at 30 June 2023 (Unaudited) 21,137 ======= Balance at 1 January 2022 12,985 Funding drawdown 8,707 Interest expense 852 Fee amortisation 110 Repayments (3,337) Interest paid (777) Exchange differences 7 Balance at 31 December 2022 (Audited) 18,547 ======= 14. Earnings per share
Earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period/year.
The calculation of the basis and adjusted earnings per share is based on the following data:
6 months 6 months Year ended ended ended 31 December 2022 30 June 2023 30 June 2022 (Audited) (Unaudited) (Unaudited) GBP'000 GBP'000 GBP'000 =============================================== ============== ============== ============ Number of shares At period/year end 94,182,943 94,182,943 94,182,943 Weighted average 94,182,943 86,727,509 90,485,862 Earnings attributable to ordinary shareholders GBP'000 GBP'000 GBP'000 Loss after tax attributable to the owners of TruFin plc (5,995) (3,716) (6,637) Earnings per share* Pence Pence Pence Basic and Diluted (6.4) (4.3) (7.3)
* All Earnings per share figures are undiluted and diluted.
Management has been granted 5,451,578 share options in TruFin plc (See note 6 for details). These could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS as they are antidilutive for the periods presented, as the Group is loss making.
15. Related party disclosures
Transactions with directors
Key management personnel disclosures are provided in notes 5 and 6.
During the period, the Group made loans to Storm Chaser UG, a company based in Germany. Storm Chaser UG is 100% owned by Storm Chaser Games - an associate company of Playstack (see note 1). The balance of the loans including interest at the reporting date was GBP756,000 (2022: GBP525,000)
16. Post balance sheet events
On 10 July 2023, the Company issued 11,653,744 ordinary shares through a Placing and an Open Offer. These were issued at GBP0.65 per share, raising gross proceeds of GBP7,575,000.
On 27 July 2023, the Company awarded the first three tranches of awards under a new Long Term Incentive Plan ("LTIP"). These are in the form of options over a total of 3,116,667 Ordinary Shares (the "Options") to the Chief Executive Officer and other senior employees.
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