REG - Sancus Lending Group - Final Results for the year ended 31 December 2025
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RNS Number : 2152X Sancus Lending Group Limited 19 March 2026
Sancus Lending Group Limited
("Sancus" the "Company" or the "Group")
Final Results for the year ended 31 December 2025
Sancus Lending Group Limited (AIM: LEND) is pleased to announce its audited
results for the year ended 31 December 2025.
HIGHLIGHTS
Rory Mepham, Chief Executive Officer of Sancus Lending Group Limited,
commented:
"I am pleased to report another encouraging set of results for Sancus and a
significant uplift in profitability. More importantly, 2025 represents a
meaningful milestone in the five-year journey to reposition and strengthen the
Group. Since 2021, we have focused on rebuilding our platforms, enhancing
leadership, improving credit quality and simplifying our capital structure.
The progress we are now reporting reflects the cumulative impact of that
disciplined work, delivered against what has remained a challenging market
backdrop.
For the year ended 31 December 2025, we grew turnover by 32% to approximately
£22.1m, driven by continued momentum in our UK and Irish core businesses,
alongside an improved performance in the Channel Islands. During the year we
originated £212.5m of new facilities, a 96% increase year on year, and
finished the year with £306.7m of loans under management, up 29%. Alongside
growth, we have remained firmly focused on strengthening the balance sheet.
Further steps were taken to reduce leverage and future financing risk,
including additional ZDP repurchases, contributing to improved profitability.
As a result, we report a profit before tax of £1.2m (2024: £0.1m),
reflecting both operating momentum and a structurally stronger financial
position.
Today, the Group operates through three strategic operating units: Sancus (UK
& Ireland), our core property lending platform; Amberton, our private
wealth and asset management business; and Hawk, our Channel Islands joint
venture. Sancus Lending Group Limited acts as the holding company, providing
strategic oversight, capital discipline and governance across these platforms.
This clearer structure positions us well for the next phase of development.
The Board and I are encouraged by the progress made in enhancing our lending
and funding platforms. Our UK and Irish businesses are operating at greater
scale, Amberton continues to diversify and lower our cost of capital, and Hawk
strengthens both our offshore presence and private wealth connectivity. With
disciplined cost control and prudent underwriting remaining central to our
approach, we have entered 2026 with increasing confidence in our ability to
deliver sustainable, run-rate profitability.
While macroeconomic conditions remain mixed, structural undersupply in our
core residential markets, continued retrenchment by traditional lenders and
growing appetite for secured private credit provide attractive opportunities.
From a significantly stronger foundation than five years ago, we are excited
about the next phase of growth and the continued strategic development of the
Group."
Financial Highlights
· Group revenue increased by 32% to £22.1m (2024: £16.8m).
· A further expected credit loss ("ECL") credit of £0.2m (2024:
£0.4m credit), reflecting continued stabilisation in the credit quality of
the Group's on balance sheet loan portfolio and continued progress in managing
legacy loan exposures.
· Group Profit Before Tax ("PBT") for the year of £1.2m (2024:
£0.1m) including gains of £2.6m (£2024: £2.8m) on the buy-back of some
Zero Dividend Preference Shares ("ZDP Shares").
Operational Highlights
· Loan book at year end of £306.7m, a 29% increase in the year
(2024: £237.6m).
· UK AUM increased by 49% to £125.4m (2024: £84.0m), with the
business writing £93.5m of new facilities vs £48.3m in 2024.
· Irish loan book grew by 76% to £84.3m (2024: £47.8m) with the
business writing new facilities of £84.2m (2024: £39.9m).
· Channel Islands Hawk joint-venture wrote new facilities of
£33.9m in continued challenging market conditions (2024: £20.1m). At the
year-end it had AUM of £97.1m (2024: £105.8m), including £61.6m (2024:
£83.1m) relating to the legacy Sancus Jersey and Hawk businesses.
· Amberton joint venture had a very strong year, including
launching various new loan notes and increasing its loan note programme AUM to
£73.5 million (2024: £41.7m).
Strategic Highlights
· Achievement of £1.2m PBT, reflecting business growth and
improved operating performance especially in the latter part of 2025 and also
supported by £2.6m of gains from the buy-back of ZDP Shares.
· Significant progress in our UK and Irish property lending
businesses, specifically:
o Further strengthening and development of our UK business, including a
broadening of its leadership team and the opening of a larger Manchester
office to allow us to accelerate the growth of the UK business.
o Continued expansion and strong profitability within the Irish business.
· The private wealth and asset management joint venture,
Amberton, has continued to grow and helped support the Group's diversification
of funding, including through the launch of three new loan notes.
· There has been significant growth in the financing facilities
that the Group has access to. During the year we announced a £20m facility
with Paragon Bank. In February 2026 we announced an increase in our facility
with Pollen Street Capital to up to £300m (£150m drawn at the year-end).
· Further strengthening and simplification of the Group's capital
position and flexibility:
o Repurchase of 2.9m of ZDP Shares, resulting in a gain on purchase of c.
£2.6m and adjustments to their terms and conditions. The Group now has no
further interest expense on these shares.
o Somerston, the Group's largest shareholder, committed to provide up to
£10m of junior capital to support growth in the finance facilities that
support our UK and Irish lending business. £7.05m was drawn under this
commitment in 2025.
Current Trading and post balance sheet events
· Management is confident that the business is capable of
delivering run-rate profitability in 2026. In the first two months of 2026
we generated unaudited revenues of £3.9m, a 30% increase on revenues
generated in the equivalent 2025 period (2025: £3.0m). This growth reflects
continued business momentum, including in new facilities. New Facilities
written in the first two months were £27.8m, a 14% increase on loans written
in the equivalent 2025 period (2025: £24.3m).
· AUM as at 28 February 2026 were £321.3m, a 5% increase on AUM
as at 31 December 2025 of £306.7m.
· In February 2026, and in order to support the business's
continued growth, we announced an increase in our facility with Pollen Street
Capital to £300m and an extension of its maturity date to February 2031. The
growth in this facility has also been supported by Somerston subscribing for a
further £1.4m of preference shares in Sancus Loans Limited in January 2026
and agreeing to other changes to the terms of theses preference shares to
align them with this increased and extended facility. In March 2026 Somerston
also subscribed for £0.75m of Sancus Bond in order to support our working
capital flexibility.
For further information, please contact:
Sancus Lending Group Limited +44 (0)1481 708280
Rory Mepham, Chief Executive Officer
Keith Lawrence, Chief Financial Officer
Shore Capital (Nominated Adviser and Broker) +44 (0)20 7408 4050
Tom Griffiths
Oliver Jackson
George Payne
Ansh Batura
Redwood Co Sec Limited +44 (0)1481 701950
Charlotte Sanders
Gwen Norman
CHAIRMAN'S STATEMENT
Introduction
During 2025 we made good progress, returning the Group to profitability and
positioning the business for growth as a private credit and property focussed
asset manager.
Results and Strategic Progress
We have reported a Profit before Tax of £1.2m (2024: £0.1m), a second
consecutive year of profitability before tax. This result reflects various
factors. Notably, a 32% growth in revenue to £22.1m, lower group borrowing
costs and the recording of a modest reduction in our ECL IFRS9 provisions,
allowing us to significantly reduce our operating loss to £1.7m (2024:
£2.3m). After the impact of other items, including the gains on the
buy-back of some ZDP Shares, we have delivered Profit Before Tax of £1.2m
(2024: £0.1m).
Management made more progress to enhance the strategic positioning of the
business. In the UK we further strengthened the leadership team and opened a
larger Manchester office. This will allow us to accelerate our UK growth,
including increasing the volume of bridging business. Our Irish business
continues to perform very well and achieved another record set of results in
2025. Our Hawk Channel Islands joint venture gives us a differentiated
presence in the local property financing market, improving our access to
family office wealth networks. Although Hawk delivered an operating profit,
the Channel Islands property market conditions remain challenging.
Overall, these actions along with measures taken to strengthen our capital
position and lower our group borrowing costs, persuade us that the business
could deliver run rate profitability in 2026.
Capital
Somerston continues to provide significant support to the Group. In January
2025 Somerston, the Group's largest shareholder, entered into a commitment to
provide the Group with up to a further £10m of junior capital to support
growth in the Group's loan financing facilities. During the year £7.05m of
capital was drawn under this commitment. Somerston also subscribed for
£1.4m of Sancus Bond in June 2025 and March 2026 and £2.0m of Ordinary
Shares in December 2025 in order to facilitate the buyback of some ZDP Shares.
Dividend and Shareholders
The Group remains committed to the recovery programme but does not have the
capacity to declare a dividend this year. The Board will revisit this policy
as soon as cash flow and profitability permit.
On behalf of the Board, I would like to thank shareholders for their continued
support and patience. Thanks to the continuing efforts of our team the Group
has made good progress this year. While the Board does not underestimate the
scale of the challenge ahead, we believe the business is increasingly well
positioned to deliver sustained profitability and growth.
I look forward to reporting further positive developments in the coming year.
Steve Smith
Chairman
18 March 2026
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
Since joining the Sancus Group in 2021, our focus has been clear: to
stabilise, strengthen and reposition the Group for sustainable growth. Over
the past five years we have built our lending platforms, enhanced leadership
capability, simplified the capital structure, diversified funding sources and
materially improved credit quality across the loan book.
The results reported for 2025 represent a significant milestone in that
journey. Revenue has grown from £9.0m in 2021 to £22.1m in 2025, while Loans
Under Management have increased from £142m to £306.7m over the same period.
Importantly, we have moved from substantial operating and overall losses in
2021-2023 to achieving a second consecutive year of profitability, delivering
£1.2m Profit Before Tax in 2025.
This is not simply a cyclical recovery. It reflects structural improvements in
how we originate, fund, manage and risk-control our lending activities. 2025
marks the point at which the foundations laid over recent years have begun to
translate into consistent operating momentum.
Our immediate focus is to build on this and deliver sustained operating
profitability. Over the next five years our strategic vision is to transform
the Group into a broader business which focuses on private credit, property
(equity & debt) and other complementary alternative strategies in which
the management, our shareholders and funders have specific sectorial expertise
and deal flow.
Our Strategy
The business continues to prioritise achieving profitability through
delivering on the following strategic priorities:
1. Focusing on targeted revenue growth
In 2025 we achieved a £5.3m (32%) increase in revenue to £22.1m. Our strong
revenue growth during the year reflects our success in 2025 in improving the
scale and quality of business written in the UK and Ireland in particular,
driving increased fee income and an increased interest margin from a larger
loan book. Our UK and Irish platforms continued to develop their strength in
providing development loans (2025 New Facilities: £148.5m, 2024: £86.0m).
Our strengthened teams and capabilities allowed us to increase the volume of
bridging business written (2025 New Facilities: £64.1m, 2024: £22.2m).
2. Achieving operating and cost efficiency
Operating expenses in the year were £1.1m higher at £7.1m (2024: £6.0m).
This includes general operational growth, including required expense
investment to position our business for growth as well as some one-off costs.
We are committed to achieving further expense savings and efficiency gains in
future years, including through greater use of our in-house technology
platform and enhanced expense discipline.
3. Becoming a capital efficient business and lowering
our cost of capital
Our disciplined capital management approach focuses on reducing the amount of
own capital within loans and driving down the cost of funding. We made
progress in lowering our cost of funding during the year and we anticipate
some of the benefits to be realised in 2026 and future years, including:
· Committed credit lines. As at 31 December 2025 we
had drawn £150m under a committed credit line we have with Pollen Street
Capital. In February 2026 we announced an increase in the size of this
facility to £300m and an extension of its term to February 2031. During the
year we established new financing facilities with two other challenger banks.
Operationalisation of these facilities will allow us to lower our cost of
capital.
· Loan notes: We continued to grow our Loan Note
programme via our Amberton joint-venture and had £73.5m of Loan Notes in
issue at the year-end at rates well below the institutional funding line
secured by the Group. Specifically:
o We launched 3 new loans notes (Amberton Loan Note 1 in May 2025 Amberton
Loan Note 2 in December 2025 and Warehouse Loan Note 1 in November 2025).
Loan Note 9 also raised new monies prior to the launch of the three new loan
notes. Total new subscriptions into Loan Notes during the year were £31.1m
(2024: £14.9m).
· Private Wealth Co-funders: At 31 December,
co-funders provided £59.3m of funding to us. We are committed to further
enhancing and refining our private wealth co-funder proposition alongside our
Amberton Loan Note offering.
We achieved a £69.1m (29%) increase in AUM to £306.7m (2024: £237.6m)
during the year. Jurisdictional progress of AUM was as follows:
· Our UK AUM increased by 49% to £125.4m (2024:
£84.0m) with the business writing £93.5m of new facilities (2024: £48.3m).
We continued to broaden and deepen our UK business' leadership team and it was
notable that the business's volumes picked up markedly in the 2(nd) half of
2025.
· Our Irish loan book grew by 76% to £84.3m (2024:
£47.8m) with the business writing new facilities of £84.2m (2024: £39.9m).
We continue to be excited about the prospects for our Irish business.
· Our Channel Islands Hawk joint-venture, which
commenced in January 2024, wrote new facilities of £33.9m (2024: £20.1m) in
very challenging market conditions. At the year-end it had AUM of £97.1m
(2024: £105.8m), including £61.6m relating to the legacy Sancus Jersey and
Hawk businesses.
Overall, the new facilities written this year (£212.5m vs £108.2m 2024),
combined with the other steps taken to enhance the positioning of our
businesses, gives us confidence in our ability to further increase our AUM in
2026 and deliver profitable growth.
Financial Summary - Profit and Loss Account
We have reported a Profit before Tax of £1.2m (2024: £0.1m). This reflects
various factors:
· Group revenue increased by 32% year on year from
£16.8m in 2024 to £22.1m in 2025 with the UK revenue up by 49% to £5.5m
(2024: £3.7m) and Ireland up by €1.1m (2024: €2.3m). Interest income
increased strongly to £13.2m (2024: £10.4m), helped by the growth in AUM and
the successful resolution of non-interest bearing loans previously provided
for.
· A reduction in group borrowing costs to £2.1m
(2024: £2.3m), primarily reflecting the buy-back of 1.2m of ZDP Shares in
June 2025 and a further 1.7m buy-back of ZDP Shares in December 2025.
Following changes to the terms and conditions of these ZDP Shares we no longer
have to record an interest expense from these shares.
· A £0.2m ECL credit under IFRS9 in comparison to
a £0.4m credit for ECL under IFRS9 in 2024 as the business benefitted from
continued stable credit quality.
· Operating expenses in the year were £1.1m higher
at £7.1m (2024: £6.0m). Other net gains of £2.5m (2024: £2.7m), primarily
reflect the gains on the buy-back of ZDP Shares.
· A profit of £0.4m from the Group's share of the
Hawk joint venture represented a turnaround from the loss in the first year in
operation.
Financial Summary - Balance Sheet
The Group's total assets as at 31 December 2025 were £195.0m (31 December
2024: £122.1m). The increase in total assets primarily reflects growth in
loans financed through Sancus Loans Limited. Sancus Loans Limited had loans of
£156.2m at 31 December 2025 (31 December 2024: £91.4m). The Group
transitioned into net assets of £1.1m at 31 December 2025 (31 December 2024:
net liabilities £2.1m) as a result of the combined impact of the profit
before tax outlined above and the share issue in December 2025 for the ZDPs
bought back in December 2025.
Group cash and cash equivalents were £3.2m at 31 December 2025 (31 December
2024: £2.5m) of which £1.1m related to Group operational cash and £2.1m was
within Sancus Loans Limited.
Our investment in the Hawk joint venture had a carrying value of £14.7m at
the year-end (31 December 2024: £14.4m). Note 10 below provides further
details of our investments in joint ventures.
The Group's liabilities consist of the Bond instrument, the ZDP Shares and the
Pollen credit facility drawdown. The outstanding value of the Bond instrument
at the year-end was £20.3m (31 December 2024: £17.0m). In June
2025, bondholders approved an amendment to the terms of the bonds to
introduce a payment-in-kind interest option, allowing bondholders to elect to
receive interest rolled up and paid on maturity at an increased rate of
8.5% per annum, instead of the 8% cash coupon paid quarterly. As at 31
December 2025 the ZDP Shares had a carrying value of £3.3m (31 December 2024:
£8.8m), the decrease reflecting the ZDP Share buy-back transactions completed
during the year. The ZDP shares have a maturity date of 5 December
2030 following ZDP shareholders approving a 3 year extension of the
final capital entitlement repayment date on 24 June 2025. On this
date, the ZDP shareholders also approved the suspension of any further
capital growth from 24 June 2025, resulting in the final capital
entitlement being £2.0990 per ZDP share. This also means that from that
date the Group does not need to accrue any further interest charge related to
the ZDP Shares.
The Pollen credit facility of £200m (31 December 2024: £125m) stood at
£150m drawn as at 31 December 2025 (31 December 2024: £90m). During the year
Sancus Loans Limited, one of the Group's funding subsidiaries, issued £4.65m
of preference shares to Somerston. These preference shares carry a non-cash
cumulative coupon of 15%.
Key Performance Indicators
2021 2022 2023 2024 2025
Revenue (£ million) £9.0m £10.0m £12.3m £16.8m £22.1m
Loans under management (£ million) £142.0m £169.0m £202.1m £237.6m £306.7m
Operating loss (£ million) (£10.2m) (£4.7m) (£9.8m) (£2.3m) (£1.7m)
(Loss) / Profit before tax (£ million) (£10.4m) (£14.0m) (£9.0m) £0.1m £1.2m
Operational Updates
Wholly Owned Business units
· Sancus Lending UK: We continued to build out
our UK business. We further enhanced the leadership in Manchester during the
year and also relocated to a larger office. These steps, alongside our
existing London based capabilities and operations, enhance our ability to grow
our UK loan book, including in bridge financing, and achieve greater operating
efficiency.
· Sancus Lending Ireland: Our Irish business
continued to perform well during the year, reporting continued profitability
from an increased loan book. The business is well positioned to take advantage
of opportunities in the Irish market and we believe further profitable growth
is achievable.
Joint Venture Businesses
· Hawk Lending - Channel Islands: Our Hawk joint
venture commenced operations in January 2024. Market conditions in the Channel
Islands in 2024 were very challenging. The joint venture has turned a profit
in 2025 whilst still navigating challenging market conditions.
· Amberton: Amberton, our private wealth and asset
management joint venture (co-owned with our majority shareholder, the
Somerston Group) continued to develop during the year. It plays an important
part in allowing us to diversify our funding and lower our cost of capital and
during the year launched ALN1, ALN2 and WLN1. Assets under management through
the loan notes totalled £73.5m at the year-end (31 December 2024: £41.7m).
We are planning further growth in this business in 2026.
Loan book management and reduction in non-performing loans
Continued emphasis has been placed on actively managing loans once the initial
drawdown has been made. This has been particularly important against the
backdrops of various market related pressures such as cost inflation. We are
pleased to report that the percentage of loan book in recovery continues to
reduce.
In the year ended 31 December 2025 we recognised an ECL credit under IFRS9 of
£0.2m (31 December 2024: £0.4m), reflecting continued stabilised credit
quality.
Diversification of funding
We continue to focus on increasing the funding capacity and diversifying the
off-balance sheet funding sources of the business, on improved terms. We are
seeking to work with a diversified mix of funders, both private and
institutional, to match funders with loans meeting their varied risk and
reward criteria.
Private Wealth Co-Funders remain one of our largest funding channels, with the
majority of the Offshore loan book being co-funded. As at 31 December 2025
co-funders provided £59.3m of funding (31 December 2024: £64.3m). We
continue to nurture relationships with the Co-Funder base, with these
typically being Offshore private individuals and family offices. We expect
that our Hawk joint-venture will enhance our capabilities here.
Loan Notes, managed by Amberton Limited, remain an important funding
instrument and a part of the business that we are committed to growing. Loan
Note 8, which was launched in January 2022, was £33.1m as at 31 December 2025
(31 December 2024: £33.1m). Loan Note 9 was launched in October 2024 and had
an AUM of £25.6m by the year-end. ALN1, ALN2 and WLN1 had AUMs of £9.0m,
£2.6m and £2.5m respectively as at 31 December 2025.
We continue to make use of an institutional funding line arranged by Pollen
Street Capital ("Pollen Street") and which is designed to be complementary to
our Co-Funder base and Loan Note program. At 31 December 2025 the total drawn
was £150m (31 December 2024: £90m). The Pollen Street facility continues to
be strategic for the business and is generally utilised in relation to funding
development loans. We also recognise that the availability, cost,
diversification and flexibility of funding is key to achieving our growth
ambitions.
Operations
A focus on operational efficiency continued into 2025. At the end of 2025, the
Group headcount was 51 (31 December 2024: 42). We believe the business is now
well resourced to meet its strategic objectives and are focussing on
continuous improvement and the development of our people. We may continue
to selectively and carefully grow our team, not least in the UK where the
establishment of a Manchester office gives us flexibility and the ability to
access additional talent pools.
ESG
We recognise our responsibility to incorporate sustainability practices
through our business and our environmental, social and governance ("ESG")
journey continued in 2025. We continue to use the materiality assessment to
assist us in prioritising the key ESG issues we face and have commenced
utilising a data-driven approach to support our progress in improving our
approach to managing ESG factors.
We are pleased to publish our 2025 ESG report on our website. The report
identifies the progress against our key objectives set in 2022, recognises the
key challenges we have faced and summarises key data. An extract of the ESG
report is included on page 12 of this report.
Going Concern
The Company and Group do not have any debt liabilities that fall due within
the next 12 months. We took a number of steps during 2025 to further simplify
our capital structure. Based on this, the Directors are of the opinion that
the Company and group has adequate financial resources to continue in
operation and meet its liabilities as they fall due for the foreseeable
future.
