REG - TruFin PLC TruFin PLC - Half-year Report
29/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230929:nRSc0830Oa&default-theme=true
RNS Number : 0830O TruFin PLC 29 September 2023
29 September 2023
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries "TruFin Group" or
the "Group")
Interim Financial Report for the six months ended 30 June 2023 (Unaudited)
· Combined gross revenue for the Group increased 35% to £8.5m (H1
2022: £6.3m)
· Gross revenue at Oxygen Finance Group Limited (together with its
subsidiaries) ("Oxygen") increased by 8% to £2.7m (H1 2022: £2.5m), driven
by growth in its core UK Early Payments market. EBITDA was flat at £0.3m as
Oxygen executed a targeted investment program focused on maximising the
revenue potential embedded in its client base
· Gross revenue at Satago Financial Solutions Limited ("Satago")
increased 180% to £1.7m (H1 2022: £0.6m) with strong growth in subscription
services and invoice financing facilities
· Playstack Ltd ("Playstack") recorded 7% revenue growth to £2.5m (H1
2022: £2.3m), with the highly anticipated launch of The Last Faith on track
for a Q4 release
· Gross revenue at Vertus Capital Limited ("Vertus") increased 67% to
£1.5m (H1 2022: £0.9m), driven by new facilities, interest rate rises and
early settlements
· TruFin Group's EBITDA loss improved 12% to £3.8m (H1 2022: £4.3m)
· TruFin Group's loss before tax was £6.2m (H1 2022: £4.8m) as a
result of a one-off net impairment loss of £1.3m on goodwill (due to the
anticipated sale of TruFin's stake in Vertus) plus a depreciation and
amortisation charge of £1.2m (H1 2022: £0.5m)
6 months to 6 months to 12 months to
30 June 30 June 31 December
2023 2022 2022*
Financials and KPI's (Unaudited) £'000 £'000 £'000
Gross Revenue 8,497 6,281 16,119
EBITDA (3,786) (4,320) (6,425)
Loss before tax (6,220) (4,795) (8,020)
Net Assets 34,228 42,419 40,104
*Audited figures
Key milestones during the period:
· Approximately 30% of Oxygen's EP clients purchased two or more
products during the period (H1 2022: c15%)
· Migration of existing Lloyds Banking Group's factoring clients onto
the platform has started with the remainder of the factoring book expected to
be materially progressed during 2024
· Following the success of its Mortal Shell game, which has sold more
than one million units, Playstack signed an agreement to develop and licence
Mortal Shell 2 and Mortal Shell 3
· Successful Placing and Open Offer raising £7.6m before expenses,
enabling Playstack to secure the Mortal Shell franchise and provide the Group
with additional working capital
Key milestones post period end:
· Satago has today signed a Letter of Intent with a UK challenger bank
- covering the adoption of Satago's LaaS solution. This will enable the
Challenger Bank to offer invoice financing to its customers and to simplify
and automate internal processes
· To build on Satago's platform launch with Lloyds Banking Group and
execute on the significant opportunities ahead, Satago has today agreed a £4m
Convertible Loan Note ("CLN") with existing shareholders
· Playstack signed a new, multi-year partnership with a major
technology platform for more than $2m to develop a series of sequel games
based on existing published IP. In addition, Playstack's proprietary discovery
technology has sourced four new titles for release throughout 2024
· TruFin received and conditionally accepted a non-binding cash offer
for its shares in Vertus. Due diligence and contract negotiations are ongoing
and, if successful, the deal is expected to complete before year end. If
completed, TruFin expects to receive cash proceeds of approximately £3.2m
James van den Bergh, Chief Executive Officer commented:
"We have made positive progress during 2023, with growth across the Group. It
was pleasing to successfully conclude TruFin's fundraise in June 2023, and I
would like to personally thank shareholders for their ongoing support. The
fundraise has enabled targeted additional investment in Playstack, Oxygen and
Satago which the Board believes will maximise the equity value of these
businesses for shareholders.