Outlook
While the macroeconomic environment remains mixed, several structural trends
support our outlook:
· Continued undersupply of housing across the UK and Ireland
· Increasing regulatory pressure on traditional banks, constraining
credit availability
· Growing institutional and private wealth appetite for secured
private credit strategies
· Demand for specialist, relationship-led development and bridging
finance
We believe the small-to-mid-market residential and mixed-use property sector
remains particularly attractive. Developers continue to require flexible,
responsive funding partners who combine credit discipline with sector
expertise.
Beyond our core lending operations, we see opportunity in:
· Expanding our private wealth distribution capabilities
· Scaling structured credit solutions
· Selectively introducing complementary private credit strategies
where we have expertise and deal flow advantage
We will pursue these opportunities with the same disciplined approach that has
underpinned our recovery.
Five years ago, the Group faced significant operational and financial
challenges. Through disciplined execution, strengthened leadership and careful
capital management, we have rebuilt the foundations of the business. The
achievement of meaningful profitability in 2025 represents an important
milestone in that journey. While there remains work to do, we now operate from
a position of greater stability, stronger momentum and increasing strategic
flexibility. We are excited about the next phase of our development.
Rory Mepham
Chief Executive Officer
18 March 2026
PRINCIPAL RISKS, UNCERTAINTIES AND RELATED INTERNAL CONTROLS
The Group aims to carefully manage the risks which are inherent across its
business activities in order to deliver an appropriate risk adjusted
commercial return. The principal risks which the Group has consciously
accepted in the pursuit of value creation are capital and liquidity risk,
regulatory and compliance risk, market risk, credit risk, strategic risk, and
investment risk. With regard to the FinTech activities, exposure to investment
risk is a factor of the strategic, liquidity, credit and operational risks
assumed by the platforms in which the Group is invested.
This section on the Group's Principal Risks should be read together with the
sections on the Group's Governance Framework, the operation of the Audit and
Risk Committee, as well as Note 22 which describes the sensitivity of the
Group's financial results to its Financial Risk exposures. These sections
explain how these risks are being managed, monitored and governed.
The table below describes the Group's assessment of the principal risks being
those which have the potential to have a significant impact on the Group's
business model, future performance, solvency or liquidity.
Principal Risks Internal controls mitigating Risks Current Rating of Risks
Group
1. Capital and Liquidity Risk Medium
Sancus' own funding is sourced primarily from the Corporate Bond (as detailed Sancus has a Treasury Committee which meets once a month to manage its capital Completion of fundraising and liability management exercises over the last
in Note 17), along with preference shares that have been injected into one of and liquidity position, and forecasts over several years to predict longer couple of years has significantly improved the Group's capital and liquidity
the Group's subsidiaries. term funding requirements. position.
Expansion of lending and investment activities will be constrained to the Management of each of the operating companies balance their lending and Management at Group and subsidiary level are focussed on raising additional on
extent of retained profits unless further sources of funding are secured. funding and proposals to advance lending are typically contingent on and off balance sheet funding in order to grow lending activities and support
sufficient funding having been secured in advance. funding commitments.
The business seeks to maintain a liquidity buffer at all times.
2. Regulatory and Compliance Risk Medium
As a Financial Services business, compliance with regulation is considered All entities have developed and implemented appropriate policies and The compliance framework as described is considered to be operating
paramount within the Group, particularly with regard to the various regulators procedures relating to regulatory compliance and Anti Money Laundering. effectively and has recently been enhanced to increase oversight of all risks
in the jurisdictions that Sancus operating entities conduct business within
within the Sancus lending business through the Executive Risk Committee.
and the various Anti Money Laundering (AML) regulations with the regulatory
landscape in all jurisdictions continually evolving.
The Executive Risk Committee monitors these risks, and forthcoming
regulations, with appropriate reporting from the Risk and Compliance Director Measures are in place to monitor clients against various databases to identify
and Money Laundering Reporting Officers. External, independent partners if any sanctions.
The Company has chosen to comply with the provisions of the QCA Corporate complete additional regulatory horizon scanning reviews and conduct periodic
Governance Code. Refer Page 18 for further detail. reviews of internal compliance including AML file reviews.
The Company has an appointed NOMAD, Shore Capital, whom it liaises with
regularly, to ensure compliance with the AIM rules, including the Market Abuse
Regulations.
The Board receives quarterly reports including, where appropriate from Money
Laundering Reporting Officers, on compliance monitoring plans and any breaches
identified.
3. Market risk High
The primary market risks are considered to be interest rate and foreign Exposures to these risks are monitored regularly by the Sancus Treasury More information on the sensitivity to these risks is contained in Note 22.
exchange risk. Given the nature of the business operations, with relatively Committee and reported to the Board on a quarterly basis.
short-term lending and currencies on lending opportunities being matched (or
hedged) the exposure is considered to have limited impact on its position as a
going concern.
Macro-economics including increased inflation and bank base rate and euro
These risks are identified and assessed at the time of entering into new margin fluctuations may have an effect on margin. The introduction of variable
transactions. base rate loans and foreign exchange hedging are having an impact on
mitigating the risk.
Foreign exchange risk primarily arises from the USD and Euro investments in
the FinTech portfolio and Euro loans held in the Irish lending book.
With changes in bank base rates, Co-Funders might look elsewhere to invest;
however, variable rate Co-Funder returns should minimise this risk with
investors continuing to receive attractive risk adjusted returns on asset
backed lending.
4. Credit Risk High
The Group has direct credit exposures through its on balance sheet lending and Each operational entity has its own credit policies and procedures which are The IFRS9 provision remained comparatively steady during 2025, reflecting a
credit support. Indirect credit risk (potential losses to Co-Funders) could the subject of at least annual review by operating entity Boards. stabilisation in the credit quality of the Group's on balance sheet loan
impact further business development.
portfolio and continued progress in managing legacy exposures.
The respective Credit Committees take all credit decisions, monitor credit
exposures on an ongoing basis and manage recoveries situations. Following See Note 22 (5) for further details.
Covid-19 tighter lending criteria was implemented.
Increases in material costs, base rate and inflation have created downside
risk through potential delays in loan repayments and reduced recoveries.
Increased loan management oversight will help mitigate this risk.
5. Operational Risk - Execution of the Sancus strategy Medium
The majority of Sancus' capital has been deployed into the various trading The Board and Executive Risk Committee of Sancus Group recognise the challenge By its nature, this risk remains an on-going area of focus for the Board,
subsidiaries. There is a risk that the planned growth of these businesses will of building the business to meet the financial targets and actively manage all particularly with respect to business development in the UK and Ireland.
not be realised primarily as a result of sub optimal levels of loan aspects of the business on an ongoing basis. Plans and budgets are in place
origination and funding. and performance against these is monitored regularly by the management team
and the Executive Risk Committee.
The emergence of Covid-19 created downside risk on new loan origination levels
although we believe this risk has now dissipated.
There continues to be strong demand from both Borrowers and Co-Funders for the
lending products offered across the business, and the risk adjusted returns
available to Co-Funders. IT capabilities for Sancus were further enhanced in recent years, providing
Co-Funders with online interactive services and creating operational
efficiencies.
6. Operational Risk - Operating entities High
Loan funding is provided by a blend of institutional and co-funding models, The Executive Risk Committee of Sancus Group is in active engagement with Oversight of these risks is completed by the Executive Risk Committee, with
with jurisdictional variations in the utilisation of these models. The limited additional institutional funding lines to increase diversity, consider the agreement on the mitigation necessary to minimise the risks and monitoring to
availability of diverse funding presents an operational risk to continued cost of funds and continue to evolve the co-funder model with the view to ensure these controls are effective.
growth of the lending model. increase exposure across the lending operation.
With the recent focus on increasing the loan book and resourcing the operation The lending operation is mitigating this through the introduction of
effectively, there is a risk that management of the existing loan book is technology improving oversight of key milestones and is actively engaged in
under resourced and key milestones in the loan lifecycle are missed. acquiring additional resource for loan management.
With reliance on various proprietary and third-party IT systems to conduct the Introduction of new technology to complement the existing operational
lending operations, whilst ensuring these systems remain effective for the framework ensures elements of these risks are mitigated with effective
business, enable automation, are utilised to maximum effect, maintain data automation and data resilience. Continual development of the existing
integrity and remain secure from external factors remains an ongoing challenge technology and enhancements to the back-office systems ensures the systems
and presents potential risks. remain secure.
7. Investment risk - FinTech Ventures Platform Valuations Low
Across the majority of the FinTech portfolio, the growth rates historically The Group has board observer rights on most of the remaining investee company As a result of the platforms taking longer to reach profitability, and given
have been slower than originally anticipated and the business models have boards and thus is able to participate in the strategic discussions and that several are seeking additional capital, the Board has valued our holding
proved more capital intensive. monitor the progress on each platform. of the FinTech portfolio at Nil at the end of 2025 (2024: £Nil).
Many of the FinTech platforms require additional capital to fund their ongoing The Group regularly monitors the progress of each business, with regular The valuations are also subject to a number of material estimation
growth to enable them to reach profitability. There remains a risk that some review of financial and KPI reporting. uncertainties, refer to Note 22 (4).
platforms may not be successful in the longer term, either as a result of lack
of loan funding, lack of working capital funding or difficulties in
establishing a competitive position in their chosen markets.
Quarterly valuations are conducted for all investments in platforms. These are
based on a variety of factors including the pricing for any recent relevant
capital transactions by the respective platform or using an appropriate
valuation methodology.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Introduction and ESG ambition
We continue to focus on a data-driven approach to ESG. This section is an
executive summary of Sancus' full ESG report, which will be made available on
our website.
Our headline ESG objectives are:
Environmental Social Governance
Promote the efficient use of resources by reducing the environmental impacts Enhance our approach to social impact by supporting our people and communities Strengthen our governance around decision-making, data and reporting to
associated with our operations and business activities. to thrive. support our internal and external stakeholders in delivering our ESG goals.
An important part of the overall strategy is to improve data quality, to allow
us to understand our impact and identify strategies for reducing our carbon
emissions and our impact on the wider environmental landscape. We acknowledge
the impact the built environment may have on carbon emissions and are working
with our partners to evolve sustainable practices. We continue to be
committed to improving the communities we operate in through charitable work
and supporting local economies. We strive to maintain high ethical standards
across our business through our governance practices and continue to consider
how a more diverse organisation can support these standards.
Further information will be set out in the ESG report that will be uploaded to
our website at https://corporate.sancus.com/investor-relations/.
Our plan and priorities
Our ESG team has members from across our business and are supported by
industry experts. The ESG team have the full support of the Executive team.
We believe that as Sancus grows ESG will be a key topic. We recognise that
data places an important role in setting and attaining goals and continue to
strive for improved data collation. We continue to ensure appropriate
resources are available to help us achieve our ESG targets.
Our ambition is for ESG to become an integrated part of Sancus and be
established in all our practices. We will leverage this to deliver positive
impacts for our stakeholders while continuing to help drive long-term value
and growth for Sancus.
The key overarching priorities for Sancus are set out below. We have also
outlined specific progress to date and next steps across our ESG objectives.
1. Improving our ESG data maturity and addressing quick wins.
2. Strengthening our ESG capability by building expertise and
embedding into wider business decision-making processes.
3. Establishing targets and accelerating action on our most material
ESG topics.
4. Exploring ways of leveraging ESG in the delivery of business
value to influence industry change.
Our key enablers
The key enablers for us to achieve our ESG objectives are:
· Data - continuing to improve our systems and processes
ensuring quality data is obtained to maximise confidence in our measurement
against targets and how we report.
· Employee engagement - placing our people at the centre of
our ESG strategy to understand how our business impacts on them and how they
can be empowered to have an impact on our business from an ESG perspective.
· Technology - integration of technology to support
business scale and enhance delivery of our ESG strategy and data collection
whilst streamlining the business operations.
· Training - continued education and training of key ESG
matters with a focus on building employee engagement and confidence.
As mentioned above, our full ESG report has been uploaded to our website.
This includes a more detailed overview of our 2025 commitments and challenges
and our objectives for 2026.
Task Force on Climate-related Financial Disclosures ("TCFD") Statement 2025
Governance - Sancus' governance around climate-related risks and opportunities
Board oversight of climate-related risks and opportunities
As set out in the Corporate Governance section the Group has elected to comply
with the 2023 QCA Corporate Governance Code. The Sancus board has overall
responsibility for business strategy, including setting the strategy, approach
and monitoring its implementation. The board receives quarterly reports from
the Executive Management, including matters relating to ESG and
climate-related risks.
The CEO has responsibility for delivery of the business strategy including ESG
and climate-related risk matters and is present at board meetings including
those where ESG and climate-related matters are raised, with these discussions
helping steer the overall strategy.
Management's role in assessing and managing climate-related risks and
opportunities
Management of ESG and climate-related matters has been delegated to the
Executive Management team, with representatives from across the business
operations as members of the ESG Team, who provide recommendations for new
initiatives, activities and overall ESG and climate-related matters strategy.
Strategy - Impacts of climate-related risks and opportunities on the business,
strategy and financial planning
Climate-related risks and opportunities identified by the organisation over
short, medium and long term. How climate-related risks and opportunities
impact the organisation's business, strategy and financial planning.
Sancus considers risk and opportunity in the short, medium and long term:
Short: 0-1
years
Medium: 1-5 years
Long: 5-10 years
The core business model is the provision of short-term funding for property
development and bridging. There is potential impact on the model from
climate-related risks and opportunities in several ways. Sancus has identified
two key categories with regard to climate-related risk and opportunity: (1)
risks and opportunities related to a low-carbon economy; and (2) risks and
opportunities related to the physical impacts of climate change - summarised
in Table 1 below.
This allows Sancus to assess and consider climate-related risks and how the
opportunities they present can be considered in developing the overall
strategy.
The annual ESG report provides key data across GHG Protocol Scope 1, Scope 2
and Scope 3 emissions. As stated in the report, we continue to engage with our
key suppliers to further improve data, which will allow us to better measure
our GHG emissions and develop a longer term strategy on reduction.
Resilience of organisation's strategy, taking into consideration different
climate-related risks scenarios, including a 2°C or lower scenario.
Sancus continues developing its requirements under TCFD, however currently
does not have the capability and resources to perform climate-related scenario
analysis as part of the reporting exercise. We anticipate we will be equipped
to complete thorough climate scenario analysis within the next 3-4 years.
Table 1a - Summary of Sancus' climate related risks
Type Climate-related risk Potential financial impact Timeframe
Transition risks Policy & legal Change in building regulation policy, such as imposing minimum EPC/BER Increased build cost for clients to meet improved policy standards. Medium
ratings.
Market Change in home purchaser preferences, such as a preference towards more energy Reduced demand for sale of older buildings, resulting in extended exit, or Long
efficient homes. inability to sell homes.
Reputation Reputational risk, such as increased scrutiny from co-funders and investors. Reduced availability of appropriate funding lines or increased cost of funds Medium
to meet investor expectations.
Physical risks Physical risk Increased severe weather events as a result of global warming and changing Reduced asset values due to changes in flood risk assessments by local Medium/Long
climates, such as increased flood risks. authorities/Environment Agency.
Physical risk Increased severe weather events as a result of global warming and changing Reduced asset values due to changes in subsidence assessments by local Medium/Long
climates, such as increased drought and erosion risks. authorities/British Geological Survey.
Table 1b - Summary of Sancus' climate related opportunities
Type Climate-related opportunity Potential financial impact Timeframe
Products Develop lending products incentivising borrowers to meet high energy Increased demand for built assets resulting in improved exit strategies. Medium
efficiency ratings.
Increased interest from co-funders and investors helping maintain or decrease Medium
cost of funding.
Risk Management - Climate-related risk management and metrics
Processes for identifying and assessing climate related risks
Sancus continues to develop its strategy for identifying, assessing and
managing climate-related risks and opportunities. The ESG Team are responsible
for the overall ESG risk management framework, which includes identifying and
assessing climate-related risks. The credit-risk process for all borrowers
includes assessment for known climate-related risks (e.g. flood risk).
Processes for managing climate-related risks
Sancus recognises further investment in training and support for the ESG Team
is fundamental to build the strategy for managing climate-related risks and is
committed to providing necessary resources to achieve this.
Processes for integration of identifying, assessing and managing
climate-related risks within the organisations overall risk management.
Through the Executive Risk Committee, Sancus intends to further integrate
climate-related risk management into the overall risk management strategy
within the next 12 months.
Metrics and Targets
Metrics used by the organisation to assess climate-related risks and
opportunities in line with the strategy and risk management process. Including
Scope 1, Scope 2 and Scope 3 greenhouse gas emissions (GHG) and the related
risks.
We summarise below the Scope 1, 2 and 3 GHG Emissions data for 2025 and
2024.
GHG Emissions data (tCO2e)
2025 2024
Scope 1 3.950 3.387
Scope 2 3.417 3.189
Scope 3 39.410 40.911
Capturing and understanding quality emissions data is key to developing a
carbon reduction strategy. Despite progress and engagement, obtaining accurate
carbon emissions data from key providers can still be difficult. Whilst data
quality has improved, Sancus recognises further improvements present
opportunities in understanding GHG emissions and support the development of a
longer term reduction strategy.
CORPORATE GOVERNANCE
Board of Directors and Executive Management Team
Introduction
The Board recognises the importance of a strong corporate governance culture.
The composition of the Board is the subject of ongoing review. Somerston Group
had the right to nominate a candidate for appointment to the Board and
presently exercises this right via the appointment of Tracy Clarke (bio noted
below).
Board of Directors
The Company operates a unitary Board Structure, comprised of both Executive
and Non-Executive Directors. Biographical details of the Directors can be
found below. The terms of Directors' appointments are available from the
Company Secretary.
On joining the Board, any new director will have received an induction through
face to face meetings with existing directors, senior management and the
Company Secretary.
The Chairman leads the Board and is responsible for its overall effectiveness
in directing the Company, its corporate governance responsibilities, and
addressing any training or development needs of the directors.
Steve Smith - Independent Non-Executive Director
Mr Smith was formerly an Executive Director and the Chief Investment Officer
of The British Land Company PLC, the FTSE 100 property investment trust, with
responsibility for the group's property and investment strategy, standing down
in 2013. Prior to this, Mr Smith was Global Head of Asset Management and
Transactions at AXA Real Estate Investment Managers, where he was responsible
for the asset management of a portfolio of assets valued at more than €40
billion on behalf of life funds, listed property vehicles, unit linked and
closed end funds. Prior to joining AXA in 1999, Mr Smith was Managing Director
at Sun Life Properties for over five years. Over the last decade, Mr Smith has
worked extensively in governance related roles for a number of property
focused organisations. Mr Smith is Chairman of the Board and is a member of
the Audit and Risk Committee and Remuneration and Nomination Committee. Mr
Smith was appointed to the Board on 11 May 2021. He is resident in the UK.
John Whittle - Independent Non-Executive Director
Mr Whittle has a background in large third party Fund Administration. He has
worked extensively in high tech service industries and has in-depth experience
of strategic development and mergers/acquisitions. He has experience of listed
company boards as well as the private equity, property and fund of funds
sectors. He is currently on the Board of BH Macro Limited after being
appointed on 1 July 2025 and Director and Audit Chair of The Renewable
Infrastructure Group Ltd ("TRIG") (both listed on the main market of the
London Stock Exchange). Mr Whittle, a Chartered Accountant, has also served as
Chairman of Starwood European Real Estate Finance Limited until 27 February
2026, Director and Audit Chair of Chenavari Toro Income Fund Limited (admitted
to trading on the Specialist Fund Segment of the London Stock Exchange) until
his resignation on 30 June 2025, Finance Director of Close Fund Services
Limited (responsible for internal finance and client financial reporting),
Managing Director of Hugh Symons Group PLC and Finance Director and Deputy MD
of Talkland International Limited (now Vodafone Retail).
Mr Whittle was appointed to the Board, the Audit and Risk Committee and the
Remuneration and Nomination Committee on 23 September 2016, after having
served as an Alternate Director since December 2015. He is resident in
Guernsey. Mr Whittle is Chairman of the Audit and Risk Committee, and of the
Remuneration and Nomination Committee.
Tracy Clarke - Non-Executive Director
Ms Clarke is a representative of The Somerston Group ("Somerston"), the
Company's largest shareholder which has the right to nominate one individual
for appointment to the Board. Ms Clarke joined Somerston in 2016 and acts as
the Group's Chief Operating Officer. Ms Clarke is also Managing Director of
Carlton Management Services Limited, a licensed Jersey trust company business.
Prior to joining Somerston, Ms Clarke worked for Deutsche Bank in Jersey and
Zurich for over 10 years, specialising in financial Intermediary and external
asset manager business. Ms Clarke is a Fellow of the Institute of Chartered
Accountants in England and Wales and holds the CISI Investment Advice Diploma.
Ms Clarke was reappointed to the Board on 31 March 2024 and is a member of the
Audit and Risk Committee and Remuneration and Nomination Committee.
Rory Mepham - Executive Director
Rory joined Sancus in January 2021, assuming the role of Interim CEO on 1 July
2021 and was then confirmed as CEO and board member on 23 November 2021.
Joining Sancus from Somerston where he managed their European property
platform which includes businesses in the hotel, retail, land development,
student housing and PRS sectors. Rory has over 20 years experience in the UK
and European property market. He has spent his career working with
institutional capital and has an extensive track record in M&A, corporate
finance, capital raising, debt finance, investment management and property
development. Rory holds an MBA from the Cranfield School of Management, a BSc
(Hons) in Land Management from the University of Reading and qualified as a
member of the Royal Institute of Chartered Surveyors (MRICS).
Executive Management Team
Rory Mepham - Chief Executive Officer
See above.
Keith Lawrence - Chief Financial Officer
Keith was appointed to the Executive Management Team on 1 April 2024. Keith
has over 30 years experience in the financial services industry. After
qualifying as a Chartered Accountant with KPMG Keith worked in investment
banking for 20 years, focussing primarily on financial services
clients. Prior to joining Sancus Keith was the CFO of an innovative private
equity backed residential construction business. Keith holds a BA(Econ)(Hons)
in Accounting and Finance from the University of Manchester. Keith joined
Sancus in February 2024.
James Waghorn - Chief Investment Officer
James was appointed to the Executive Management Team on 8 March 2022. James
has over 14 years experience in the UK and European property market. James has
extensive experience across the corporate real estate, investment and property
development sectors. For the past 6 years James has led Somerston's land
development business, a strategic land and development focused business with
capacity for in excess of 2,350 units within its strategic portfolio. James
holds a BSc in Investment and Finance in Property from the University of
Reading and is MRICS accredited. James joined Sancus in January 2021.
GOVERNANCE FRAMEWORK
The Board is committed to maintaining high standards of corporate governance
throughout the Company's operations and to ensuring that all of its practices
are conducted transparently, ethically and efficiently. The Board believes
that scrutinising all aspects of the Company's business and reflecting,
analysing and improving its procedures will minimise the potential for
downside risk and will preserve shareholder value. In compliance with the AIM
Rules for Companies, published March 2018, the Company has chosen to comply
with the provisions of the 2023 QCA Corporate Governance Code (the "QCA
Code"). The Company is also mindful of the provisions of the Finance Sector
Code of Corporate Governance, as amended by the Guernsey Financial Services
Commission in November 2021.
The Board believes that applying the principles and reporting against the
provisions of the QCA Code accurately reflects the nature, scale and
complexity of the business and enables the Board to provide information to
shareholders on its activities in accordance with the principles set out in a
recognised governance framework. Furthermore, through applying the relevant
provisions the Company is better positioned to mitigate downside risk and in
doing so, preserve long-term shareholder value. The Company's corporate
governance framework has been based on these principles and is designed to
deliver the Group's strategy, and the application of such principles to the
operation of the Board ensures that its decision-making processes remain
focussed on the long-term sustainable success of the Company.
As at 31 December 2025, the Company complied substantially with the relevant
provisions of the QCA Code and it is the intention of the Board that the
Company will comply with these provisions throughout the year ending 31
December 2026, save with regard to the following:
· The appointment of a Senior Independent Director: Given the
size and composition of the Board, the Board does not consider it is necessary
to appoint a Senior Independent Director. The Board considers that all the
independent Directors have different qualities and areas of expertise on which
they may lead where issues arise and to whom concerns can be referred.
· Internal audit function: The Board has considered the need for
an internal audit function and is satisfied that the compliance policies,
procedures and reporting mechanisms in place throughout the Group are
sufficient, and that implementing a separate internal audit function would be
unnecessary. This requirement is assessed annually by the Audit and Risk
Committee.
How we apply the QCA Code
The Company has established specific formally constituted committees and
implemented certain policies, to ensure that:
· It is led by an effective Board which is collectively
responsible for the long-term sustainable success of the Company and
establishes a culture whereby the tone is set from the top which is consistent
with the objectives, strategy and business model of the Group.
· The Board and its committees have the appropriate balance of
skills, experience, independence, and knowledge of the Company to enable them
to discharge their respective duties and responsibilities effectively.
· The Board establishes a formal and transparent arrangement for
considering how it applies the corporate reporting, risk management, and
internal control principles and for maintaining an appropriate relationship
with the Company's auditors.
· There is a dialogue with shareholders based on the mutual
understanding and alignment of objectives, conducted primarily through the CEO
and the Corporate Broker.
Risk management remains a key area of focus during Board meetings. Details of
the Company's risk management and internal control framework is set out on
pages 9-11.
Composition and Independence of the Board of Directors
The Board of Directors is responsible for ensuring the affairs of the Company
are properly managed through formulating, reviewing and approving the
Company's strategy, budgets, and corporate actions and that oversight,
scrutiny and challenge is applied to Executives responsible for the day-to-day
activities of the Group. The Company seeks to deliver long-term growth for
shareholders and maintain a flexible, efficient and effective management
framework within an entrepreneurial environment.
It is important that the Board itself contains the right mix of skills and
experience in order to deliver the strategy of the Company. As such, the Board
is comprised of:
· Two Independent Non-Executive Directors, one of which serves as
the Chairman, who is responsible for leadership of the Board and ensuring its
effectiveness on all aspects of its role.
· One Non-Executive Director who, whilst sharing the fiduciary
and statutory duties of the independent directors, is also an executive
director of The Somerston Group, a significant shareholder of the Company, and
therefore not considered independent under the QCA Code.
· One Executive Director, who is also a member of the Group's
Executive Committee and is therefore not considered independent under the QCA
Code.
The Board is comprised of individuals holding professional qualifications and
experience relevant to the activities of the Company. A biography of each of
the Directors is included on pages 16 and 17. The time requirement expected
from each of the Directors is set out in writing in their respective
appointment letters.
Shore Capital has been appointed as the Company's Corporate Broker and
Nominated Adviser under the AIM Rules and advises on compliance with the AIM
Rules, corporate communications and acts as financial adviser to corporate
actions. Additionally, the Company has appointed a professional Company
Secretary who assists the Board of Directors in preparing for and running
effective board meetings, including the timely dissemination of appropriate
information. The Company Secretary provides guidance to the extent required by
the Board on certain aspects of the legal and regulatory environment, within
which the Company operates.
The Board believes that long serving Directors should not be prevented from
forming part of the Board or from acting as Chairman and no limit has been
imposed on the overall length of service of the Directors. Each Director will
retire and seek reappointment at every third annual general meeting, with
those serving for nine years or more subject to reappointment annually. The
Board meets on at least a quarterly basis during the financial year.
The Board has appointed several committees to support it in different areas of
the business; each with formal terms of reference, with specific roles as set
out below.
The Board undertakes an annual evaluation of its own performance, the
performance of its formally constituted committees and that of individual
Directors. This includes a formal process of self-appraisal reviewing the
balance of skills, experience, independence and diversity present on the
Board, and individual director performance, contribution and commitment to the
Group to ensure that the Board and its committees continue to operate
effectively, or to identify areas where action is required. The remainder of
the Board is responsible for evaluating the performance of the Chairman. The
Chairman also has responsibility for assessing the individual Board members'
training requirements. No significant findings were identified in the 2025
evaluation which required further action.
The Directors remain mindful of the benefits which can flow from increasing
the level of diversity represented on the Board including, but not limited to,
cultural, gender, experience and background. Such factors will be taken into
consideration by the Nomination Committee during any selection process.
Executive Management Team
As at the year end, the Company's Executive Management Team comprised Rory
Mepham (Chief Executive Officer), Keith Lawrence (Chief Financial Officer),
and James Waghorn (Chief Investment Officer) (together the "Executive
Management Team" or "Management"). Management are responsible for the
day-to-day management of the Company's operations. The non-executive
independent Directors monitor and evaluate the performance of Management on an
ongoing basis.
Audit and Risk Committee
The Audit and Risk Committee conducts formal meetings at least twice a year.
The Audit and Risk Committee's key duties include:
· Monitoring the integrity of the financial statements of the
Group, including its annual and half-yearly reports and any other formal
announcement relating to its financial performance, reviewing, challenging
(where necessary) and reporting to the Board on significant financial
reporting issues and judgements which they contain having regard to matters
communicated to it by the auditor, and how they were addressed.
· Reviewing the Group's internal financial controls and the Group's
internal control and risk management systems.
· Making recommendations to the Board for it to put to the
shareholders for their approval in general meeting in relation to the
appointment, re-appointment or removal of the external auditor and to
recommend the remuneration and terms of engagement of the external auditor.
· Monitoring the external auditor's independence and objectivity
and the effectiveness of the audit process, taking into account relevant
professional and regulatory requirements.
· In conjunction with executive management, advise the Board on the
overall risk appetite, tolerance and strategy of the Group, current risk
exposures and future risk strategy.
· Keep under review the Group's overall risk assessment processes
that inform the Board's decision making, ensuring both qualitative and
quantitative metrics are used.
The Audit and Risk Committee has three members, two of whom are independent,
non-executive directors and one of whom is a non-executive director, and at
least one member has recent and relevant financial experience. The current
members of the Committee are John Whittle as the Chairman, Steve Smith and
Tracy Clarke.
The Audit and Risk Committee is supported by a risk management and oversight
process employed by the Executive Management Team and receives reports twice a
year on key risks and developments during the period, or as otherwise required
in the case of a material development.
The terms of reference of the Audit and Risk Committee are available from the
Company Secretary.
Remuneration and Nomination Committee
The purpose of the Remuneration and Nomination Committee is to determine and
agree with the Board the framework or broad policy for the remuneration of the
Company's Directors, senior executives, and any bonus-related arrangements in
place by the Company as well as to consider the structure, size and
composition of the Board. The key duties of the Remuneration and Nomination
Committee include:
· Determining and agreeing with the Board the framework or broad
policy for the remuneration of the Company's Chairman, executive and
non-executive directors and such other members of the management as it is
designated to consider.
· Reviewing the ongoing appropriateness and relevance of the
remuneration policy.
· Reviewing the structure, size and composition of the Board.
· Considering the succession planning for Directors and the
Executive Management Team.
· Reviewing the leadership needs of the organisation.
· Identifying candidates for appointment to the Board.
The Remuneration and Nomination Committee has three members, all of whom are
non-executive directors and two are independent. The current members of the
committee are John Whittle as the Chairman, Steve Smith and Tracy Clarke.
The terms of reference of the Remuneration and Nomination Committee are
available from the Company Secretary. Please refer to the Remuneration Report
on page 26 for details of fees paid to the Directors during the year.
Meetings and attendance
The Directors meet on a quarterly basis ('Quarterly' meetings per the table
below) and at other unscheduled times ('Other' meetings per the table below)
when necessary to assess Group operations and the setting and monitoring of
strategy and performance.
The table below, details the attendance of the Board at eligible Board and
Committee meetings during the year, noting that certain Directors retired or
were appointed during the course of the year as set out below the table:
Board
Remuneration & Nomination Committee Audit and Risk Committee
Quarterly Other
Total number of meetings held during the year 4 5 1 2
Steve Smith 4 of 4 3 of 5 1 of 1 2 of 2
John Whittle 4 of 4 4 of 5 1 of 1 2 of 2
Tracy Clarke 4 of 4 3 of 5 1 of 1 2 of 2
Rory Mepham 4 of 4 4 of 5 N/A 1 of 2*
*by invite only
Relations with Stakeholders
The Board's advisers and the Executive Management Team maintain regular
dialogue with key shareholders, the feedback from which is reported to the
Board and the Chairman. Shareholders who wish to communicate with the Board
should contact the Company Secretary in the first instance, whose contact
details can be found on page 82.
The Board also regularly monitors the shareholder profile of the Company. All
shareholders have the opportunity to and are encouraged to attend the
Company's annual general meeting at which members of the Board are available
in person to meet shareholders and answer questions.
Whilst the primary duty of the Directors is owed to the Company as a whole,
the Board takes into consideration the interests of all key stakeholder groups
as part of its decision-making process and particular consideration is given
to the impact of any decision on holders of its securities, the Co-Funders to
the underlying loan businesses, and providers of the Group's long-term debt
capital. The Board also recognises the crucial roles played by those involved
throughout the Group's operations who contribute to delivering strategy,
including staff and key service providers, to ensure a continued alignment of
interests between their activities and those of the Company.
Terms of Reference of Committees
Committee Terms of Reference are available from the Company Secretary.
AUDIT AND RISK COMMITTEE REPORT
The Audit and Risk Committee
The Audit and Risk Committee has a formal terms of reference mandate
documenting the duties and responsibilities which it has been delegated by the
Board. These are available from the Company Secretary. The Audit and Risk
Committee has been in operation throughout the year under review.
Chairman and Membership
The Audit and Risk Committee comprises of John Whittle as Chairman, Steve
Smith and Tracy Clarke. Only Non-Executive Directors serve on the Audit and
Risk Committee and members of the Audit and Risk Committee have no links with
the Company's external auditor and are independent of the Executive Management
Team. The Audit and Risk Committee meets not less than twice a year in
Guernsey and meets the external auditor at least twice a year virtually. The
identity of the Chairman of the Audit and Risk Committee is reviewed on an
annual basis and the membership of the Audit and Risk Committee, and its terms
of reference are kept under review. Regular attendees at the Audit and Risk
Committee include the CEO, CFO and CIO.
Duties
The Audit and Risk Committee is responsible for monitoring the financial
reporting process, including the appropriateness of the Company's accounting
policies and the effectiveness of the Company's risk management and internal
control systems. The Committee continues to spend a considerable amount of
time reviewing significant risks and areas of judgement. In particular, the
Committee conducts detailed reviews and analysis of the valuations prepared by
the Executive Management Team of the FinTech Ventures investments, the
investment in JV value in use models to assess if any impairment might be
required and the Expected Credit Loss model. These valuations are key elements
in the Group's financial statements and the Audit and Risk Committee questions
these carefully.
External Audit
The Audit and Risk Committee is responsible for overseeing the relationship
with the external auditor, including the ongoing assessment of the auditor's
independence. The Committee makes recommendations to the Board with regard to
the appointment of the external auditor and approves their terms of engagement
and fees. The Committee discusses and agrees the nature and scope of the audit
as set out in the audit scoping report, reviews the results of the audit as
described in the audit completion report and the ongoing independence and
objectivity of the external auditor.
Processes are in place to safeguard the independence of the external auditor,
including controls around the use of the external auditor for non-audit
services. The external auditor also provides the Audit and Risk Committee with
further assurance as to the procedures that it maintains to preserve
objectivity and confirmation that it remains independent. All non-audit
services are pre-approved by the Audit and Risk Committee. No non-audit
services were provided in the year.
Effectiveness of External Auditor
The Committee assessed the effectiveness of the external auditor and the
external audit process for 2025 through a number of steps, including:
· Agreement of their engagement letter and fees.
· Review of the external audit plan.
· Meetings with the external auditors.
· Considering the extent of any non-audit services provided by the
external auditors.
· Considering the external auditors' fulfilment of the agreed audit
plan and variations from it.
· Considering the report from the auditor highlighting any major issues
that arose during the course of the audit.
· Conducting interviews to obtain feedback from the Executive
Management Team to evaluate the performance of the audit team.
For the audit for the year ended 31 December 2025, the Audit and Risk
Committee was satisfied that the audit was effective and that there were no
factors which had any bearing on the independence or effectiveness of the
external auditor.
Financial Reporting
The Audit and Risk Committee reviews, considers and, if thought appropriate,
recommends to the Board the approval of the contents of the half yearly report
and annual report and audited financial statements together with the external
auditor's report thereon. It focuses particularly on compliance with legal
requirements and accounting standards. The ultimate responsibility for
reviewing and approving the half year report and annual report and audited
financial statements remains with the Board.
The Audit and Risk Committee provides a forum through which the external
auditor reports to the Board and the external auditor is invited to attend
Audit and Risk Committee meetings at which annual and half yearly financial
statements are considered. After discussions with the Executive Management
Team and external auditor, the Audit and Risk Committee determined that the
key risks of misstatement of the Group's financial statements relate to the
valuation of financial assets at fair value through profit or loss, the
valuation and recoverability of the investment in JV, loan impairments and
revenue recognition.
Freely tradeable market prices are not available for the majority of the
Group's financial assets, including the carrying value of the investment in
JV, which are therefore based on a discounted cash flow basis. Investment in
JV impairment testing is carried out annually or sooner where an indicative
event of impairment has been identified. As set out in Note 10 to the
financial statements, on 5 December 2023, the Group sold its Jersey operations
in exchange for a 50% shareholding in a new joint venture, Hawkbridge Limited.
The goodwill attributable to these Jersey operations has therefore been fully
transferred to Hawkbridge Limited as part of the consideration.
For the valuations of the FinTech Ventures portfolio, the Executive Management
Team provides a detailed valuation report on a quarterly basis. The Executive
Management Team has confirmed to the Audit and Risk Committee that the
valuation methodology has been applied consistently during the year. The
accounting policies are described in detail in Note 2 (f) to the financial
statements.
The Audit and Risk Committee has assessed the processes around the expected
credit loss provisions recorded in respect of the Group's loan assets and
reviewed the IFRS 9 model adopted at year-end which has been approved by the
credit committee.
The accounting policies for revenue recognition are described in detail in
Note 2 (o) to the financial statements. The Audit and Risk Committee has
reviewed the revenue recognition policies of the Group and has determined that
they are in accordance with the accounting standards and have been applied
consistently.
After due consideration, the Audit and Risk Committee recommends to the Board
that the Annual Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group and Company's performance, business model and
strategy.
Non-Audit and audit related fees paid to the External Auditors
During 2025 no non-audit fees were paid to Moore Kingston Smith LLP, the
external auditors. £25,500 was paid to Moore Kingston Smith LLP for audit
related services, being the half year review. There is no perceived threat to
auditor independence given the nature of the services provided and the
safeguards in place.
Risk Management and Internal Control Systems
During 2025, management continued to enhance its reporting on risk management
to the Board and the Audit and Risk Committee, which cover the operation of
the Company, its wholly owned subsidiaries and JV. The Audit and Risk
Committee has received and considered these reports on three occasions, which
has been the basis for its conclusion below.
In addition to the review of risk management reports, and in accordance with
the guidance published in the Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting by the Financial Reporting
Council (the "FRC"), the Audit and Risk Committee has reviewed the Company's
internal control procedures and concluded that these are adequate to manage
the current risk profile.
A robust, ongoing process of Risk Management and Internal Control
The Board and Executive Management Team are responsible for safeguarding the
assets of the Group through establishing effective systems of risk management
and internal control. This responsibility is shared by the Directors of
subsidiary companies, who are similarly responsible for safeguarding the
assets of these companies.
The Board is also responsible for deciding on whether the nature and extent of
risks taken within the Group are within its risk appetite. Such risks have
been formally defined (refer page 9), setting the basis for the design and
implementation of the Group's internal control framework.
On behalf of the Board, the Audit and Risk Committee oversees the Group's risk
management and internal control systems. These systems are designed to ensure
proper accounting records are maintained and that internal and published
financial information is reliable, and that the assets of the Group are
safeguarded. Such a system of internal controls can only provide reasonable
and not absolute assurance against misstatement or loss.
Critical components of the Group's internal control framework include the
documented policies which describe how each risk is to be managed and governed
and the governance committees established in terms of such policies, which
have mandates describing how they should operate, what reports they should
receive and how they should govern the management of principal risks. Such
policies have been implemented at Company as well as subsidiary levels.
On a semi-annual basis, the Executive Management Team review the key risks
across the Group to ensure they are being managed within the Company's risk
appetite. Action plans are drawn up if any risks are considered to be outside
of the Company's risk appetite and these are monitored on a regular basis
until they return to levels back within the risk appetite.
On a semi-annual basis, the Board and/or Audit and Risk Committee receive
reports on risk management, the key risks and the exposures outstanding. Also
included in these reports are the results of the Executive Management Team's
risk and issue identification discussions noted above. These meetings also
provide the Directors with the opportunity to consider any other issues which
management may not have identified and give direction on any additional risk
management actions which might be required.
Insurance
The Sancus and subsidiaries insurance programme is subject to annual review
each year, with cover generally renewed in April of the following year. A
significant amount of Insurance cover is held for Public Indemnity, Directors'
and Officers' liability, Cyber, and Crime. Appropriate office and travel
insurance is also in place.
During 2025, the Committee did not receive any reports relating to
whistleblowing across the Group.
On behalf of the Audit and Risk Committee
John Whittle
Chairman
Audit and Risk Committee
18 March 2026
REMUNERATION REPORT
Introduction
An ordinary resolution for the approval of the annual remuneration report will
be put to the shareholders at the annual general meeting to be held in 2026.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee comprises of John Whittle as
Chairman, Steve Smith and Tracy Clarke. The key duties include, but are not
limited to, agreeing a framework for Director remuneration, ensuring
management staff are appropriately incentivised to enhance performance, and
reviewing the effectiveness of the remuneration policy on an on-going basis.
No Director is involved in determining their own remuneration.
Remuneration Policy
In February 2020 the Remuneration Policy was approved and adopted. The Company
is committed to the objective of maximising shareholder return in the longer
term. The remuneration policy aims to be competitive, aligned with shareholder
interests and relatively simple and transparent. The Board takes into
consideration the views of significant shareholders when determining the
remuneration of directors.
The objective is to put in place a new remuneration package that, as a whole:
· Aligns the interests of employees with that of shareholders and
the success of the Company.
· Is appropriately benchmarked, such that it aids retention and
recruitment.
· Meets applicable legal or regulatory requirements, is tax
efficient and simple to implement and administer.
The Board is currently reviewing the Remuneration Policy against these
objectives.
The Policy is divided into two parts; the first part in relation to the
remuneration of the non-executive directors of the Company, and the second
part in relation to the remuneration of the Executive Directors of the
Company.
Part 1 - Remuneration Policy of Non-Executive Directors
Each Non-Executive Director receives a fixed fee per annum based on their
role and responsibility within the Company and the time commitment required.
It is not considered appropriate that Non-Executive Directors' remuneration
should be performance related and none of the Non-Executive Directors are
eligible for pension benefits, share options, long-term incentive schemes or
other benefits in respect of their services as non-executive directors of the
Company. Shares held by the Non-Executive Directors are disclosed in the
Annual Report.
Pursuant to Article 30.3 of the Company's Articles of Incorporation (the
"Articles") the Board may award additional remuneration to any Director
engaged in exceptional work at the request of the Board on a time spent basis
to compensate for the additional time spent over their expected time
commitment.
The total remuneration of the Non-Executive Directors has not exceeded the
£300,000 per annum limit (excluding amounts payable in respect of any
out-of-pocket expenses pursuant to Article 30.2 or any additional remuneration
awarded pursuant to Article 30.3) pursuant to an ordinary resolution passed at
the Annual General Meeting of the Company held on 19 May 2016.
The Articles provide that Non-Executive Directors retire and offer themselves
for re-election‑ at the first annual general meeting after their
appointment and at least every three years thereafter. A Non-Executive
Director's appointment may at any time be terminated by and at the discretion
of either party upon three months' written notice. A Non-Executive Director's
appointment will terminate immediately without notice (or payment in lieu of
notice) if such director is not re-appointed at a General Meeting of the
Company (if required under the Articles), if such director is removed as a
director at a General Meeting of the Company, or if such director resigns or
ceases to be a director in accordance with the provisions of the Articles.