The proceeds allowed Playstack to enter into an agreement to develop and
licence further games in the Mortal Shell franchise - an exceptional series
that the whole team is excited to work on. Playstack's signing of a further
multi-million-dollar, multi-year partnership to develop a series of sequel
games based on existing published IP is further testament to the momentum
within the business.
The fundraise has also allowed us to participate in Satago's CLN. Already
delivering on its next generation lending platform for Lloyds Banking Group,
today's announcement of the signing of a Letter of Intent with a UK Challenger
Bank marks a big moment in Satago's development. Having shifted focus from a
lending business to a software business, Satago will soon be a tech player
with multiple enterprise customers, forward-thinking and united in a desire to
offer SMEs a fully digitised end-to-end proposition. In so doing they are
helping SMEs unlock their potential in the face of economic uncertainty.
As we look to reveal the full value embedded within Oxygen, we have made
various tactical investments to make the company as attractive as possible to
the largest number of potential acquirers. The value Oxygen adds to its
customer base cannot be underestimated, and its cross-selling opportunities
remain significant.
TruFin is very well positioned, and the Board looks to the future with
excitement."
For further information, please contact:
TruFin plc
James van den Bergh, Chief Executive Officer 0203 743 1340
Kam Bansil, Investor Relations 07779 229508
Liberum Capital Limited (Nominated Adviser and Corporate broker) 0203 100 2000
Chris Clarke
Edward Thomas
TruFin plc is the holding company of an operating group comprising four
growth-focused technology businesses operating in niche markets: early payment
provision, invoice finance, IFA finance and mobile games publishing. The
Company was admitted to AIM in February 2018 and trades under the ticker
symbol: TRU. More information is available on the Company website:
www.TruFin.com (http://www.TruFin.com)
Chief Executive's Statement
Oxygen
Oxygen's position as a financial technology company delivering social value
strengthened significantly during H1 2023.
Gross revenue at Oxygen increased by 8% to £2.7m (H1 2022: £2.5m). Oxygen's
core Early Payments ("EP") revenue grew 20% to £1.8m (H1 2022: £1.5m) whilst
other revenue predominantly comprising of Software as a Service ("SaaS") and
partnership revenues was flat at £0.9m.
Momentum within Oxygen's EP market continues to build, with combined supplier
spend totalling £24bn at the end of June 2023, up 9.4% from 30 June 2022.
An unprecedented number of clients' suppliers participated in EP programmes in
H1 2023, with on-boarded annual supplier spend exceeding £1.2bn across 4,600
suppliers, growth of 20% over H1 2022. A record amount of new supplier spend,
£201m, was also added during H1 2023, an increase of 22% over H1 2022.
Transacted spend attracting an early payment discount reached £468m in H1
2023, up 12% versus H1 2022. Total rebates generated were £5.1m in H1 2023,
up 20% on H1 2022.
Oxygen's entrenchment into client procurement activity is illustrated by the
continuing growth of its "Freepay" initiative. This sees Oxygen help clients
deliver social value to their local communities by enabling them to pay local
micro and small suppliers early, at no cost. By the end of June 2023 more than
11,000 suppliers were participating in this programme (up from 6,000 as at end
June 2022). These local micro and small suppliers enjoyed early invoice
payments totalling £275m, without charge, during the first six months of the
year.
SaaS H1 revenues were flat at £0.7m, despite some irrational competitor
pricing potentially prompted by financial strain. Oxygen's management believes
this may lead to consolidation in the marketplace. Oxygen remains the market
leader, unrivalled in its knowledge of local authority procurement and trusted
partner status. Approximately 30% of Oxygen's Early Payments clients purchased
two or more products during the period (H1 2022: circa 15%).
Partnership revenues which relate to third party products sold into Oxygen's
client base grew strongly to £134,000 (H1 2022: £7,000). This highlights the
strength of Oxygen's client relationships and distribution capabilities and
has significant growth potential.
To fully exploit its dominant market position and client pipeline, Oxygen
invested in its technology and people and continued to opt for higher revenue
gain share over up-front fees, benefitting outer-year revenue. These targeted
initiatives have supressed the 2023 year-on-year revenue growth rate, and
added £0.2m of cost, temporarily supressing EBITDA growth. However, they are
anticipated to benefit both revenue and profit in 2024 and beyond.