The terms and conditions of appointment of each Non-Executive Director are
available for inspection at the Company's registered office.
The last independent remuneration review was carried out in July 2014. A Long
Term Incentive Plan was established for Senior Management during 2023, further
details of which are set out below.
For comparative purposes the table below sets out the Non-Executive Directors'
remuneration approved and actually paid for the year to 31 December 2024 as
well as that proposed for the year ended 31 December 2025 (to be approved at
the 2026 AGM).
Director Role Base for 2025 Additional fees for 2025 Total fees for 2025 Base for 2024 Additional fees for 2024 Total fees for 2024
Steve Smith Non-Executive Director and Chairman of the Board £35,000 £15,000 for Chairman of the Board £50,000 £35,000 £15,000 for Chairman of the Board £50,000
John Whittle Non-Executive Director, Chairman of the Audit and Risk Committee and Chairman £35,000 £5,000 for Chairman of the ARC and £2,500 for Chairman of Rem & Nom Co £42,500 £35,000 £5,000 for Chairman of the ARC and £2,500 for Chairman of Rem & Nom Co £42,500
of the Remuneration and Nomination Committee
Tracy Clarke* Non-Executive Director £35,000 - £35,000 £26,250 £32,500 £58,750
Total £105,000 £22,500 £127,500 £96,250 £55,000 £151,250
* Ms. Clarke served as interim Group CFO from 1 January 2024 to 31 March 2024
and received the pro rata portion of an annual salary of £130,000. She then
served as non-executive director from 1 April 2024 to 31 December 2024 and
during which she received a pro-rata portion of her annual fees of £35,000.
Part 2 - Remuneration Policy of Executive Directors (audited)
For comparative purpose the following table sets out remuneration paid to
Executive Directors for the years ended 31 December 2025 and 31 December 2024,
excluding all reasonable expenses incurred in the course of their duties which
were reimbursed by the Company.
31 December 2025 31 December 2024
Director Base Salary Cash Bonus Pension Contribution Long-Term Incentive Scheme (2) Total Base Salary Cash Bonus Pension Contribution Total
Rory Mepham £242,500 £95,000 £12,125 £27,500 £377,125 £231,250 £65,000 £11,563 £307,813
Tracy Clarke ((1)) - - - - - £32,500 - - £32,500
Total £242,500 £95,000 £12,125 £27,500 £377,125 £263,750 £65,000 £11,563 £340,313
( )
(1) As noted above, Ms Clarke served as Interim Group CFO from 30 March 2023
until 31 March 2024.
(2) Represents the value of nil-cost share options that vested in connection
with the LTIP award granted in 2023 and where the vesting conditions relate to
the operating profit achieved for the year ended 31 December 2025. See
additional disclosure below.
Long Term Incentives
The Board introduced a Long Term Incentive Plan ("LTIP") for Senior Management
during 2023. An initial grant of share awards was made to Rory Mepham and
James Waghorn as follows:
Value at grant of share awards No. of shares
Rory Mepham £110,000 22,000,000
James Waghorn £70,000 14,000,000
These share awards vest in 2026, 3 years after grant. The level of vesting was
subject to the achievement of operating profit targets measured up to the end
of the 2025 financial year. Based on the profit before tax achieved for the
year the 25% level of vesting has been achieved.
Operating Profit achieved in year ended 31 December 2025((1)) Level of vesting
Maximum £4m 100%
£3m 75%
£2m 50%
Threshold £1m 25%
Below threshold Below £1m 0%
(1) Defined as operating profit after all debt financing including ZDP and
Bonds, loan loss provisions/recoveries and a provision for other staff cash
bonuses. Operating profit is measured pre-exceptional items and taxation.
The 2024 Annual General Meeting approved share awards to members of the
Executive Management and certain members of senior management. The awards made
to the Executive Management Team were as follows:
Value at grant of share awards No. of shares
Rory Mepham £110,000 22,000,000
James Waghorn £80,000 16,000,000
Keith Lawrence £40,000 8,000,000
These awards will vest in 2027, 3 years after grant, and the level of vesting
will be subject to the achievement of operating profit targets measured up to
the end of the 2026 financial year.
Operating Profit achieved in year ending 31 December 2026((1)) Level of vesting((2))
Maximum £5m 100%
£4m 80%
£3m 60%
£2m 40%
Threshold £1m 20%
Below threshold Below £1m 0%
(1) Defined as operating profit after all debt financing including ZDP and
Bonds, loan loss provisions/recoveries and a provision for other staff cash
bonuses. Operating profit is measured pre-exceptional items and taxation.
(2) The level of vesting between the operating profit thresholds outlined
above shall be adjusted on a sliding scale basis for every £0.1m change in
the level of operating profit achieved between the thresholds outlined above.
The 2025 Annual General Meeting approved share awards to members of the
Executive Management Team and certain members of senior management. The awards
made to the Executive Management were as follows:
Value at grant of share awards No. of shares
Rory Mepham £ 117,500 23,500,000
James Waghorn £ 85,000 17,000,000
Keith Lawrence £ 82,500 16,500,000
This award will vest in 2028, 3 years after grant, and the level of vesting
will be subject to the achievement of operating profit targets measured up to
the end of the 2027 financial year.
Operating Profit achieved in year ending 31 December 2027((1)) Level of vesting((2))
Maximum £5m 100.0%
£4m 73.3%
£3m 46.8%
Threshold £2m 20.0%
Below threshold Below £2m 0%
(1) Defined as operating profit after all debt financing including ZDP and
Bonds, loan loss provisions/recoveries and a provision for other staff cash
bonuses. Operating profit is measured pre-exceptional items and taxation.
(2) The level of vesting between the maximum and minimum operating profit
thresholds shall be adjusted on a sliding scale basis for every £0.1m change
in the level of operating profit achieved.
Proposals for a further grant of share awards to members of the Executive
Management and certain members of senior management will be made to
shareholders for their approval at the 2026 Annual General Meeting.
Discretionary Executive Bonus
£220k of discretionary cash bonuses were paid to the Executive Management
Team in respect of the year ended 31 December 2025 (2024: £185k).
On behalf of the Remuneration Committee
John Whittle
Remuneration Committee Chairman
18 March 2026
DIRECTORS' REPORT
The Directors submit their Report together with the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Shareholders' Equity, the Consolidated
Statement of Cash Flows and the related Notes for the year ended 31 December
2025, which have been prepared in accordance with UK-adopted International
Accounting Standards, in accordance with any relevant enactment for the time
being in force, and are in agreement with the accounting records, which comply
with Section 238 of The Companies (Guernsey) Law, 2008.
Principal Activities
The Company was incorporated and domiciled in Guernsey, as a company limited
by shares and with limited liability on 9 June 2005 in accordance with The
Companies (Guernsey) Law, 1994 (since superseded by The Companies (Guernsey)
Law, 2008). From January 2023 the Company changed its management and control
from Guernsey to Jersey. Until 25 March 2015, the Company was Authorised as a
Closed-ended Investment Scheme and was subject to the Authorised Closed-ended
Investment Scheme Rules 2008 issued by the Guernsey Financial Services
Commission ("GFSC"). On 25 March 2015, the Company was registered with the
GFSC as a Non-Regulated Financial Services Business, at which point the
Company's authorised fund status was revoked. The Company's Ordinary Shares
were admitted to the AIM market of the London Stock Exchange on 5 August 2005.
The ZDPs were listed and traded on the main market of the London Stock
Exchange with effect from 5 October 2015 and following shareholder approval
now have a maturity date of 5 December 2030. The ZDP shares were delisted in
December 2024. The Company's 2021 bonds were repaid on 21 December 2021 and a
total of £12.575m principal of new bonds (the "New Bonds") were issued on 22
December 2021. Somerston subscribed to a further £2.425m bonds on 1 December
2022, £2.0m in December 2024 and £3.3m in December 2025 taking the Company's
aggregated bond principal to £20.3m of which £16.9m is now held by
Somerston. In October 2024 the maturity date of the Bond instrument was
extended to October 2027 from December 2025 and the quarterly coupon increased
to 8% p.a. from 7% p.a. In June
2025, bondholders approved an amendment to the terms of the bonds to
introduce a payment-in-kind interest option, allowing bondholders to elect to
receive interest rolled up and paid on maturity at an increased rate of
8.5% per annum, instead of the 8% cash coupon paid quarterly.
The Company does not have a fixed life and the Articles do not contain any
trigger events for a voluntary liquidation of the Company.
Following the approval by Shareholders at the Company AGM on 19 May 2016, the
Company changed its status from being an investing company for the purpose of
the AIM rules to a trading Company.
The Executive Management Team is responsible for the day-to-day management of
the Company.
The Group
As at 31 December 2025, the Group comprises the Company and the entities
disclosed in Note 20 to the financial statements.
Directors and Executive Management Team of the Company
A list of the Directors and the Executive Management Team who served the
Company during the year and as at the date of this report is shown on pages 16
and 17.
Results and Dividends
The Group results for the year are set out on pages 39-42. No Dividends were
paid during the year (31 December 2024: Nil).
Substantial Shareholdings
As at 31 December 2025, the Company was aware of the following substantial
shareholders who held 3% or more of issued share capital of the Company:
Number of Percentage of total
Ordinary Shares ordinary shares
held issued held
Somerston Group 802,548,928 73.9%
Philip J Milton & Company plc 93,522,450 8.6%
Directors' Interests
As at 31 December 2025, the Directors had the following beneficial interests
in the Ordinary Shares of the Company:
31 December 2025 31 December 2024
No. of Ordinary Shares Held % of Ordinary Shares Held No. of Ordinary Shares Held % of Ordinary Shares Held
John Whittle 2,138,052 0.20 2,138,052 0.37
Rory Mepham 7,000,000 0.64 6,000,000 1.03
Statement of Directors' Responsibilities
The Directors are responsible for preparing the financial statements in
accordance with UK-adopted International Accounting Standards and The
Companies (Guernsey) Law, 2008 for each financial period to give a true and
fair view of the state of affairs of the Group as at the end of the financial
year and of the profit or loss for that period. International Accounting
Standard 1 requires that financial statements present fairly for each
financial period the Group's financial position, financial performance and
cash flows. This requires faithful representation of the effects of
transactions, other events and conditions in accordance with the definitions
and recognition criteria for assets, liabilities, income and expenses set out
in the International Accounting Standards Board's "Framework for the
preparation and presentation of financial statements". In virtually all
circumstances a fair presentation will be achieved by compliance with all UK
adopted International Accounting Standards.
In preparing these financial statements, the Directors are required to:
· Ensure that the financial statements comply with the Memorandum
and Articles of Incorporation and UK-adopted International Accounting
Standards.
· Select suitable accounting policies and apply them
consistently.
· Present information including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable information.
· Make judgements and estimates that are reasonable and prudent.
· Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and the Group will
continue in business.
The Directors confirm that they have complied with the above requirements in
preparing the financial statements.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the financial statements
have been properly prepared in accordance with The Companies (Guernsey) Law,
2008. They are also responsible for safeguarding the assets of the Company and
the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors also confirm that the annual report and financial statements,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group and Company's
performance, business model and strategy.
Internal Controls Review
Taking into account the ongoing work of the Audit and Risk Committee in
monitoring the risk management and internal control systems on behalf of the
Board the Directors, the latter has conducted a robust assessment of the
principal risks and uncertainties faced by the Group as set out on pages 9-11
and is satisfied that each of these has been properly identified and is being
effectively managed through the operation of appropriate internal controls and
risk management systems, within the constraints of the resources of the Group.
Statement as to Disclosure of Information to Auditor
The Directors who held office at the date of approval of this Directors'
Report confirm that:
· There is no relevant audit information of which the Company's auditors are
unaware.
· The Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
Auditor
Moore Kingston Smith LLP have indicated their willingness to continue in
office and a resolution to re-appoint Moore Kingston Smith LLP will be tabled
at the forthcoming AGM.
Going Concern
The Group has reported an operating loss of £1.7m (2024: £2.3m) for the year
and an overall profit of £1.0m (2024: £nil). As at 31 December 2025 the
Group had net assets of £1.1m (2024: net liabilities of £2.1m), including
cash and cash equivalents of £3.2m (2024: £2.5m).
The Directors have considered the going concern basis in the preparation of
the financial statements as supported by the Directors' assessment of the
Company's and Group's ability to pay its liabilities as they fall due and have
assessed the current position and the principal risks facing the business with
a view to assessing the prospects of the Company. The Directors have prepared
a cash flow forecast for the period to 30 June 2027 which shows that the
Company and the Group will have sufficient cash resources to meet their
ongoing liabilities as they fall due for at least twelve months from the date
of approval of these financial statements. Following an extension to the
maturity date of preference shares in issue by one of the Company's loan
financing subsidiaries, the Company does not have any debt liabilities that
fall due or expire within the next 12 months. Based on this the Group has
adequate financial resources to continue in operation and meet its liabilities
as they fall due for the foreseeable future.
It is expected that equity or junior capital may be required to facilitate an
increase in drawdowns from the institutional funding lines that the Company
has. The Company's largest shareholder, Somerston has entered into a junior
capital commitment which supports the Company's growth plans. The Company will
be looking at other options available to raise such additional growth capital
over the course of the year if or as required.
The Directors therefore believe it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
Board Succession
The Directors remain focussed on ensuring the Board is comprised of
individuals with the requisite skills, knowledge, experience and diversity to
operate effectively and to meet the future leadership needs of the Company.
Independent auditor's report to the members of Sancus Lending Group Limited
Opinion
We have audited the Group financial statements of Sancus Lending Group Limited
(the 'Group') for the year ended 31 December 2025 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows, and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK-adopted
International Accounting Standards.
In our opinion the Group financial statements:
· give a true and fair view of the state of the group's affairs as
at 31 December 2025 and of the group's profit for the year then ended;
· have been properly prepared in accordance with UK-adopted
International Accounting Standards; and
· have been prepared in accordance with the requirements of the
Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the
audit of the financial statements section of our report. We are independent of
the group, in accordance with the ethical requirements that are relevant to
our audit of the financial statements in Guernsey, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough
understanding of the group's business, its environment and risk profile. We
conducted substantive audit procedures and evaluated the group's internal
control environment. We also addressed the risk of management override of
internal controls, including assessing whether there was evidence of bias by
the directors that may have represented a risk of material misstatement. The
components of the group were evaluated by the group audit engagement team
based on a measure of materiality, considering the group's composition and
understanding the group and each component, which allowed the group audit
engagement team to assess the significance of each component by identifying
and assessing the risks of material misstatement and to determine the planned
audit response. The components were classified either as full scope, limited
scope or out-of-scope based on the risk-based approach required under ISA 600
Audits of Group Financial Statements (Including the Work of Component
Auditors).
For those components that were evaluated as requiring a full scope audit, we
evaluated controls by performing walkthroughs over the financial reporting
systems identified as part of our risk assessment, reviewed the accounts
production process and addressed critical accounting matters. We then
undertook substantive testing on a number of classes of transactions, account
balances or disclosures which represented risks of material misstatement at
the assertion level for the group financial statements, including a number
of significant audit risks. We determined there to be five full scope
components to the group, which were Sancus Lending Group Limited, Sancus
Holdings (UK) Limited, Sancus Lending (UK) Limited, Sancus Loans Limited and
Sancus Lending (Ireland) Limited. Limited scope components were subject to
targeted audit procedures based on the level of risk in the context of the
group as a whole.
Significant elements of the group's operations are located in the United
Kingdom. Component audit teams in the UK performed full scope audits of
relevant UK components; the audits of Sancus Holdings (UK) Limited, Sancus
Lending (UK) Limited and Sancus Loans Limited were completed by another office
of Moore Kingston Smith LLP. A component audit team in Ireland from Moore
Ireland Audit Partners Limited performed the full scope audit of Sancus
Lending (Ireland) Limited,. These audits were completed under the supervision
and direction of the group audit engagement team, as described in more detail
below. The remaining full scope component, namely the parent company Sancus
Lending Group Limited was audited by the group audit engagement team.
Our involvement with the component auditors
As part of our supervision and direction of the component audit teams, we
determined the level of involvement required in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained in respect of
the United Kingdom and Irish components as a basis for our opinion on the
group financial statements as a whole. Our involvement with the component
auditors included the following:
· We issued detailed group reporting instructions to the component
auditors, which included the significant areas to be covered by the audit
(including areas that were considered to be key audit matters as detailed
below) and set out the information required to be reported to the group audit
engagement team.
· The group audit engagement team performed reviews of relevant
working papers and performed additional audit work where necessary for
instance in respect of the significant risk areas that represented Key Audit
Matters for the group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the group financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the group
financial statements, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Audit Matter Procedures
Assessment of carrying value of investment in Joint ventures. Our audit work included, but was not restricted to, the following procedures:
As at 31 December 2025 the carrying value of the investment in joint ventures · We critically assessed management's accounting treatment of the
was £14.740m (2024: £14.379m) representing 7.6% (2024: 11.78%) of the joint ventures in the financial statements to determine whether it complied
group's total assets. with the requirements of IFRS 11.
We identified this balance as a significant risk area given its material · We obtained management's assessment of whether there are any
nature and the subjectivity in determining it's carrying value. Consequently indicators of impairment of the investment in the joint venture.
the valuation of investments in joint ventures was considered to be a key
audit matter.
· We critically assessed the arithmetic accuracy of the DCF Capital
Asset Pricing Model prepared by management in forming the above assessment.
· We critically assessed the inputs into the DCF Capital Asset
Pricing Model and obtained supporting evidence and documentation for the
assumptions used in the DCF Capital Asset Pricing Model.
· We performed sensitivity analysis on the key assumptions used in
the DCF Capital Asset Pricing Model.
· We evaluated the accounting policy and detailed disclosures in
the notes to the financial statements to determine whether information
provided in the financial statements is compliant with the requirements of
relevant financial reporting standards including IFRS 11 and IAS 36.
Based on our audit work performed we have not identified any material
misstatement in the valuation of joint venture investments.
We consider the disclosures in the financial statements relating to this area
to be in accordance with the requirements of the relevant financial reporting
standards.
Audit Matter Procedures
Impairment and recoverability of loans receivable Our audit work included, but was not restricted to, the following procedures:
At 31 December 2025 the value of loans and loan equivalents in the financial · We obtained an understanding of the significant controls over the
statements was £157.708m (2024: £92.704m) representing 80.9% of total assets loans impairment process.
(2024:75.9%). The loan portfolio comprises property backed loans and direct
exposure to loans through co-investment alongside third party lenders.
· We performed a walkthrough of the impairment process including
testing of the operation of the relevant controls.
The group has also provided a first loss guarantee as part of the Sancus Loan
Note structures. The value of these assets are also supported by the
underlying loan book. Management is required to assess loans for impairment,
including the application of the expected credit loss ('ECL') model under IFRS · We critically assessed the reasonableness of management's
9. allocation of loans to the various stages under IFRS 9 including an assessment
of management's definition of significant increase in credit risk and
definition of default.
In making this assessment, management makes several significant judgements.
These include determining appropriate assumptions for calculating the loss
allowance under IFRS 9 (including probability of default and loss given · We critically assessed management's assumptions in respect of the
default), as well as loan-specific matters including cash flow forecasts and recoverability of non-performing loans.
covenant compliance, specifically related to loan to value (LTV) ratio. As a
result, errors or deliberate manipulation of these determining factors could
result in material misstatement of the financial statements. Consequently it
was considered to be a key audit matter. · We critically assessed management's judgements and estimates in
determining the probability of default ('PD'), determining the loss given
default ('LGD') and exposure at default ('EAD') for each stage within which
loans are classified.
· We performed sample testing of inputs used in the Loans
Monitoring Report ('LMS').
· We critically assessed the accounting policy and detailed
disclosures in the financial statements to determine whether information
provided in the financial statements is compliant with the requirements of
IFRS 9.
Based on our audit work performed we have not identified any material
misstatement in the impairment and recoverability of loans.
We consider the disclosures in the financial statements relating to this area
to be in accordance with the requirements of IFRS 9.
Revenue recognition Our audit work included, but was not restricted to, the following procedures:
The group's revenue for the year ended 31 December 2025 was £22,104m (2024: · We obtained and documented an understanding of the methodology
£16.776m) being interest income and fees enforced as per the lending for recognising revenue to determine whether it was appropriate.
agreements.
· We critically assessed the group's revenue recognition accounting
Revenue recognition is a presumed significant risk and is material to the policy to assess compliance with IFRS 15.
financial statements. Consequently it was considered to be a key audit matter.
· We performed substantive testing on a sample of individual
revenue transactions throughout the year to evaluate whether revenue is
recognised in accordance with the loan contract terms and the requirements of
IFRS 15.
· We performed substantive testing of a sample of interest income
selected from the Loans Monitoring Reports by recalculating the interest
amount and comparing it to the interest income recognised.
Audit Matter Procedures
· We performed revenue cut off testing to ensure revenue has been
recognised in the correct accounting period.
· We performed analytical review to critically assess the level of
interest income.
· We critically assessed the disclosures in the financial
statements to determine whether the accounting policy and other revenue
disclosures comply with the disclosure requirements of IFRS 15.
Based on our audit work performed we have not identified any material
misstatement in the recognition of revenue.
We consider the disclosures in the financial statements relating to this area
to be in accordance with the requirements of IFRS 15.
Our application of materiality
The scope and focus of our audit were influenced by our assessment and
application of materiality. We define materiality as the magnitude of
misstatement that could reasonably be expected to influence the readers and
the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit and the nature, timing, and
extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole. We apply the
concept of materiality both in planning and performing our audit, and in
evaluating the effect of misstatements.
Based on our professional judgement we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements
Materiality £1,948,000
Basis for determining materiality Gross assets
Rationale for the benchmark applied The group is an asset-based operation. Assets (loans) drive the group's
revenue. Consequently gross assets was considered likely to be the metric on
which the users of the financial statements will place most focus.
Performance materiality £974,000
Basis for determining performance materiality 50% of overall materiality.
Trivial threshold £97,400
Basis for determining trivial threshold 5% of overall materiality
Performance materiality:
We calculated performance materiality at a level lower than materiality to
reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality level for the Group consolidated
financial statements as a whole. We determined performance materiality to be
£974,000, which was set at 50% of overall materiality and reflects the
group's listed status.
Component materiality:
We set materiality for each component of the group based on a percentage of
group materiality dependent on the size and our assessment of risk of material
misstatements of that component. Component materiality, other than the parent
company's, ranged from £528,000 to £1,703,000. In the audit of each
component, we further applied performance materiality levels of 50% of the
component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated.
Trivial:
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £97,400 for the group based on 5% of overall
group materiality. We also agreed to report differences below this threshold
that, in our view, warranted reporting on qualitative grounds. We also
reported to the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
Conclusions relating to Going Concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's ability to continue to adopt the going concern basis
of accounting included, but was not limited to:
· Critically assessing the going concern assessment prepared by
management covering at least twelve months from the date of approval of the
financial statements and challenging the client as regards the key
assumptions and forecasts used in their assessment;
· Performing sensitivity analysis on the cash flow forecast to
determine the level of headroom for the group to continue as a going concern
for at least twelve months from the date of approval of the financial
statements; and
· Reviewing the post year end trading performance of the group and
comparing it to the forecasts prepared by management to assess their accuracy;
and Assessing the adequacy of the going concern disclosures in the financial
statements.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's ability to continue as
a going concern.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report,
other than the Group financial statements and our auditor's report thereon.
The directors are responsible for the other information contained within the
annual report. Our opinion on the group financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the group financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Group
financial statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the group financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters where the
Companies (Guernsey) Law, 2008 requires us to report to you if, in our
opinion:
· we have not received all the information and explanations we
require for our audit; or
· proper accounting records have not been kept by the parent
company; or
· the financial statements are not in agreement with the
accounting records.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 30, the directors are responsible for the preparation of the group
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of group financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the Group financial statements, the directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the Group financial statements
Our objectives are to obtain reasonable assurance about whether the group
financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users
taken on the basis of these Group financial statements.
A further description of our responsibilities is available on the FRC's
website at
https://wwww.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor's-responsibilities-for
(https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-for)
This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess
the risks of material misstatement of the group financial statements due to
fraud; to obtain sufficient appropriate audit evidence regarding the assessed
risks of material misstatement due to fraud, through designing and
implementing appropriate responses to those assessed risks; and to respond
appropriately to instances of fraud or suspected fraud identified during the
audit. However, the primary responsibility for the prevention and detection of
fraud rests with both management and those charged with governance of the
Group.
Our approach was as follows:
· We obtained an understanding of the legal and regulatory
requirements applicable to the group and considered that the most significant
are the Companies (Guernsey) Law, 2008, UK-adopted International Accounting
Standards, the rules of the Alternative Investment Market, and relevant
taxation legislation.
· We obtained an understanding of how the group complies with these
requirements by discussions with management and those charged with governance.
· We assessed the risk of material misstatement of the group
financial statements, including the risk of material misstatement due to fraud
and how it might occur, by holding discussions with management and those
charged with governance.
· We inquired of management and those charged with governance as to
any known instances of non-compliance or suspected non-compliance with laws
and regulations.
· Based on this understanding, we designed specific appropriate
audit procedures to identify instances of non-compliance with laws and
regulations. This included making enquiries of management and those charged
with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the Group financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has
been undertaken so that we might state to the company's members those matters
we are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Matthew Banton
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6th Floor
9 Appold Street
London
EC1A 2AP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes 2025 2024
£'000 £'000
Revenue 5 22,104 16,776
Cost of sales 6 (14,827) (11,172)
Gross profit 7,277 5,604
Operating expenses 7 (7,076) (5,991)
Group borrowing costs 8 (2,086) (2,331)
Changes in expected credit losses 22 227 402
Operating loss (1,658) (2,316)
Other net gains 9 2,451 2,736
Share of net profit / (loss) of joint ventures accounted for using the equity 10 361 (290)
method
Profit for the year before tax 1,154 130
Income tax expense 18 (204) (130)
Profit for the year after tax 950 -
Items that may be reclassified subsequently to profit and loss
Foreign exchange gain / (loss) arising on consolidation 145 (85)
Other comprehensive income / (loss) for the year after tax 145 (85)
Total comprehensive income / (loss) for the year 1,095 (85)
Basic earnings per share 11 0.16p 0.00p
Diluted earnings per share 11 0.16p 0.00p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS Notes 2025 2024
£'000 £'000
Non-current assets
Property, plant and equipment 12 821 473
Other intangible assets 13 - -
Sancus loans and loan equivalents 22 37,848 7,373
FinTech Ventures investment 22 - -
Other investments 14 350 100
Investments in equity-accounted joint ventures and associates 10 14,740 14,379
Total non-current assets 53,759 22,325
Current assets
Sancus loans and loan equivalents 22 119,860 85,331
Trade and other receivables 15 18,221 11,937
Cash and cash equivalents 3,164 2,529
Total current assets 141,245 99,797
Total assets 195,004 122,122
EQUITY
Share capital 16 - -
Share premium 16 120,380 118,340
Treasury shares 16 (1,172) (1,172)
Other reserves (118,134) (119,229)
Capital and reserves attributable to equity holders of the Group 1,074 (2,061)
Total equity 1,074 (2,061)
LIABILITIES
Non-current liabilities
Borrowings 186,346 121,158
Lease liabilities 605 423
Total non-current liabilities 17 186,951 121,581
Current liabilities
Trade and other payables 4,561 1,296
Hedging contracts - 2
Tax liabilities 88 10
Provisions - 11
Lease liabilities 137 20
Interest payable 2,193 1,263
Total current liabilities 17 6,979 2,602
Total liabilities 193,930 124,183
Total equity and liabilities 195,004 122,122
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Note Share Premium Treasury Shares Warrants Outstanding Foreign Exchange Retained Earnings/ Capital and reserves attributable to
Reserve (Losses) equity holders of
the Company
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2025 118,340 (1,172) - (70) (119,159) (2,061)
Issue of shares 2,040 - - - - 2,040
Total comprehensive income for the year - - - 145 950 1,095
Balance at 31 December 2025 120,380 (1,172) - 75 (118,209) 1,074
Balance at 1 January 2024 118,340 (1,172) - 15 (119,159) (1,976)
Total comprehensive loss for the year - - - (85) - (85)
Balance at 31 December 2024 118,340 (1,172) - (70) (119,159) (2,061)
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes
2025 2024
£'000 £'000
Cash flow from operations, excluding loan movements 19 (2,455) (3,967)
(Increase) / decrease in Sancus loans (94) 74
Increase in Sancus Loans Limited loans (64,910) (14,013)
Investment in Sancus Loan Notes (250) (50)
Net cash flows used in operating activities (67,709) (17,956)
Investing activities
Investment in joint venture (250) (564)
Property, plant and equipment and other intangibles acquired (97) (20)
Net cash outflow from investing activities (347) (584)
Financing activities
Drawdown of Pollen facility 19 61,505 12,250
Drawdown of Paragon facility 19 500 -
Drawdown of Irish loan note 19 - 827
Capital element of lease payments 19 (113) (296)
Issue of preference shares 19 4,650 5,000
Issue of bonds 19 3,988 2,003
Debt issue costs 19 (595) (117)
Purchase of ZDPs 19 (1,389) (3,503)
Net cash generated by financing activities 68,546 16,164
Effects of foreign exchange 145 (85)
Net increase / (decrease) in cash and cash equivalents 635 (2,461)
Cash and cash equivalents at beginning of year 2,529 4,990
Cash and cash equivalents at end of year 3,164 2,529
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Sancus Lending Group Limited (the "Company"), together with its subsidiaries,
(the "Group") was incorporated, and domiciled in Guernsey, Channel Islands, as
a company limited by shares and with limited liability, on 9 June 2005 in
accordance with The Companies (Guernsey) Law, 1994 (since superseded by The
Companies (Guernsey) Law, 2008). Until 25 March 2015, the Company was an
Authorised Closed-ended Investment Scheme and was subject to the Authorised
Closed-ended Investment Scheme Rules 2008 issued by the Guernsey Financial
Services Commission ("GFSC"). On 25 March 2015, the Company was registered
with the GFSC as a Non-Regulated Financial Services Business ("NRFSB"), at
which point the Company's authorised fund status was revoked. The Company's
Ordinary Shares were admitted to trading on the AIM market of the London Stock
Exchange on 5 August 2005 and its issued zero dividend preference shares were
listed and traded on the Standard listing Segment of the main market of the
London Stock Exchange with effect from 5 October 2015. The Company completed
the cancellation of its zero dividend preference shares listing on the London
Stock Exchange main market on 11 December 2024. The Company changed where its
business is managed and controlled, from Guernsey to Jersey, effective 1 April
2023. The Board agreed that the Company should revoke its NRFSB status, which
was completed on 23 June 2023.
The Company does not have a fixed life and the Articles do not contain any
trigger events for a voluntary liquidation of the Company. The Company is an
operating company for the purpose of the AIM rules. The Executive Management
Team is responsible for the management of the Company.
As at 31 December 2025, the Group comprises the Company and its subsidiaries
(Note 20).
The Company has taken advantage of the exemption conferred by the Companies
(Guernsey) Law, 2008, Section 244, not to prepare company only financial
statements.
2. ACCOUNTING POLICIES
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards, and all applicable requirements
of Guernsey Company Law. The financial statements have been prepared under the
historical cost convention, as modified for the measurement of investments at
fair value through profit or loss. Monetary amounts are expressed in pound
sterling and are rounded to the nearest thousand. With the exception of any
new and amended accounting standards which require policy changes, detailed in
Note 2 (v), the principal accounting policies of the Group have remained
unchanged from the previous year and are set out below. Comparative
information in the primary statements is given for the year ended 31 December
2024.
The Group does not operate in an industry where significant or cyclical
variations, as a result of seasonal activity, are experienced during any
particular financial period.
Going Concern
The Group has reported an operating loss of £1.7m (2024: £2.3m) for the year
and an overall profit of £1.0m (2024: £nil). As at 31 December 2025 the
Group had net assets of £1.1m (2024: net liabilities of £2.1m), including
cash and cash equivalents of £3.2m (2024: £2.5m).
The Directors have considered the going concern basis in the preparation of
the financial statements as supported by the Directors' assessment of the
Company's and Group's ability to pay its liabilities as they fall due and have
assessed the current position and the principal risks facing the business with
a view to assessing the prospects of the Company. The Directors have prepared
a cash flow forecast for the period to 30 June 2027 which shows that the
Company and the Group will have sufficient cash resources to meet their
ongoing liabilities as they fall due for at least twelve months from the date
of approval of these financial statements. Following an extension to the
maturity date of preference shares in issue by one of the Company's loan
financing subsidiaries, the Company does not have any debt liabilities that
fall due or expire within the next 12 months. Based on this the Group has
adequate financial resources to continue in operation and meet its liabilities
as they fall due for the foreseeable future.
It is expected that equity or junior capital may be required to facilitate an
increase in drawdowns from the institutional funding lines that the Company
has. The Company's largest shareholder, Somerston has entered into a junior
capital commitment which supports the Company's growth plans. The Company will
be looking at other options available to raise such additional growth capital
over the course of the year if or as required.
The Directors therefore believe it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
(b) Basis of consolidation
The financial statements comprise the results of Sancus Lending Group and its
subsidiaries for the year ended 31 December 2025. The subsidiaries are all
entities where the Company has the power to control the investee, is exposed,
or has rights to variable returns and has the ability to use its power to
affect these returns. Subsidiaries are fully consolidated from the date on
which control is transferred to the Company. They are deconsolidated from the
date that control ceases. Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year is recognised from the
effective date of acquisition, or up to the effective date of disposal, as
applicable. Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated in full on consolidation.
(c) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held on call with
banks and other short term (three months or less maturity) highly liquid
investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
(d) Dividends
Dividend distributions are made at the discretion of the Company. A dividend
distribution to shareholders is accounted for as a reduction in retained
earnings. A proposed dividend is recognised as a liability in the period in
which it has been approved and declared by the Directors.
(e) Expenditure
All expenses are accounted for on an accruals basis. Management fees,
administration fees, finance costs and all other expenses (excluding share
issue expenses which are offset against share premium) are charged through the
Consolidated Statement of Comprehensive Income.
(f) Financial assets and liabilities
Classification, recognition and initial measurement
Classification and measurement of debt assets is driven by the business model
for managing the financial assets and the contractual cash flow
characteristics of those financial assets. There are three principal
classification categories for financial assets that are debt instruments: (i)
amortised cost, (ii) fair value through other comprehensive income and (iii)
fair value through profit or loss. Equity investments in the scope of IFRS 9
are measured at fair value with gains and losses recognised in profit or loss
unless an irrevocable election is made to recognise gains or losses in other
comprehensive income.
We are a lending business, which participates in financing to borrowers,
Sancus loans, loan equivalents and loans through platforms. As a result all of
these loans/loan equivalents are held solely for the collection of contractual
cash flows, being interest, fees and payment of principal. These assets are
held at amortised cost using the effective interest rate method, adjusted for
any credit loss allowance.
FinTech Ventures investments relate to equity, preference shares and some
working capital loans. Whilst some of these investments attract interest, the
assets are held primarily to assist the development of the entities involved.
These investments are held at fair value with charges recognised in profit or
loss.
Trade payables, financial liabilities and trade receivables are held solely
for the collection and payment of contractual cash flows, being payments of
principal and interest where applicable. Trade receivables are held at
amortised cost using the effective interest rate method, adjusted for any
credit loss allowance. Trade payables and financial liabilities are held at
amortised cost with any interest cost calculated in accordance with the
effective interest rate.
Financial assets and financial liabilities are initially recognised on the
trade date, which is the date on which the Group becomes party to the
contractual provisions of the instrument.
Financial assets and financial liabilities at fair value through profit or
loss are initially recognised at fair value, with transaction costs recognised
in the Consolidated Statement of Comprehensive Income. Financial assets and
financial liabilities not at fair value through profit or loss are initially
recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue.
Subsequent to initial recognition, financial assets are either measured at
fair value or amortised cost as noted above. Realised gains and losses arising
on the derecognition of financial assets and liabilities are recognised in the
period in which they arise. The effect of discounting on trade and other
receivables is not considered to be material.
Fair value measurement
"Fair value" is the price that would be received to sell an asset or be paid
to transfer a liability in an orderly transaction between market participants
at the measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The fair value
of a liability reflects its non-performance risk.
When available, the Group measures the fair value of an instrument using
quoted price in an active market for that instrument. A market is regarded as
"active" if transactions of the asset or liability take place with sufficient
frequency and volume to provide pricing information on an on-going basis. The
Group measures financial instruments quoted in an active market at a mid
price.
If there is no quoted price in an active market, the Group uses valuation
techniques that maximise the use of relevant observable inputs and minimise
the use of unobservable inputs. The chosen valuation technique incorporates
all of the factors that market participants would take into account in pricing
a transaction. Please refer to Note 22.
The Group recognises transfers between levels of the fair value hierarchy as
at the end of the reporting period during which the change has occurred. If in
the case of any investment the Directors at any time consider that the above
basis of valuation is inappropriate or that the value determined in accordance
with the foregoing principles is unfair, they are entitled to substitute what
in their opinion, is a fair value. Gains and losses arising from changes in
the fair value of the financial assets and liabilities at fair value through
profit or loss are included in the Consolidated Statement of Comprehensive
Income in the period in which they arise.
Debt and Equity Instruments
Debt and equity instruments issued by a group entity are classified as either
financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an
equity instrument. An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting all of its
liabilities.
Equity instruments are recorded at the proceeds received less any direct costs
of issue.
Derecognition
Sales of all financial assets are recognised on trade date - the date on which
the Group disposes of the economic benefits of the asset. Financial assets are
derecognised when the rights to receive cash flows from the asset have expired
or the Group has transferred substantially all risks and rewards of ownership.
On derecognition of a financial asset, the difference between the carrying
amount of the asset (or the carrying amount allocated to the portion of the
asset derecognised) and the consideration received (including any new asset
obtained less any new liability assumed) is recognised in the Consolidated
Statement of Comprehensive Income. Any interest in such transferred financial
assets that is created or retained by the Company is recognised as a separate
asset or liability.
The Group derecognises a financial liability when its contractual obligations
are discharged, cancelled or expire.
Derivative financial instruments
The Group enters into foreign exchange forward contracts in order to manage
its exposure to foreign exchange rate movements. Further details can be found
in Note 22.
Forward contracts are initially recognised at fair value at the date the
contract is entered into and are subsequently remeasured to their fair value
at each balance sheet date. Resulting gains/losses are recognised in profit or
loss immediately. Forward contracts with positive fair value are recognised as
financial assets whereas forward contracts with negative fair value are
recognised as financial liabilities. Contracts are presented as non-current
assets or liabilities if the remaining maturity of the instrument is more than
12 months and is not expected to be settled within 12 months. Other contracts
are presented as current assets.
Expected credit losses
Credit risk is assessed at initial recognition of each financial asset and
subsequently re-assessed at each reporting period-end. For each category of
Credit risk loans have been categorized into Stage 1, Stage 2 and Stage 3 with
Stage 1 being to recognise 12 month Expected Credit Losses (ECL), Stage 2
being to recognise Lifetime ECL not credit impaired and Stage 3 being to
recognise Lifetime ECL credit impaired. When for example LTV exceeds 65% or
amounts become 30 days past due judgement will be used to reassess whether
Credit risk has increased significantly enough to move the loan from one stage
to another. A loan is considered to be in default when there is a failure to
meet the legal obligation of the loan agreement. This would include provisions
against loans that are considered by management as unlikely to pay their
obligations in full without realisation of collateral. Refer to Note 22 for
further details.
Sancus loans and loan equivalents are assessed for credit risk based on
information available at initial recognition, predominantly (but not solely)
using Loan to Value (LTV). For trade and other receivables, the Group has
applied the simplified approach to recognise lifetime expected credit losses
although loan interest receivable is included in the gross carrying value when
determining ECL.
Provision for ECL is calculated using the credit risk, the probability of
default and the probability of loss given default, all underpinned by the LTV,
historical position, forward looking considerations and on occasion subsequent
events, and the subjective judgement of the Board. ECL assumes the life of the
loan is consistent with contractual term.
Financial guarantee contracts
Financial guarantee contracts are only recognised as a financial liability
when it becomes probable that the guarantee will be called upon in the future.
The liability is measured at fair value and subsequently in accordance with
the expected credit loss model under IFRS 9. The fair value of financial
guarantees is determined based on the present value of the difference in cash
flows between contracted payments required under the debt instrument and the
payments that would be required without the guarantee, or the estimated amount
that would be payable to a third party for assuming the obligations.
(g) Foreign currency translation
Functional and presentation currency
The financial statements of the Group are presented in the currency of the
primary economic environment in which the Company operates (its functional
currency). The Directors have considered the primary economic environment of
the Company and considered the currency in which finance is raised,
distributions made, and ultimately what currency would be returned if the
Company was wound up. The Directors have also considered the currency to which
the underlying investments are exposed. On balance, the Directors believe
Sterling best represents the functional currency of the Company. Therefore,
the books and records are maintained in Sterling and for the purpose of the
financial statements, the results and financial position of the Group are
presented in Sterling, which is also the presentation currency of the Group.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the
Consolidated Statement of Comprehensive Income. Non-monetary items measured at
historical cost are translated using the exchange rates at the date of the
transaction (not retranslated). Non-monetary items measured at fair value are
translated using the exchange rates at the date when fair value was
determined.
All subsidiaries are presented in Sterling, which is the primary currency in
which they operate with the exception of Sancus Lending (Ireland) Limited
whose primary currency is the Euro. Translation differences on non-monetary
items are reported as part of the fair value gain or loss reported in the
Consolidated Statement of Comprehensive Income.
Foreign exchange differences arising on consolidation of the Group's foreign
operations are taken direct to reserves. The rates of exchange as at the
year-end are £1: USD1.34721 (2024 USD1.25152) and £1: EUR1.14678 (2024
EUR1.20887).
(h) Goodwill
Goodwill represents the future economic benefits arising from a business
combination that are not individually identified and separately recognised.
Goodwill is measured as the excess of (a) the aggregate of: (i) the
consideration transferred measured in accordance with IFRS 3, which generally
requires acquisition-date fair value; (ii) the amount of any non-controlling
interest in the acquiree measured in accordance with IFRS 3; and (iii) in a
business combination achieved in stages, the acquisition-date fair value of
the acquirer's previously held equity interest in the acquiree; over (b) the
net of the acquisition-date amounts of the identifiable assets acquired and
the liabilities assumed measured in accordance with IFRS 3. Goodwill is
carried at cost less accumulated impairment losses. Refer to Note 2 (k) for a
description of impairment testing procedures.
(i) Interest costs
Interest costs are recognised when economic benefits are due to debt holders.
Interest costs are accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash payments through the expected
life of the financial liability to the liability's net carrying amount on
initial recognition.
(j) Other intangible assets
Intangible assets with finite useful lives are amortised to profit or loss on
a straight-line basis over their estimated useful lives. Useful lives and
amortisation methods are reviewed at the end of each annual reporting period,
or more frequently when there is an indication that the intangible asset may
be impaired, with the effect of any changes accounted for on a prospective
basis. Amortisation commences when the intangible asset is available for use.
The residual value of intangible assets is assumed to be zero.
Computer software
Costs associated with maintaining computer software programmes are recognised
as an expense as incurred. Development costs that are directly attributable to
the design and testing of identifiable and unique software products controlled
by the Group are recognised as intangible assets when the following criteria
are met:
§ It is technically feasible to complete the software product so that it
will be available for use.