Satago
Satago offers its customers technically advanced invoice finance and cashflow
management systems via its online software platform.
Satago is continuing its transition from predominantly self-funding its
balance sheet to a hybrid model incorporating "partner balance sheet
financing" which utilises Satago's lending-as-a-service ("LaaS") solutions and
embedded finance model. This strategy remains anchored by the company's
five-year commercial agreement and partnership with Lloyds Banking Group, and
its strategic partnership with Sage to offer embedded finance in a number of
Sage products.
During the period, Satago migrated a small set of Lloyds Banking Group's
factoring clients onto the platform. Large scale migration is now due to begin
in 2024; with migration anticipated to be materially progressed during 2024.
Platform functionality for onboarding new clients and supporting the Sage50
embedded finance customers remains the primary focus in Q4 2023.
Satago more than doubled revenues in the first half of the year to £1.7m (H1
2022: £0.6m), driven by LaaS income and increases in interest and fee income
(£605,000 versus £252,000 in H1 2022) as it builds on its existing
partnerships while growing its invoice financing capabilities.
Subscription numbers with one of Satago's existing strategic technology
partners continue to grow strongly, with active subscriptions increasing 134%
to 640 over the same period in 2022 (H1 2022: 273). Based on the success of
this year's UK and Irish roll out, Satago and its strategic partner have
agreed, subject to contract, to roll out the same offering in the US and
Canada in H1 2024.
Satago has recently extended its £5m facility with a specialist niche funder
to £7m, in order to continue its expansion plans. The facility is currently
£5.7m drawn.
Playstack
Playstack is a gaming technology business providing publishing and related
services to the mobile game and console sector. Playstack is the Group's entry
point into the highly attractive growth market of video game publishing.
Playstack continues to target positive EBITDA and operating cash generation in
2023.
Playstack has continued to track to its three-year commercial plan and expects
to deliver significant growth from 2022 through to 2024 and beyond. During the
period, the Group signed an agreement to develop Mortal Shell 2 and 3
following the success of Mortal Shell which has sold over one million copies.
The securing of the Mortal Shell franchise has generated real excitement
across the gaming landscape and provided Playstack a multi-year release
programme.
Additionally, through valuable platform and technology partnerships, Playstack
has been able to deliver valuable revenue visibility ahead of games launches,
de-risking development spend.
Playstack continues to develop its own innovative technology suite that sets
it apart from market rivals.
Vertus
Vertus provides succession finance to Independent Financial Advisers ("IFAs").
The business originates deals through its collaboration with IntegraFin
Holdings plc ("IntegraFin") and various business brokers focused on the IFA
market.
Given the increase in cost of debt and equity capital, the deal market has
softened during 2023. However significant consolidation persists as Financial
Planners continue to retire from the industry, pressured by age and regulation
(consumer duty being the most recent regulatory driver).
Private Equity-backed consolidators proliferate and continue to drive high
valuations and significant deal activity with aggressive integration
strategies. In contrast, Vertus funds a succession process that ensures
planning firms can remain independent and meet client demand for quality and
bespoke advice.
The loan book continues to perform well, with the value of the underlying
security increasing as Vertus' borrowers retain and grow their client bases.
The combination of higher interest rates and suppressed equity and bond
markets has put downward pressure on ad valorem recurring revenue for firms,
which has introduced early signs of stress on the profitability of firms.
Furthermore, competition with yields on cash and the impact of inflation on
household budgets has reduced new inflows. Despite this, borrowers are
managing the environment well and Vertus remains without credit losses since
inception.
The increasing interest rate environment has precipitated some early
settlements for Vertus, which has helped early settlement charge
profitability, whilst hampering growth in the loan book. Despite the increase
in these settlements, Vertus is aiming to end 2023 with a loan book of £24m
(31 December 2022: £21.9m).
Vertus is developing further capital products to enable independent succession
in the UK IFA market and has good prospects for the future.
Post period end developments and outlook
Oxygen
Oxygen's core EP revenue maintained strong organic growth, with EP revenues to
the end of August up by 22% year-on-year.
Seven of the eight EP client contracts due to expire in FY23 have already been
re-signed or had renewal confirmed, for multi-year periods.
Additionally, three new EP client contracts were signed by the end of August
2023, with an exceptionally strong pipeline expected to deliver a record
number of new clients in 2023. The Board is confident of continued and
significant financial progress in 2024 and beyond.
Partnerships continue to develop. Oxygen anticipates these will contribute
more than £0.25m to full year revenues, from reselling services and referral
fees. Seventeen EP clients now purchase one or more additional service from
Oxygen.
The turmoil of the Covid pandemic has now passed with record numbers of
attendees at the various local government conferences that Oxygen attends and
hosts annually, enabling Oxygen to build its client prospect pipeline.
The normalisation of remote working post-Covid continues to benefit Oxygen,
with ongoing efficiencies achieved particularly with new client
implementation. Moreover, councils in England alone are expected to increase
procurement expenditure to £74bn in 2023, up 4% over 2022. These favourable
tailwinds, coupled with rising interest rates and inflation, make Oxygen's
supply side offer even more compelling.
Satago
Full client migration of Lloyds Banking Group's factoring clients is set to be
materially progressed during 2024.
In addition, platform functionality for onboarding clients and supporting the
Bank's embedded finance customers within Sage50 is anticipated to be delivered
in November 2023.
Building on this success, today Satago is pleased to announce that it has
signed a Letter of Intent with a UK Challenger Bank ("Challenger Bank"),
covering the adoption of Satago's LaaS solution. This will enable the
Challenger Bank to offer invoice financing to its customers and to simplify
and automate internal processes.
This Letter of Intent demonstrates the ongoing demand for the compelling
product which Satago has built and further solidifies Satago's place as a
Critical Integration Platform for incumbent Banks globally. Conversations are
ongoing with multiple strategic partners in other territories.
To build on Satago's successful Platform launch with Lloyds Banking Group and
execute on the significant opportunities ahead, Satago has today agreed £4m
CLN from existing shareholders. TruFin is investing £3m via the CLN which
will earn interest of 15% per annum and convert to common equity at a material
discount to the price of a future equity fund raise completed by Satago.
Playstack
Playstack's two new PC and console releases - AK-Xolotl and The Last Faith -
combined with the securing of further platform deals are key to delivery of
revenues for the current year.
AK-Xolotl launched on 14 September to strong critical acclaim, performing
in-line with expectations. AK-Xolotl has been released across PC, Xbox 1, Xbox
Series S/X, PlayStation 4, PlayStation 5 and Nintendo Switch. This was
Playstack's first simultaneous release across six platforms and is testament
to the business's strong operational capability.
The Last Faith is slated for release in November 2023 and is enjoying strong
wish-list momentum following the release of a new playable demo.
During September Playstack secured a new multi-million-dollar, multi-year
partnership with a major technology platform to develop a series of sequel
games based on existing published IP. This contract underpins Playstack's
ambition to sequel high quality existing IP via a fully funded model.
Playstack's proprietary discovery technology has sourced several high
potential games, including four new titles for release throughout 2024 with
more in the pipeline.
Vertus
In August 2023 the TruFin board received and conditionally accepted a
non-binding cash offer for its shares in Vertus. Due diligence and contract
negotiations are ongoing and, if successful, the deal is expected to complete
before year end.
Vertus has originated new facilities of £4m and the pipeline is experiencing
increased volumes. The company's loan book is forecast to grow to £24m (from
£21.9m as at 31 December 2022). Loan book growth has been largely offset by
an increase in early settlements as borrowers seek to pay down debt subject to
higher interest rates.
The subsidiaries within the TruFin Group have been resilient in the first six
months of 2023 and the board remains confident regarding prospects for the
remainder of 2023.