§ Management intends to complete the software product and use or sell it.
§ There is an ability to use or sell the software product.
§ It can be demonstrated how the software product will generate probable
future economic benefits.
§ Adequate technical, financial and other resources to complete the
development and to use or sell the software product are available.
§ The expenditure attributable to the software product during its
development can be reliably measured.
Directly attributable costs that are capitalised as part of the software
product include the software development employee costs and third party
contractor costs. Other development expenditures that do not meet these
criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a
subsequent period. Capitalised development costs are recorded as intangible
assets and amortised from the point at which the asset is ready for use over
their estimated useful lives, which does not exceed four years.
(k) Impairment testing of goodwill, intangible assets and
property and equipment
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount, which
is the higher of fair value less costs of disposal and value-in-use. To
determine the value-in-use, management estimates expected future cash flows
from each cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future
reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect management's assessment
of respective risk profiles, such as market and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount
of any goodwill allocated to that cash-generating unit. Any remaining
impairment loss is charged pro rata to the other assets in the cash-generating
unit. With the exception of goodwill, all assets are subsequently reassessed
for indications that an impairment loss previously recognised may no longer
exist. An impairment loss is reversed if the asset's or cash-generating unit's
recoverable amount exceeds its carrying amount.
All impairments or subsequent reversals of impairments are recognised in the
Consolidated Statement of Comprehensive Income.
(l) Investment in Joint Venture and associates
A joint venture is a joint arrangement over which the Group has joint control.
An associate is an entity over which the Group has significant influence but
is not a subsidiary or a joint venture.
An investment in a joint venture or associate is accounted for by the Group
using the equity method except for certain FinTech Ventures associates as
described in Note 3. These are measured at fair value through profit or loss
in accordance with policy Note 2 (f).
Any goodwill or fair value adjustment attributable to the Group's share in the
joint venture or associate is not recognised separately and is included in the
amount recognised as an investment.
The carrying amount of the investment in a joint venture or associate is
increased or decreased to recognise the Group's share of the profit or loss
and other comprehensive income of the joint venture or associate and adjusted
where necessary to ensure consistency with the accounting policies of the
Group.
Unrealised gains and losses on transactions between the Group and its joint
venture or associate are eliminated to the extent of the Group's interest in
the entity. Where unrealised losses are eliminated, the underlying asset is
also tested for impairment.
(m) Non-Current Liabilities
Loans payable are recognised initially at fair value less directly
attributable transaction costs. Subsequent to initial recognition, loans
payable are stated at amortised cost using the effective interest rate method.
The ZDPs are contractually required to be redeemed on their maturity date and
they will be settled in cash, thus, ZDP shares are classified as liabilities
(refer to Note 17) in accordance with IAS 32 Financial Instruments:
Presentation. After initial recognition, these liabilities are measured at
amortised cost, which represents the initial proceeds of the issuance plus the
accrued entitlement to the reporting date. Any ZDPs acquired by the group, as
noted in Note 17, are held in Treasury and shown as a reduction in carrying
value.
(n) Property, plant and equipment
Property, plant and equipment include computer equipment, furniture and
fittings stated at cost less accumulated depreciation. Depreciation is
provided at rates calculated to write off the cost of property and computer
equipment on a straight-line basis over its expected useful economic life as
follows:
Furniture and fittings 3 to 5 years
Computer equipment 2 to 4 years
(o) Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for services provided in the
normal course of business, net of discounts, VAT and other sales-related taxes
where applicable in the Group. Revenue is reduced for estimated rebates and
other similar allowances. The Group has five principal sources of revenue and
related accounting policies are outlined below:
Interest on loans
Interest income is recognised in accordance with IFRS 9. Interest income is
accrued over the contractual life of the loan, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset's net carrying amount on initial
recognition.
Dividend income
Dividend income from investments is recognised when the shareholders' rights
to receive payment have been established (provided that it is probable that
the economic benefits will flow to the Group and the amount of revenue can be
measured reliably).
Fee income on syndicated and non-syndicated loans
In accordance with the guidance in IFRS 15 Revenue, the Group distinguishes
between fees that are an integral part of the effective interest rate of a
financial instrument, fees that are earned as services are provided, and fees
that are earned on the execution of a significant act.
i) Commitment and arrangement fees
Commitment and arrangement fees earned for syndicated loans are recognised on
origination of the loan as compensation for the service of syndication. This
is a reflection of the commercial reality of the operations of the business to
arrange and administer loans for other parties i.e. the execution of a
significant act and satisfying the Group's performance obligation at the point
of arranging the loan.
Consistent with the policy outlined above, commitment and arrangement fees
earned on loans originated for the sole benefit of the Group are also recorded
in revenue on completion of the service of analysing or originating the loan.
Whilst this is not in accordance with the requirements of the effective
interest rate method outlined in IFRS 9 Financial Instruments, this is not
considered to have a material impact on the financial performance or financial
position of the Group.
ii) Exit fees
Where a loan is syndicated and has standard terms the exit fee is recognised
as part of the arrangement fee, reflecting the costs of syndication at the
start of the loan. Where a loan is syndicated and has milestones or conditions
which determine if the fee becomes payable and/or the magnitude of the fee the
exit fee is treated as variable consideration in line with IFRS 15 and is only
recognised when the relevant milestones/conditions are met. Where loans are
not syndicated the exit fee is deemed to be part of the effective interest
rate and recognised over the term of the loan.
iii) Fee income earned by peer-to-peer subsidiary platforms
Fee income earned by subsidiaries whose principal business is to operate
online lending platforms that arrange financing between Co-Funders and
Borrowers includes arrangement fees, trading transaction fees, repayment fees
and other lender related fees. Revenue earned from the arrangement of
financing is classified as a transaction fee and is recognised immediately
upon acceptance of the arrangement by borrowers. Other transaction fees,
including revenue from Co-Funders in relation to the sale of their loan
participations in platform secondary markets is also recognised immediately.
Loan repayment fees are charged on a straight-line basis over the repayments
of the borrower's financing arrangement.
iv) Advisory fees
Advisory fee income is invoiced and recognised on an accruals basis in
accordance with the relevant investment advisory agreement.
(p) Share based payments
As explained in the Remuneration Report, the Company provides a discretionary
bonus, part of which may be satisfied through the issuance of the Company's
own shares, to certain senior management. The cost of such bonuses is taken to
the Consolidated Statement of Comprehensive Income with a corresponding credit
to Shareholders' Equity. The fair value of any share options granted is
determined at the grant date and the expense is spread over the vesting period
in accordance with IFRS 2.
(q) Taxation
Current tax, including corporation tax in relevant jurisdictions that the
Group operates in, is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right
to pay less tax in the future have occurred at the balance sheet date.
Timing differences are differences between the Group's taxable profits, and
its results as stated in the financial statements, that arise from the
inclusion of gains and losses in tax assessments in periods different from
those in which they are recognised in the financial statements.
(r) Treasury shares
Where the Company purchases its own Share Capital, the consideration paid,
which includes any directly attributable costs, is recognised as a deduction
from Share Premium.
When such shares are subsequently sold or reissued to the market, any
consideration received, net of any directly attributable incremental
transaction costs, is recognised as an increase in Share Premium. Where the
Company cancels treasury shares, no further action is required to the Share
Premium account at the time of cancellation.
(s) Warrants
Warrants are accounted for as either equity or liabilities based upon the
characteristics and provisions of each instrument and are recorded at fair
value as of the date of issuance. In subsequent periods an amount representing
the difference between the warrant exercise price and the prevailing market
price of the company's shares is transferred from/to retained earnings to/from
warrants outstanding.
(t) Inventories - Development properties
Inventories are stated at the lower of cost and net realisable value. Cost
comprises initial outlay and, where applicable, additional costs that have
been incurred in bringing the inventories to their present location and
condition. Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in marketing and
selling. Repossessed assets are accounted for under IAS 2: Inventories because
the Group will either immediately seek to dispose of those assets which are
readily marketable or pursue the original development plans to sell for those
that are not readily marketable. Such assets are classed as "Other Assets"
within current assets on the Statement of Financial Position.
(u) Leases
The Group assesses whether a contract is or contains a lease, at inception of
the contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets. For these leases, the Group
recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from the leased
assets are consumed.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise
fixed lease payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or rate
(initially measured using the index or rate at the commencement date), the
amount expected to be payable by the lessee under residual value guarantees,
the exercise price of purchase options (if the lessee is reasonably certain to
exercise the options) and payments of penalties for terminating the lease if
the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented within current and non-current liabilities in
the consolidated statement of financial position. It is subsequently measured
by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made. The Group remeasures this liability (and
makes a corresponding adjustment to the related right-of-use asset) whenever
the lease term has changed or there is a change in the lease payments used on
inception to measure the liability as described above.
The right-of-use assets comprise the initial measurement of the corresponding
lease liability, lease payments made at or before the commencement day, less
any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment
losses.
Right-of-use assets are depreciated over the shorter period of lease term and
useful life of the underlying asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the Group
expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired
and accounts for any identified impairment loss as described in the 'Property,
Plant and Equipment' policy.
Variable rents that do not depend on an index or rate are not included in the
measurement of the lease liability and the right-of-use asset. The related
payments are recognised as an expense in the period in which the event or
condition that triggers those payments occurs and are included in 'Operating
expenses' in profit or loss.
(v) Adoption of new and revised Standards
New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first
time for its annual reporting period commencing 1 January 2025:
Amendments to IAS 21 -- Lack of Exchangeability
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
New standards and interpretations not yet adopted
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January
2026:
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7
The following standards are effective for the period beginning 1 January 2027:
IFRS 19 Subsidiaries without Public Accountability: Disclosures; and
IFRS 18 Presentation and Disclosure in Financial Statements.
The Group is currently assessing the impact of these new accounting standards
and amendments. The Group does not expect any other standards issued by the
IASB, but are yet to be effective, to have a material impact on the Group.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN
APPLYING ACCOUNTING POLICIES
In the application of the Group's accounting policies, which are described in
Note 2, the directors are required to make judgements (other than those
involving estimations) that have a significant impact on the amounts
recognised and to make estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may
differ from these estimates. There is no change in applying accounting
policies for critical accounting estimates and judgments from the prior year.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
Critical judgements in applying the group's accounting policies
The following are the critical judgements, apart from those involving
estimations (which are dealt with separately below), that the directors have
made in the process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in the financial
statements.
Fair value accounting for FinTech Ventures investments
Some of the Group's FinTech Ventures investments meet the definition of an
associate. However, the Group has applied the exemption available under IAS
28.18 which states that when an investment in an associate is held by, or is
held indirectly through, an entity that is a venture capital organisation, the
entity may elect to measure investments in those associates at fair value
through profit or loss in accordance with IFRS 9 - Financial Instruments.
The Directors consider that the Group is of a nature similar to a venture
capital organisation on the basis that FinTech Ventures investments form part
of a portfolio which is monitored and managed without distinguishing between
investments that qualify as associate undertakings and those that do not.
Furthermore, the most appropriate point in time for exit from such investments
is being actively monitored as part of the Group's investment strategy.
The Group therefore designates those investments in associates which qualify
for this exemption as fair value through profit or loss. Refer to Note 22 for
fair value techniques used. If the Group had not applied this exemption the
investments would be accounted for using the equity method of accounting. This
would have the impact of taking a share of each investment's profit or loss
for the year and would also affect the carrying value of the investments.
The Directors consider that equity and loan stock share the same investment
characteristics and risks and they are therefore treated as a single unit of
account for valuation purposes and a single class for disclosure purposes.
Exit fees
The Directors consider that the economic measurement of fee revenues that
arise and become due on the completion of a loan (exit fees and warrants)
should be accounted for as variable consideration and the exit fee constrained
to the extent that it is highly probable that a significant reversal in the
amount of cumulative revenue recognised will not occur. Variable consideration
is included based on the expected value or most likely amount, with the
estimated transaction price associated with syndication services (being the
performance obligation to which these fees are attributable) due on collection
of the loan, updated at the end of each reporting period to represent the
circumstances present and any changes in circumstances during the reporting
period. This includes factors such as timing risk, liquidity risk, quantum
uncertainty and conditions precedent in the syndicated finance contract. The
Directors consider that this treatment best reflects the commercial operations
of the Group as an administrator of loan arrangements.
IFRS 10 Control Judgements
Judgement is sometimes required to determine whether after considering all
relevant factors, the Group has control, joint control or significant
influence over an entity or arrangement. Other companies may make different
judgements regarding the same entity or arrangement. The Directors have
assessed whether or not the Group has control over the Loan Note entities
based on whether the Group has the practical ability to direct the relevant
activities unilaterally. In making their judgement, the directors considered
the rights associated with its investment in preference shares. After
assessment, the directors concluded that the Group does not have the ability
to affect returns through voting rights (the preference shares do not have
voting rights) or other arrangements such as direct management of these
entities (the Group does not have control over the investment manager). If the
Directors had concluded that the ownership of preference shares was sufficient
to give the Group control, these entities would instead have been consolidated
with the results of the Group.
IFRS 9 Credit Risk
Credit risk and determining when a significant increase in credit risk has
occurred are critical accounting judgements and are assessed at each reporting
period end. Credit risk is used to calculate expected credit losses (ECL).
Further details on credit risk can be found in Note 22.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting period, that may have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed below.
Impairment of joint venture investments
As detailed in Note 10, the Directors have assessed the carrying value of
joint venture investments entered into by the Group. This assessment includes
discounted cash flow value-in-use analysis. Given the nature of the Group's
operations, the calculation of value in use is sensitive to the estimation of
future cash flows and the discount rates applied.
IFRS 9 ECL
Key areas of estimation and uncertainty are the probabilities of default (PD)
and the probabilities of loss given default (PL) which are used along with the
credit risk in the calculation of ECL. Further details on ECLs, PD and PL can
be found in Note 22. Should the estimates of PD or PL prove to be different
from what actually happens in the future, then the recoverability of loans
could be higher or lower than the accounts currently suggest, although this
should be mitigated by the levels of LTV which are, in the main, less than
70%. Where loans are in default and classified within stage 3, the Directors
estimate of the present value of amounts recoverable through enforcement or
other repayment plans could be materially different to the actual proceeds
received to settle the balances due. In respect of certain loans held by the
Group, the range of outcomes is significant and has a material impact on the
calculation of ECL.
Fair Value of the FinTech Ventures investments
The Group invests in financial instruments which are not quoted in active
markets and measures their fair values as detailed in Note 22.
All of the FinTech Ventures investments are categorised as Level 3 in the fair
value hierarchy. In the past the Directors have estimated the fair value of
financial instruments using discounted cash flow methodology, comparable
market transactions, recent capital raises and other transactional data
including the performance of the respective businesses. Having considered the
terms, rights and characteristics of the equity and loan stock held by the
Group in the FinTech Ventures investments, the Board's estimate of liquidation
value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in
the performance of these businesses and access to future returns via its
current holdings could affect the amounts ultimately realised on the disposal
of these investments, which may be greater or less than £nil. There have been
no transfers between levels in the period (2024: None).
4. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the manner in
which the Executive Management Team reports to the Board, which is regarded to
be the Chief Operating Decision Maker (CODM) as defined under IFRS 8. The main
focus of the Group is Sancus. Bearing this in mind the Executive Management
Team have identified four segments based on operations and geography.
Finance costs and Head Office costs are not allocated to segments as such
costs are driven by central teams who provide, amongst other services,
finance, treasury, secretarial and other administrative functions based on
need. The Group's borrowings are not allocated to segments as these are
managed by the Central team. Segment assets and liabilities are measured in
the same way as in these financial statements and are allocated to segments
based on the operations of the segment and the physical location of those
assets and liabilities.
The four segments based on geography, whose operations are identical (within
reason), are listed below. Note that Sancus Loans Limited, although based in
the UK, is reported separately as a stand-alone entity to the Board and as
such is considered to be a segment in its own right.
1. Offshore
Contains the operations of Sancus Lending (Jersey) Limited, Sancus Lending
(Guernsey) Limited, Sancus Properties Limited, Sancus Group Holdings Limited
and Hawkbridge Limited (the JV).
2. United Kingdom (UK)
Contains the operations of Sancus Lending (UK) Limited and Sancus Holdings
(UK) Limited.
3. Ireland
Contains the operations of Sancus Lending (Ireland) Limited.
4. Sancus Loans Limited
Contains the operations of Sancus Loans Limited, Sancus Loans No.3 Limited and
Sancus Loans No.4 Limited.
Year to 31 December 2025 Offshore UK Ireland Sancus Loans Limited (SLL) Sancus Debt Costs Total Sancus Head Office SLL Debt Costs Other Consolidated Financial Statements
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 371 5,538 3,000 (784) - 8,125 - 13,979 - 22,104
Operating (loss) / profit * (556) 439 1,730 (840) - 773 (567) - (5) 201
Credit Losses 155 - - 72 - 227 - - - 227
Debt Costs - - - - (2,086) (2,086) - - - (2,086)
Other (losses) / gains (269) (11) (107) 519 - 132 2,569 - - 2,701
Profit / (loss) on JVs and associates 361 - - - - 361 - - (250) 111
Taxation - - (204) - - (204) - - - (204)
(Loss) / profit After Tax (309) 428 1,419 (249) (2,086) (797) 2,002 - (255) 950
Year to 31 December 2024
Revenue 763 3,696 1,921 (295) - 6,085 - 10,691 - 16,776
Operating (loss) / profit * (195) (19) 989 (333) - 442 (823) - (6) (387)
Credit Losses 331 24 - 47 - 402 - - - 402
Debt Costs - - - - (2,331) (2,331) - - - (2,331)
Other Gains / (losses) (123) (19) 45 139 - 42 2,844 - - 2,886
Loss on JVs and associates (290) - - - - (290) - - (150) (440)
Taxation - - (130) - - (130) - - - (130)
(Loss) / profit After Tax (277) (14) 904 (147) (2,331) (1,865) 2,021 - (156) -
* Operating (loss) / profit before credit losses and debt costs
Sancus Loans Limited is consolidated into the Group's results as it is 100%
owned by Sancus Group. However, the reality is that Sancus Loans Limited is a
Co-Funder the same as any other Co-Funder. As a result the Board reviews the
economic performance of Sancus Loans Limited in the same way as any other
Co-Funder, with revenue being stated net of debt costs. Operating expenses
include recharges from Offshore to Ireland £74,000 (2024: £74,000) and Head
Office to Offshore £125,000 (2024: £125,000). "Other" includes FinTech
(excluding fair value and forex).
Reconciliation to Financial Statements
At 31 December 2025 Offshore UK Ireland Sancus Loans Limited (SLL) Total Sancus Head Office Fintech Portfolio Other Inter Segment Balances Consolidated Financial Statements
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total Assets 43,746 9,821 4,615 177,394 235,576 42,207 - - (82,779) 195,004
Total Liabilities (54,331) (18,798) (835) (177,696) (251,660) (25,049) - - 82,779 (193,930)
Net (Liabilities) / Assets (10,585) (8,977) 3,780 (302) (16,084) 17,158 - - - 1,074
At 31 December 2024 Offshore UK Ireland Sancus Loans Limited (SLL) Total Sancus Head Office Fintech Portfolio Other Inter Segment Balances Consolidated Financial Statements
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total Assets 43,602 6,949 2,843 110,572 163,966 41,512 - 3 (83,359) 122,122
Total Liabilities (53,870) (16,418) (628) (110,570) (181,486) (26,053) - (3) 83,359 (124,183)
Net (Liabilities) / Assets (10,268) (9,469) 2,215 2 (17,520) 15,459 - - - (2,061)
Head Office liabilities include borrowings £24.4m (2024: £25.7m). Other
FinTech assets and liabilities are included within "Other."
5. REVENUE
2025 2024
£'000 £'000
Co-Funder fees 3,600 2,556
Earn out (exit) fees 1,001 1,166
Transaction fees 2,971 1,937
Total revenue from contracts with customers 7,572 5,659
Interest on loans 59 39
Pollen Interest income 13,195 10,398
Sundry income 1,278 680
Total revenue 22,104 16,776
The disaggregation of revenue reflects the different performance obligations
in contracts with customers as described in the accounting policy Note 2(o)
and the typical timing of payment for those relevant revenue streams.
6. COST OF SALES
2025 2024
£'000 £'000
Interest and preference share interest costs 13,977 10,687
Other cost of sales 850 485
Total cost of sales 14,827 11,172
7. OPERATING EXPENSES
2025 2024
£'000 £'000
Amortisation and depreciation 161 298
Audit fees 259 256
Company secretarial, Investor relations and registrar fees 108 191
Corporate insurance 61 68
Employment costs 5,003 3,913
Legal and professional 181 344
Marketing expenses 78 2
NOMAD fees 111 118
Other office and administration costs 957 703
Pension costs 157 98
7,076 5,991
8. GROUP BORROWING COSTS
Group borrowing costs reflect the interest cost of the corporate bond and ZDPs
(see note 17).
2025 2024
£'000 £'000
Group borrowing costs 2,086 2,331
9. OTHER NET GAINS / (LOSSES)
2025 2024
£'000 £'000
Gains on foreign exchange 411 183
Loss on joint ventures and associates (250) (150)
Joint venture recharges (220) (119)
Lease interest (59) (22)
Gain on ZDPs 2,569 2,844
2,451 2,736
1,157,417 ZDP shares were acquired under a tender offer in June
2025 at a price of 120p per ZDP share. This was financed by the
issuance of £1,389,000 Sancus Bonds to Somerston Fintech Limited. The ZDP
shares acquired under this tender offer were cancelled.
1,700,000 ZDP shares were acquired under a tender offer in December
2025 at a price of 120p per ZDP share in exchange for the issue of
501,721,593 new ordinary shares to Somerston Fintech Limited. The ZDP
shares acquired under this tender offer were cancelled.
10. INVESTMENTS IN JOINT VENTURES
2025 2024
£'000 £'000
At beginning of year 14,379 14,255
Additions - joint venture 250 564
Impairment of joint venture (250) (150)
Share of net profit / (loss) of joint venture accounted for using the equity 361 (290)
method
At end of year 14,740 14,379
The Group has a 50% share in Amberton Limited. Additions in the year include
£250,000 (2024: £150,000) of investment in Amberton Limited and which was
subsequently written down to a carrying value of £Nil (2024: £Nil). Amberton
Limited, which is a Jersey registered entity, was incorporated in January 2021
and has been established as a joint venture to manage the loan note programme
going forward. The remaining £Nil (2024: £414k) of additions is support
provided to Hawkbridge in order for it to meet its running costs.
On 5 December 2023, the Group entered into a Joint Venture ("JV") agreement
with Hawk Family Office Limited for a new bridge and development lending
business in the Channel Islands. Sancus Lending (Jersey) Limited ("SLJL")
entered into a Business and Asset Purchase Agreement ("BAPA") with Hawk
Lending Limited (the previous lending business of Hawk Family Office Limited)
and Hawkbridge Limited (the new joint venture lending business)
("Hawkbridge"). Under the terms of the BAPA, SLJL sold to Hawkbridge Limited
its business as a going concern including goodwill, business information,
moveable assets, records and third party rights. The consideration for the
business of SLJL was the issue of 12 shares in the newly formed JV holding
company, Hawkbridge Limited, giving Sancus Group Holdings Limited a 50%
ownership in the JV. Hawkbridge Limited has two wholly owned subsidiaries,
Hawkbridge Lending Limited and Westmead Debt Services Limited.
Under the joint venture shareholder agreement, all new Channel Islands lending
business will be written through Hawkbridge. Hawkbridge will also provide
administration and other services to SLJL and Hawk Lending Limited.
Under IFRS 11, this joint arrangement is classified as a joint venture and has
been included in the consolidated financial statements using the equity
method.
Summarised financial information in relation to Hawkbridge is presented below:
2025 2024
£'000 £'000
Current assets 2,799 2,835
Non-current assets 28,522 28,520
Current liabilities 1,841 2,596
Included in the above amounts are:
Cash and cash equivalents 20 133
Current financial liabilities (excluding trade payables) 1,838 2,471
Net assets (100%) 29,480 28,759
Group share of net assets (50%) 14,740 14,379
Revenues 1,486 710
Profit / (loss) and total comprehensive income / (loss) for the period (100%) 722 (580)
Group share of total comprehensive income / (loss) (50%) 361 (290)
Included in the above amounts are:
Depreciation and amortisation 5 2
No dividends were received from the JV during the year ended 31 December 2025
(2024: £nil).
The JV is a private company; therefore no quoted market prices are available
for its shares.
The Group has no additional commitments relating to the JV.
11. EARNINGS PER ORDINARY SHARE
Consolidated profit per ordinary share has been calculated by dividing the
consolidated profit for the year after tax attributable to ordinary
shareholders of £950k (2024: £nil) by the weighted average number of
Ordinary Shares (excluding treasury shares) outstanding during the period of
584,656,887 (2024: 584,138,346).
Note 16 describes the warrants in issue, which are currently out of the money.
As such the warrants have not been considered to have a dilutive effect on the
loss per ordinary share in the current year.
2025 2024
Number of shares 1,085,859,939 584,138,346
Weighted average no. of shares in issue throughout the year 584,656,887 584,138,346
Basic profit per share 0.16p 0.00p
Diluted profit per share 0.16p 0.00p
12. PROPERTY, PLANT AND EQUIPMENT
Cost Right-of-use assets Property & Equipment Total
£'000 £'000
£'000
At 31 December 2023 1,365 419 1,784
Additions in the year 467 20 487
Disposals in the year (1,365) - (1,365)
At 31 December 2024 467 439 906
Additions in the year 412 97 509
Disposals in the year - - -
At 31 December 2025 879 536 1,415
Accumulated depreciation Right-of-use assets Property & Equipment Total
£'000 £'000
£'000
At 31 December 2023 1,084 406 1,490
Charge in the year 284 14 298
Disposals in the year (1,355) - (1,355)
At 31 December 2024 13 420 433
Charge for the year 127 34 161
Disposals in the year - - -
At 31 December 2025 140 454 594
Net book value 31 December 2025 739 82 821
Net book value 31 December 2024 454 19 473
13. OTHER INTANGIBLE ASSETS
Cost £'000
At 31 December 2023 1,584
Additions in the year -
At 31 December 2024 1,584
Additions in the year -
Disposals in the year (913)
At 31 December 2025 671
Amortisation £'000
At 31 December 2023 1,584
Charge in the year -
At 31 December 2024 1,584
Charge in the year -
Disposals in the year (913)
At 31 December 2025 671
Net book value 31 December 2025 -
Net book value 31 December 2024 -
Other intangible assets comprise capitalised contractors' costs and costs
related to core systems development. The assets have been fully amortised. The
legacy platform was closed down during the year and residual funds were
distributed to the funders.
14. OTHER INVESTMENTS
Other investments of £350,000 (2024: £100,000) represents the investment by
the Group in non-voting capital in its Loan Note programme entities.
15. TRADE AND OTHER RECEIVABLES
2025
£'000 2024
£'000
Loan fees, interest and similar receivables 17,106 10,943
Receivable from associated companies - 3
Hedging contracts 73 -
Other trade receivables and prepaid expenses 1,042 991
18,221 11,937
Loan fees, interest and similar receivables amounted to £22,491,000 at 31
December 2025 (2024: £16,293,000) before provisions against receivables of
£5,385,000 (2024: £5,350,000).
16. SHARE CAPITAL, SHARE PREMIUM & DISTRIBUTABLE RESERVE
Sancus has the power under its articles of association to issue an unlimited
number of ordinary shares of no par value.
501,721,593 ordinary shares were issued during the year (2024: Nil).
Share Capital - ordinary shares of nil par value
2025 2024
Number of shares Number of shares
At beginning of the year 584,138,346 584,138,346
Issued during the year 501,721,593 -
At end of the year 1,085,859,939 584,138,346
Share Premium - Ordinary shares of nil par value
2025 2024
£'000 £'000
At beginning of the year 118,340 118,340
Issue of ordinary shares 2,040 -
At end of the year 120,380 118,340
Ordinary shareholders have the right to attend and vote at Annual General
Meetings and the right to any dividends or other distributions which the
company may make in relation to that class of share.
Treasury Shares
2025 Number of shares 2024 Number of shares
Balance at start and end of the year 11,852,676 11,852,676
2025 2024
£'000 £'000
Balance at start and end of the year 1,172 1,172
Warrants in Issue
As at 31 December 2025 there were 89,396,438 (2024: 89,396,438) Warrants in
issue to subscribe for new ordinary shares at a subscription price of 2.25
pence per ordinary share. The Warrants are exercisable on at least 30 days
notice within the year ended 31 December 2025. The Warrants in issue are
classified as equity instruments because a fixed amount of cash is
exchangeable for a fixed amount of equity, there being no other features which
could justify a financial liability classification. The fair value of the
warrants at 31 December 2025 is £Nil (2024: £Nil). As the Warrants were not
exercised within the year ended 31 December 2025, they will subsequently be
cancelled.
The following describes the nature and purpose of each reserve within equity:
Share premium - Amount subscribed for share capital in excess of nominal
value.
Treasury shares - weighted average cost of own shares held in treasury.
Foreign exchange reserve - gains/losses arising on retranslating the net
assets of Sancus Lending (Ireland) Limited into the Group.
Retained earnings - All other net gains and losses and transactions with
owners (e.g. dividends) not recognised elsewhere.
17. LIABILITIES
2025 2024
Non-current liabilities £'000 £'000
ZDP shares (1) 3,035 8,773
Corporate Bond (2) 21,333 16,948
Pollen Facility (3) 151,039 89,610
Preference shares (4) 9,650 5,000
Irish Loan Note (5) 872 827
Paragon Facility (6) 417 -
Lease liabilities (Notes 2(u) & 24) 605 423
186,951 121,581
2025 2024
Current liabilities £'000 £'000
Accounts payable 623 316
Interest payable 2,193 1,263
Accruals and other payables 3,938 980
Hedging contracts - 2
Taxation 88 10
Provisions for financial guarantees - 11
Lease liabilities (Notes 2(u) & 24) 137 20
6,979 2,602
Provisions for financial guarantees are recognised in relation to ECLs on
off-balance sheet loans and receivables where the company has provided a
subordinated position or other guarantee (Note 25). No such provision was
required in the current year (2024: £11,000). The fair value is determined
using the exact same methodology as that used in determining ECLs (Note 2(f)
and Note 22).
2025 2024
Interest costs on debt facilities £'000 £'000
ZDP shares (1) 432 1,239
Corporate Bond (2) 1,654 1,088
Pollen Facility (3) 12,716 10,165
Preference shares (4) 1,036 518
Irish Loan Note (5) 80 8
Paragon Facility (6) 145 -
16,063 13,018
(1) ZDP shares
The ZDP shares have a maturity date of 5 December 2030 following ZDP
shareholders approving a 3 year extension of the final
capital entitlement repayment date on 24 June 2025. On this date, the
ZDP shareholders also approved the suspension of any further capital growth
from 24 June 2025, resulting in the final capital
entitlement being £2.0990 per ZDP share. Prior to this date, the
ZDP shares accrued interest at an average of 9% per annum.
Under the Companies (Guernsey) Law, 2008 shares in the Company can only be
redeemed if the Company can satisfy the solvency test prescribed under that
law. Refer to the Company's Memorandum and Articles of Incorporation for full
details of the rights attached to the ZDP shares. This document can be
accessed via the Company's website, www.sancus.com.
The Company purchased 1,388,889 ZDP shares of no par value at a price of
£1.08 per ZDP share on 29 April 2024 and a further 1,854,910 ZDP shares at a
price of £1.08 per ZDP share on 9 December 2024. The ZDP shares purchased in
April 2024 are held as treasury shares and the shares purchased in
December 2024 were cancelled. 1,157,417 ZDP shares
were acquired under a tender offer in June 2025 at a price of 120p per
ZDP share. This was financed by the issuance of £1,389,000 Sancus
Bonds to Somerston Fintech Limited. The ZDP shares acquired under this
tender offer were cancelled. 1,700,000 ZDP shares
were acquired under a tender offer in December 2025 at a price of 120p
per ZDP share in exchange for the issue of 501,721,593 new ordinary shares to
Somerston Fintech Limited. The ZDP shares acquired under this tender offer
were cancelled.
At 31 December 2025, the Company held 11,894,628 ZDP shares in Treasury
(2024: 11,894,628) with an aggregate value of £24,966,824 (2024:
£23,956,091).
(2) Corporate Bond
The corporate bond outstanding at 31 December 2025 was £21.3m (2024:
£17m). During the prior year, bondholders approved an extension in the
maturity date of the bonds to 31 October 2027 from 31 December 2025 and an
increase in the coupon to 8% from 7% (2024: 8%). In June
2025, bondholders approved an amendment to the terms of the bonds to
introduce a payment-in-kind interest option, allowing bondholders to elect to
receive interest rolled up and paid on maturity at an increased rate of
8.5% per annum, instead of the 8% cash coupon paid quarterly.
(3) Pollen Facility (previously HIT Facility)
Sancus signed a £125m facility agreement with funds managed by Pollen
Street PLC ("Pollen") in November 2022. In June 2025, Sancus signed a
new 5 year facility agreement with Pollen increasing the facility up to
£300m and with a 5 year expiry date (June 2030). This new facility
enables Sancus to draw funds in both GBP and EUR.
The Pollen facility has portfolio performance covenants, including that
actual loss rates are not to exceed 4% in any twelve month period and
underperforming loans are not to exceed 10% of the portfolio. Sancus Group
participates 10% on every drawdown with a first loss position on the Pollen
facility. Sancus has also provided Pollen with a guarantee that will continue
to ensure the orderly wind down of the loan book, in the event of the
insolvency of Sancus Group, given its position as facility and security agent.
Refer to Note 25 Commitments and Guarantees.
(4) Preference Shares
In April 2024, Somerston Fintech Limited, a subsidiary of Somerston Group,
the majority shareholder of the Company, subscribed for £5,000,000 of
preference shares in Sancus Loans Limited ("Sancus Loans"). A further
£4,650,000 preference shares have been subscribed for in the year to 31
December 2025. The Preference Shares had a non-cash, cumulative coupon of 15%
and a maturity date of 23 November 2026.
(5) Irish Loan Note
In November 2024, Sancus Loans No.3 Limited issued a €1,000,000 loan note
to Aatazar Unlimited Company. The loan note bears interest at 9% and is
repayable in November 2027.
(6) Paragon Facility
In July 2025, Sancus Loans No.4 Limited entered into an agreement with Paragon
Bank PLC for the provision of a £20 million committed funding facility. As at
31 December 2025, this facility has not been drawn down.
(6) Somerston Loans Facility
In July 2025, Somerston Loans Limited, a subsidiary of Somerston Group,
the majority shareholder of the Company, signed an unsecured, uncommitted
revolving loan facility of up to £5,000,000 with Sancus Loans No. 4 Limited.
The loan has a non-cash, cumulative coupon of 9.75% p.a. above the base rate
of the Bank of England compounded quarterly and a maturity date of 24 January
2030. As at 31 December 2025, £500,000 has been drawn down under this loan.
18. TAXATION
Reconciliation of tax charge
2025 2024
£'000 £'000
Accounting profit before tax 1,154 130
Guernsey Corporation Tax at 0% (2024: 0%) - -
Jersey Corporation Tax at 10% (2024: 10%) - -
Ireland Corporation Tax at 12.5% (2024: 12.5%) 204 130
Tax expense 204 130
Certain of the Group's subsidiaries have an estimated £29.1m (2024: £22.8m)
of losses between them available to carry forward to offset against qualifying
future trading profits. The Group does not recognise deferred tax assets in
respect of losses arising because in the opinion of the directors the quantum
and timing of any suitable taxable profits which can utilise these losses is
unknown.
19. NOTES TO THE CASH FLOW STATEMENT
Cash generated from operations (excluding loan movements)
2025 2024
£'000 £'000
Profit for the year 950 -
Adjustments for:
Other net gains (2,886) (2,624)
Finance costs 654 1,176
Impairment of joint ventures 250 150
Changes in expected credit losses (227) (402)
Amortisation/depreciation of fixed assets 161 298
Amortisation of debt issue costs 323 33
Changes in working capital:
Trade and other receivables (5,984) (3,482)
Trade and other payables 4,304 884
Cash outflow from operations (excluding loan movements) (2,455) (3,967)
Changes in liabilities arising from financing activities
The tables below detail changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be classified in the Group's consolidated cash flow
statement as cash flows from financing activities.
Debt issue costs (1) Amortisation of debt issue costs
£'000 Non-cash
1 January Payments (1) Receipts (1) £'000 Other 31 December
2025 £'000 £'000 Non-cash 2025
£'000 £'000 £'000
ZDP Shares 8,773 (1,389) - (172) 56 (4,233)(2) 3,035
Corporate Bond 16,948 (-) 3,988 - 20 377 21,333
Pollen Facility 89,610 - 61,505 (323) 247 - 151,039
Preference Shares 5,000 - 4,650 - - - 9,650
Irish Loan Note 827 - - - - 45 872
Paragon Facility - - 500 (100) - 17 417
Lease Liability 443 (113)(1) - - - 412 742
Total liabilities 121,601 (1,502) 70,643 (595) 323 (3,382) 187,088
Debt issue costs (1) Amortisation of debt issue costs
£'000 Non-cash
1 January Payments (1) Receipts (1) £'000 Other 31 December
2024 £'000 £'000 Non-cash 2024
£'000 £'000 £'000
ZDP Shares 13,967 (3,503) - (85) 62 (1,668)(2) 8,773
Corporate Bond 14,950 (-) 2,003 (8) 3 - 16,948
Pollen Facility 77,169 - 12,250 (24) 215 - 89,610
Preference Shares - - 5,000 - - - 5,000
Irish Loan Note - - 827 - - - 827
Lease Liability 282 (296)(1) - - - 457 443
Total liabilities 106,368 (3,799) 20,080 (117) 280 (1,211) 121,601
(1) These amounts can be found under financing cash flows in the cash flow
statement.
(2) Comprises interest accruals and unpaid debt issue costs where applicable.
20. CONSOLIDATED SUBSIDIARIES
The Directors consider the following entities as wholly owned subsidiaries of
the Group as at 31 December 2025. Their results and financial positions are
included within its consolidated results.
Subsidiary entity Date of Country of Nature of Holding % held
Incorporation Incorporation
Sancus Group Holdings Limited 27 December 2013 Guernsey Directly held -Equity Shares 100%
Sancus Lending (Jersey) Limited 1 July 2013 Jersey Indirectly held - Equity Shares 100%
Sancus Jersey Holdings Limited 13 March 2025 Jersey Indirectly held - Equity Shares 100%
Sancus Lending (Guernsey) Limited 18 June 2014 Guernsey Indirectly held - Equity Shares 100%
Sancus Lending (Ireland) Limited 10 April 2017 Ireland Indirectly held - Equity Shares 100%
Sancus Loans (Ireland) Limited 5 March 2024 Ireland Indirectly held - Equity Shares 100%
Sancus Lending (UK) Limited 17 February 2011 UK Indirectly held - Equity Shares 100%
Sancus Holdings (UK) Limited 7 January 2011 UK Indirectly held - Equity Shares 100%
FinTech Ventures Limited 9 December 2015 Guernsey Directly held - Equity Shares 100%
Sancus Properties Limited 21 August 2018 Guernsey Indirectly held - Equity Shares 100%
Sancus Loans Limited 3 July 2017 UK Indirectly held - Equity Shares 100%
Sancus Loans No2 Limited 19 July 2023 UK Indirectly held - Equity Shares 100%
Sancus Loans No.3 Limited 17 July 2024 UK Indirectly held - Equity Shares 100%
Sancus Loans No.4 Limited 16 July 2024 UK Indirectly held - Equity Shares 100%
Sancus Loans No.5 Limited 16 July 2024 UK Indirectly held - Equity Shares 100%
Sancus FFD Limited 22 January 2025 UK Indirectly held - Equity Shares 100%
Sancus Loans No.6 Limited 15 September 2025 UK Indirectly held - Equity Shares 100%
Sancus Loans No.7 Limited 15 September 2025 UK Indirectly held - Equity Shares 100%
Sancus Loans No.8 Limited 15 September 2025 UK Indirectly held - Equity Shares 100%
Sancus Group Holdings Limited and Sancus Holdings (UK) Limited act as holding
companies. Sancus Properties Limited engages in property development. Fintech
Ventures Limited is an investment company, investing in Fintech companies. The
activities of the remaining companies named above relate to the core business
of lending.
21. FINTECH VENTURES AND OTHER INVESTMENTS
The Directors consider the following entities as associated undertakings of
the Group as at 31 December 2025.
Name of Investment: Nature of holding Country of incorporation Percentage holding Measurement
FinTech Ventures:
Ovamba Solutions Inc Indirectly held - Equity United States of America 20.18% Fair Value
The percentage holdings in the above table are on a fully diluted basis,
assuming any warrants and management options all vest.
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT
Sancus loans and loan equivalents 2025 2024
£'000 £'000
Non-current
Sancus loans - -
Sancus Loans Limited loans 37,848 7,373
Total non-current Sancus loans and loan equivalents 37,848 7,373
Current
Sancus loans 480 386
Sancus Loans Limited loans 119,380 84,945
Total current Sancus loans and loan equivalents 119,860 85,331
Total Sancus loans and loan equivalents 157,708 92,704
Fair Value Estimation
The financial assets and liabilities measured at fair value in the
Consolidated Statement of Financial Position are grouped into the fair value
hierarchy as follows:
2025 2024
Level 2 Level 3 Level 2 Level 3
£'000 £'000 £'000 £'000
FinTech Ventures investments - - - -
Derivative contracts 73 - (2) -
Total assets at Fair Value 73 - (2) -
All of the FinTech Ventures investments are categorised as Level 3 in the fair
value hierarchy. In the past the Directors have estimated the fair value of
financial instruments using discounted cash flow methodology, comparable
market transactions, recent capital raises and other transactional data
including the performance of the respective businesses. Having considered the
terms, rights and characteristics of the equity and loan stock held by the
Group in the FinTech Ventures investments, the Board's estimate of liquidation
value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in
the performance of these businesses and access to future returns via its
current holdings could affect the amounts ultimately realised on the disposal
of these investments, which may be greater or less than £Nil. There have been
no transfers between levels in the period (2024: None).
FinTech Ventures investments
2025 Equity Loans Total
£'000 £'000 £'000
Opening fair value - - -
New investments/divestments - - -
Realised gains recognised in profit and loss - - -
Closing fair value - - -
2024 Equity Loans Total
£'000 £'000 £'000
Opening fair value - - -
New investments/divestments - - -
Realised gains recognised in profit and loss - - -
Closing fair value - - -
Assets at Amortised Cost
2025 2024
£'000 £'000
Sancus loans and loan equivalents 157,708 92,704
Trade and other receivables 17,106 10,946
Cash and cash equivalents 3,164 2,529
Total assets at amortised cost 177,978 106,179
Due to the relatively short-term nature of the above assets, their carrying
amount is considered to be the same as their fair value.
Liabilities at Amortised Cost
2025 2024
£'000 £'000
ZDP Shares 3,035 8,773
Corporate Bond 21,333 16,948
Pollen Facility 151,039 89,610
Preference Shares 9,650 5,000
Irish Loan Note 872 827
Paragon Facility 417 -
Trade and other payables 7,584 3,012
Provisions in respect of guarantees - 11
Total liabilities at amortised cost 193,930 124,181
Refer to Note 17 for further information on liabilities.
Risk Management
The Group is exposed to financial risk through its investment in a range of
financial instruments, i.e. in the equity and debt of investee companies and
through the use of debt instruments to fund its investment in loans. Such
risks are categorised as capital risk, liquidity risk, investment risk, credit
risk, and market risk (market price risk, interest rate risk and foreign
currency risk).
Comments supplementary to those on risk management in the Corporate Governance
section of this report are included below.
(1) Capital Risk Management
The Group's capital comprises ordinary shares as well as a number of debt
instruments. Its objective when managing this capital is to enable the Group
to continue as a going concern in order to provide a consistent appropriate
risk-adjusted return to shareholders, and to support the continued development
of its investment activities. Details of the Group's equity is disclosed in
Note 16 and of its debt in Note 17.
(2) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the
availability of funding through an adequate amount of committed credit
facilities to meet obligations when due. At the end of the reporting period
the Group held cash of £3,164,000. The Group Treasury Committee monitors
rolling forecasts of the Group's cash position in relation to its obligations
as they become due on a monthly basis. In addition, the Group's liquidity
management involves projecting cash flows and considering the level of liquid
assets necessary to meet obligations. Where necessary contingency plans are
made to realise assets which are reasonably liquid in the short term.
The following table analyses the Group's financial liabilities into relevant
maturity groupings based on the period to the contractual maturity date. The
amounts in the table are the contractual undiscounted cash flows.
Contractual maturities of financial liabilities Within 12 months Between 1 and 2 years Between 2 and 5 years Total
£'000 £'000 £'000 £'000
2025
ZDP shares - - 3,035 3,035
Corporate bond - 21,333 - 21,333
Sancus Loans Limited - - 151,039 151,039
Preference shares 9,650 - - 9,650
Irish Loan Note - 872 - 872
Paragon Facility - - 417 417
Trade and other payables 6,979 96 509 7,584
Total liabilities 16,629 22,301 155,000 193,930
Contractual maturities of financial liabilities Within 12 months Between 1 and 2 years Between 2 and 5 years Total
£'000 £'000 £'000 £'000
2024
ZDP shares - - 8,773 8,773
Corporate bond - - 16,948 16,948
Sancus Loans Limited - 89,610 - 89,610
Preference shares - 5,000 - 5,000
Irish Loan Note - - 827 827
Trade and other payables 2,084 541 400 3,025
Total liabilities 2,084 95,151 26,948 124,183
(3) Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates and that mismatches in the
interest rates applying to assets and liabilities will impact on the Group's
earnings.
The Group's cash balances, debt instruments and loan notes are exposed to
interest rate risk.
The Group did not enter into any interest rate risk hedging transactions
during the current or prior years.
The table below summarises the Group's exposure to interest rate risk:
Floating rate Financial Instruments Fixed Rate Financial Instruments Total
2025 £'000 £'000 £'000
Assets
Sancus loans and loan equivalents 145,073 12,635 157,708
Cash and cash equivalents 3,164 - 3,164
Total assets 148,237 12,635 160,872
Liabilities
ZDP shares - 3,035 3,035
Corporate bond - 21,333 21,333
Sancus Loans Limited 151,039 - 151,039
Preference shares - 9,650 9,650
Irish Loan Note 872 - 872
Paragon Facility 417 - 417
Total liabilities 152,328 34,018 186,346
Total interest sensitivity gap (4,091) (21,383) (25,474)
Floating rate Financial Instruments Fixed Rate Financial Instruments Total
2024 £'000 £'000 £'000
Assets
Sancus loans and loan equivalents 90,444 2,260 92,704
Cash and cash equivalents 2,529 - 2,529
Total assets 92,973 2,260 95,233
Liabilities
ZDP shares - 8,773 8,773
Corporate bond - 16,948 16,948
Sancus Loans Limited 89,610 - 89,610
Preference shares - 5,000 5,000
Irish Loan Note - 827 827
Total liabilities 89,610 31,548 121,158
Total interest sensitivity gap 3,363 (29,288) (25,925)
Interest rate sensitivities
The Group currently holds £3,164,000 in cash deposits, predominantly in
sterling. Whilst interest rates are currently positive, they have, in the
recent past, gone negative in certain jurisdictions. At the current level of
cash deposits this could cost the Group £31,640 per annum for every 1%
decrease in interest rates. The Group does not hold significant amounts in
foreign currencies for any period of time.
The Treasury Committee reviews interest rate risk on an ongoing basis, and the
exposure is reported quarterly to the Board and/or Audit and Risk Committee.
(4) Investment risk
Investment risk is defined as the risk that an investment's actual return will
be different to that expected. Historically investment risk primarily arose
from the Group's investment in its FinTech Ventures portfolio (see Note 3).
This risk was in turn driven by the underlying risks taken by the platforms
themselves - their own strategic, liquidity, credit and operational risks.
Given that the Fintech portfolio is now held at £Nil the Group has no further
exposure to investment risk, but does still retain investments in a number of
Fintech companies.
The Group measures fair values of the Fintech Portfolio using the following
fair value hierarchy that reflects the significance of the inputs used in
making the measurements.
· Level 1 - Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments. A market is regarded as "active" if
transactions of the asset or liability take place with sufficient frequency
and volume to provide pricing information on an on-going basis. The Group
measures financial instruments quoted in an active market at a bid price.
· Level 2 - Inputs other than quoted prices included within Level 1
that are observable either directly (i.e. as prices) or indirectly (i.e.
derived from prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments; quoted prices for
identical or similar instruments in markets that are considered less than
active; or other valuation techniques in which all significant inputs are
directly or indirectly observable from market data. The chosen valuation
technique incorporates all of the factors that market participants would take
into account in pricing a transaction.
· Level 3 - Inputs that are unobservable. This category includes
all instruments for which the valuation technique includes inputs not based on
observable data and the unobservable inputs have a significant effect on the
instrument's valuation. This category includes instruments that are valued
based on quoted prices for similar instruments but for which significant
unobservable adjustments or assumptions are required to reflect differences
between the instruments. If in the case of any investment the Directors at any
time consider that the above basis of valuation is inappropriate or that the
value determined in accordance with the foregoing principles is unfair, they
are entitled to substitute what in their opinion, is a fair value. In this
case, the fair value is estimated with care and in good faith by the Directors
in consultation with the Executive Management Team with a view to establishing
the probable realisation value for such shares as at close of business on the
relevant valuation day.
All of the FinTech Ventures investments are categorised as Level 3 in the fair
value hierarchy. In the past the Directors have estimated the fair value of
financial instruments using discounted cash flow methodology, comparable
market transactions, recent capital raises and other transactional data
including the performance of the respective businesses. Having considered the
terms, rights and characteristics of the equity and loan stock held by the
Group in the FinTech Ventures investments, the Board's estimate of liquidation
value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in
the performance of these businesses and access to future returns via its
current holdings could affect the amounts ultimately realised on the disposal
of these investments, which may be greater or less than £Nil. There have been
no transfers between levels in the period (2024: None).
(5) Credit risk
Credit risk is defined as the risk that a borrower/debtor may fail to make
required repayments within the contracted time scale. The Group invests in
senior debt, senior subordinated debt, junior subordinated debt and secured
loans. Credit risk is taken in direct lending to third party borrowers,
investing in loan funds, lending to associated platforms and loans arranged by
associated platforms.
The Group mitigates credit risk by only entering into agreements related to
loan instruments in which there is sufficient security held against the loans
or where the operating strength of the investee companies is considered
sufficient to support the loan amounts outstanding.
Credit risk is determined on initial recognition of each loan and re-assessed
at each reporting date. The risk assessment is undertaken by the Executive
Management Team at the time of the agreements, and the Executive Management
Team continues to evaluate the loan instruments in the context of these
agreements. Credit risk is categorised into Stage 1, Stage 2 and Stage 3 with
Stage 1 being to recognise 12 month Expected Credit Losses (ECL), Stage 2
being to recognise Lifetime ECL not credit impaired and Stage 3 being to
recognise Lifetime ECL credit impaired.
Credit risk is initially evaluated using the LTV, (LTGDV and LTF where
relevant) and the circumstances of the individual borrower. For the majority
of loans security takes the form of real estate. There has been no significant
change in the quality of this security over the prior year. When determining
credit risk macro-economic factors such as GDP, unemployment rates and other
relevant factors including the war in Ukraine are also taken into account. A
loan is considered to be in default when there is a failure to meet the legal
obligation of the loan agreement. Having regards to the principles of IFRS 9
this would also include provisions against loans that are considered by
management as unlikely to pay their obligations in full without realisation of
collateral. Once identified as being in default a re-assessment of the credit
risk of that loan will be undertaken using the factors as noted above. A
decision will then be made as to whether to credit impair that asset.
In some instances borrowers will request loan modifications, extensions or
renegotiation of terms. Any such event will trigger a reassessment of the
credit risk of that loan where the reasons for the modification, extension or
renegotiation will be carefully assessed and may result in that asset being
credit impaired.
The entities in the Sancus Lending Group operate Credit Committees which are
responsible for evaluating and deciding upon loan proposals, as well as
monitoring the recoverability of loans, and taking action on any doubtful
accounts. All lending undertaken by Sancus Lending is secured. The credit
committee reports to the Sancus Lending Board on a quarterly basis.
Provision for ECL
A probability of default is assigned to each loan. This probability of default
is arrived at by reference to historical data and the ongoing status of each
loan which is reviewed on a regular basis. The loss given default is deemed to
be nil where LTV is equal to or less than 65%, as it is assumed that the asset
can be sold and full recovery made.
Provision for ECL is made using the credit risk, the probability of default
(PD) and the loss given default (PL) all of which are underpinned by the Loan
to Value (LTV), historical position, forward looking considerations and on
occasion, subsequent events and the subjective judgement of the Board.
Preliminary calculations for ECL are performed on a loan by loan basis using
the simple formula Outstanding Loan Value (exposure at default) x PD x PL and
are then amended as necessary according to the more subjective measures as
noted above.
To reflect the time value of money ECL is discounted back to the reporting
date using the effective interest rate of the asset (or an approximation
thereof) that was determined at initial recognition.
The following tables provide information on amounts reserved for ECL on loans
and loan equivalents as at 31 December 2025 and 31 December 2024 based on the
model adopted by management.
Sancus loans and loan Stage 1 Stage 2 Stage 3 Total
equivalents at 31 December 2025 £'000 £'000 £'000 £'000
Closing loans at 31 December 2024 92,460 - 245 92,705
New Loans 98,754 - 39 98,793
Loans Repaid (33,784) - (598) (34,382)
Movement in ECL - - 592 592
Closing loans at 31 December 2025 157,430 - 278 157,708
Loss allowance Stage 1 Stage 2 Stage 3 Total
at 31 December 2025 £'000 £'000 £'000 £'000
Closing loss allowance at 31 December 2024 - - 3,061 3,061
Decrease in provision - - (592) (592)
Closing loss allowance at 31 December 2025 - - 2,469 2,469
For certain loans the range of outcomes for loss given default considered by
the Directors is significant and therefore has a material impact on the
calculation of ECL.
Sancus loans and loan Stage 1 Stage 2 Stage 3 Total
equivalents at 31 December 2024 £'000 £'000 £'000 £'000
Closing loans at 31 December 2023 72,392 - 6,373 78,765
New Loans 55,507 - - 55,507
Loans Repaid (35,402) - (11,588) (46,990)
Transfers from Stage 1 to Stage 3 (37) - 37 -
Movement in ECL - - 5,423 5,423
Closing loans at 31 December 2024 92,460 - 245 92,705
Loss allowance Stage 1 Stage 2 Stage 3 Total
at 31 December 2024 £'000 £'000 £'000 £'000
Closing loss allowance at 31 December 2023 - - 8,484 8,484
Increase in provision - - (5,423) (5,423)
Closing loss allowance at 31 December 2024 - - 3,061 3,061
Reconciliation of Provision for ECLs to charge in the statement of
comprehensive income
Loans Trade Receivables Guarantees Total
£'000 £'000 £'000 £'000
Loss allowance at 31 December 2024 3,061 5,350 11 8,422
Credit for the year (315) 99 (11) (227)
Utilisations (277) (64) - (341)
Loss allowance at 31 December 2025 2,469 5,385 - 7,854
For certain loans the range of outcomes for loss given default considered by
the Directors is significant and therefore has a material impact on the
calculation of ECL.
(6) Market price risk
The Group has no exposure to market price risk of financial assets valued on a
Level 1 basis as disclosed earlier in this note.
(7) Foreign exchange risk
Foreign exchange risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. Investments made in
currencies other than Sterling are currently valued at £Nil and therefore
there is no exposure.
The exchange rates used by the Group to translate foreign currency balances
are as follows:
Currency 31 December 2025 31 December 2024 31 December 2023
EUR 1.14678 1.20887 1.1534
USD 1.34721 1.25152 1.2731
The Treasury Committee monitors the Group's currency position on a regular
basis, and the Board of Directors reviews it on a quarterly basis. Loans
denominated in Euros which are taken out through the Pollen facility are
hedged using forward contracts. The following forward foreign exchange
contracts were open at the respective dates:
At 31 December 2025
Counterparty Settlement Buy Currency Buy Amount £'000 Sell currency Sell amount €'000 Unrealised gain £'000
date
Corpay January 2026 GBP 11,767 Euro 13,500 73
Unrealised gain on forward foreign contracts 73
At 31 December 2024
Counterparty Settlement date Buy Currency Buy Amount £'000 Sell currency Sell amount €'000 Unrealised loss £'000
Alpha January 2025 GBP 7,667 Euro 9,245 20
Lumon Risk Management January 2025 GBP 36,530 Euro 44,170
(22)
Unrealised loss on forward foreign contracts (2)
23. RELATED PARTY TRANSACTIONS
Transactions with the Directors/Executive Management Team
Non-executive Directors
As at 31 December 2025, the non-executive Directors' annualised fees,
excluding all reasonable expenses incurred in the course of their duties which
were reimbursed by the Company, were as detailed in the table below:
2025 2024
£ £
Tracy Clarke 35,000 58,750
Steve Smith 50,000 50,000
John Whittle 42,500 42,500
Total Directors' fees charged to the Company for the year ended 31 December
2025 were £127,500 (2024: £151,250) with £Nil (2024: £Nil) remaining
unpaid at the year-end.
Executive Management Team
The Executive Management Team consisted of Rory Mepham, James Waghorn and
Keith Lawrence. The Executive Management Team members' remuneration from the
Company, excluding all reasonable expenses incurred in the course of their
duties which were reimbursed by the Company, was as detailed in the table
below:
2025 2024
£'000 £'000
Aggregate remuneration in respect of qualifying service - fixed salary 611 538
Aggregate amounts contributed to money purchase pension schemes 31 25
Aggregate bonus paid (cash) 220 185
See remuneration report for further details. All amounts have been charged to
operating expenses.
Carlton Management Services Limited ("Carlton") sub-lease office space in the
Group's offices in Jersey, with a sub lease end date of 30 August 2036, at an
annual cost of c.£100,000 p.a.
Somerston Capital Limited sub-lease office space in the Group's offices in the
UK at an annual cost of £58,000 p.a.
Tracy Clarke is Managing Director of Carlton.
From time to time, the Somerston Group may participate as a co-Funder in
Sancus loans, on the same commercial terms available to other co-Funders.
In April 2024, Somerston Fintech Limited ("Somerston"), a subsidiary of
Somerston Group, the majority shareholder of the Company, subscribed for
£5,000,000 of preference shares in Sancus Loans Limited ("Sancus Loans").
On 30 January 2025, Somerston Fintech Limited committed to subscribe for up to
£10m of junior funding in the existing or future loan financing facilities of
the Group, subject to standard conditions precedent. As at 31 December 2025,
Somerston Fintech had provided junior funding of £7.05m under this
commitment. This comprised the issuance of £1.9m of Sancus Bonds, £0.5m
loan in Sancus Loans No.4 Limited and the issuance of £4.65m of Preference
Shares in Sancus Loans. The Preference Shares have a non-cash, cumulative
coupon of 15% and a maturity date of 23 November 2026.
Somerston Fintech Limited also subscribed for c.£1.4m of the Sancus Bond in
June 2025 in order to facilitate the buyback of some ZDP Shares. Somerston
Fintech Limited were issued 501,721,593 new ordinary shares in December 2025
in order to facilitate the buyback of some ZDP Shares.
In July 2025, Somerston Loans Limited, a subsidiary of Somerston Group,
the majority shareholder of the Company, signed an unsecured, uncommitted
revolving loan facility of up to £5,000,000 with Sancus Loans No. 4 Limited.
The loan has a non-cash, cumulative coupon of 9.75% p.a. above the base rate
of the Bank of England compounded quarterly and a maturity date of 24 January
2030. As at 31 December 2025, £500,000 has been drawn down under this loan.
The Group has not recorded any other transactions with any Somerston Group
companies for the year ended 31 December 2025 (2024: none).
Directors' and Persons Discharging Managerial Responsibilities ("PDMR")
shareholdings in the Company
The Directors and PDMRs had the following beneficial interests in the Ordinary
Shares of the Company:
2025 2024
No. of Ordinary Shares Held % of Ordinary Shares No. of Ordinary Shares Held % of Ordinary Shares
John Whittle 2,138,052 0.20 2,138,052 0.37
Rory Mepham 7,000,000 0.64 6,000,000 1.03
Robert Morton 5,000,000 0.46 5,000,000 0.86
James Waghorn 3,160,204 0.29 3,160,204 0.54
Keith Lawrence 923,712 0.09 923,712 0.16
During the year and prior year no directors received dividends on their
Ordinary Share holdings in the Company. In addition to the holding of Ordinary
Shares disclosed above Rory Mepham and James Waghorn will also receive
nil-cost options to acquire 5,500,000 and 3,500,000 Ordinary Shares
respectively at a price of 0.5p per share under a Long Term Incentive Plan
made in 2023 - See Remuneration Report.
In addition to their Sancus salaries, Rory Mepham and James Waghorn also
receive other emoluments from Somerston for services they provide to other
Somerston entities that are not related to the activities of Sancus.
From time to time members of key management personnel participate as
co-funders in loans originated by the Group.
Transactions with connected entities
The following transactions with connected entities took place during the year:
2025 2024
£'000 £'000
Net receivable from / (payable to) related parties
Amberton Limited - 3
Office and staff costs recharges
Amberton Limited 55 13
There is no ultimate controlling party of the Company.
24. LEASES
The Group as Lessee
Maturity Analysis - contracted undiscounted cash flows
2025 2024
£'000 £'000
Within one year 315 111
In the second to fifth years inclusive 593 481
After five years 419 493
1,327 1,085
All lease commitments relate to office space.
Lease liabilities included in the statement of financial position
2025 2024
£'000 £'000
Current 137 20
Non-current 605 423
742 443
Amounts recognised in the statement of comprehensive income
2025 2024
£'000 £'000
Depreciation expense on right-of-use assets 127 284
Interest expense on lease liabilities 59 22
Expense related to short term leases 173 356
Income received from sub-leasing right-of-use assets 119 93
25. COMMITMENTS AND GUARANTEES
The Group's commitments and guarantees are described below.
Pollen Facility
Sancus Group participates 10% on every loan funded by the Pollen facility,
taking a first loss position. Sancus Group Lending Limited has provided Pollen
with a guarantee capped at £4m following the restructure of the Pollen
facility in November 2022 (previously was capped at £2m) and that it will
continue to ensure the orderly wind down of the Pollen funded loan book, in
the event of the insolvency of Sancus Group, given its position as facility
and security agent. No provision has been provided in the financial statements
(2024: £Nil).
Sancus Loan Notes
Loan Note 8 was launched in January 2022 and is closed for new subscriptions
with AUM of £33.068m. Loan Note 8 matures on 1 December 2026 and has a coupon
of 8% p.a. (payable quarterly), with Sancus providing a 20% first loss
guarantee.
Loan Note 9 was launched in September 2024 and is closed for new subscriptions
with an AUM of £25.6m. Loan Note 9 matures on 28 September 2029 and has a
coupon of between 7.5% and 8.5% p.a. depending on participation level (payable
monthly), with Sancus and Hawkbridge providing a 20% first loss guarantee
jointly.
Amberton Loan Note 1 is a bespoke note that launched in May 2025, the note has
AUM of £9.0m (including preference shares) as at 31 December 2025. Loan Note
1 matures on 14 May 2030 and has a coupon of 8% (payable monthly).
Amberton Loan Note 2 launched in December 2025, the note has AUM of £2.6m as
at 31 December 2025. Loan Note 2 matures on 12 December 2030 and has a coupon
of between 7.5% and 8.5% p.a. depending on participation level (payable
monthly), with Sancus and Hawkbridge providing a 20% first loss guarantee
jointly.
Warehouse Loan Note 1 launched in November 2025 with a mandate of offering 90
day underwriting capital. The note has AUM of £2.5m as at 31 December 2025
and matures on 4 November 2030 and has a coupon of 7% (payable quarterly).
Unfunded Commitments
As at 31 December 2025 the Group has unfunded commitments of £90.7m (2024:
£68.4m). These unfunded commitments primarily represent the undrawn portion
of development finance facilities. Drawdowns are conditional on satisfaction
of specified conditions precedent, including that the borrower is not in
breach of its representations or covenants under the loan or security
documents. The figure quoted is the maximum exposure assuming that all such
conditions for drawdown are met. Directors expect the majority of these
commitments to be filled by Co-Funders.
26. EVENTS AFTER THE REPORTING DATE
In January 2026, Somerston subscribed for £1.4m of preference shares in
Sancus Loans Limited. In February 2026 the Group announced an increase in the
size of the Pollen facility to £300m and an extension of its term to February
2031. As part of the increase in the size of the facility, the advance rate
has been increased to 92.5% and an uncapped guarantee provided by Sancus
Group. In March 2026 the terms of the preference shares in issue by Sancus
Loans Limited were adjusted so that (i) £8m of preference shares were
re-papered as Euro preference shares, (ii) the coupon was amended to be a
margin of 10.5% over the relevant benchmark rate and (iii) their maturity date
was extended to February 2031. In March 2026 Somerston subscribed for £0.75m
of Sancus Bond.
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