As at 31 August 2023, the following assets were not less than:
· £7.8m of cash or cash equivalents
· £6.9m of assets within the Satago Group's loan book
The TruFin Group has no more than £2.4m in net near-term liabilities.
UNAUDITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
6 months ended 6 months ended Year ended 31 December 2022
Notes 30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Interest income 3 2,093 1,003 2,619
Fee income 3 3,930 2,955 7,183
Publishing income 3 2,474 2,323 6,317
Gross revenue 3 8,497 6,281 16,119
Interest, fee and publishing expenses (2,564) (1,947) (5,075)
Net revenue 5,933 4,334 11,044
5 (6,737) (6,433) (12,609)
Staff costs
Other operating expenses (2,922) (2,215) (4,810)
Depreciation & amortisation (1,171) (479) (1,596)
Net impairment loss on financial assets (69) (6) (50)
Impairment of goodwill 9 (1,250) - -
Share of (loss)/profit from associates (4) 4 1
Loss before tax (6,220) (4,795) (8,020)
8 241 230 1,214
Taxation
Loss for the period/year (5,979) (4,565) (6,806)
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Exchange differences on translating foreign operations 103 9 (65)
Other comprehensive income for the period/year, net of tax 103 9 (65)
Total comprehensive loss for the period/year (5,876) (4,556) (6,871)
Loss after tax attributable to:
Owners of TruFin plc (5,995) (3,716) (6,637)
Non-controlling interests 16 (849) (169)
(5,979) (4,565) (6,806)
Total comprehensive loss for the period/year attributable to:
Owners of TruFin plc (5,894) (3,706) (6,704)
Non-controlling interests 18 (850) (167)
(5,876) (4,556) (6,871)
Earnings per share 6 months ended 6 months ended Year ended 31 December 2022
Notes 30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) Pence
pence pence
Basic and Diluted EPS 14 (6.4) (4.3) (7.3)
UNAUDITED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at As at 31
Notes 30 June 2023 December 2022
£'000 £'000
(Unaudited) (Audited)
Assets
Non-current assets
Intangible assets 9 23,718 24,411
Property, plant and equipment 10 320 345
Deferred tax asset 8 165 250
Loans and advances 11 15,955 15,016
Total non-current assets 40,158 40,022
Current assets
Cash and cash equivalents 4,993 10,273
Loans and advances 11 10,615 9,145
Interest in associate - 4
Trade receivables 1,777 2,149
Other receivables 4,891 3,899
Total current assets 22,276 25,470
Total assets 62,434 65,492
Equity and liabilities
Equity
Issued share capital 12 85,706 85,706
Retained earnings (30,879) (24,884)
Foreign exchange reserve 38 (63)
Other reserves (26,531) (26,531)
Equity attributable to owners of the company 28,334 34,228
Non-controlling interest 5,894 5,876
Total equity 34,228 40,104
Liabilities
Non-current liabilities
Borrowings 13 15,688 16,764
Total non-current liabilities 15,688 16,764
Current liabilities
Borrowings 13 5,449 1,783
Trade and other payables 7,069 6,841
Total current liabilities 12,518 8,624
Total liabilities 28,206 25,388
Total equity and liabilities 62,434 65,492
The financial statements were approved by the Board of Directors on 28
September 2023 and were signed on its behalf by:
James van den Bergh
Chief Executive Officer
UNAUDITED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
Share Retained Foreign Other Total Non- Total
capital earnings exchange reserves £'000 controlling equity
£'000 £'000 reserve £'000 interest £'000
£'000 £'000
Balance at 1 January 2023 85,706 (24,884) (63) (26,531) 34,228 5,876 40,104
Loss for the period - (5,995) - - (5,995) 16 (5,979)
Other comprehensive income for the period - - 101 - 101 2 103
Total comprehensive loss for the period - (5,995) 101 - (5,894) 18 (5,876)
Balance at 30 June 2023 (Unaudited) 85,706 (30,879) 38 (26,531) 28,334 5,894 34,228
Balance at 1 January 2022 73,548 (17,731) 4 (24,393) 31,428 1,023 32,451
Loss for the period - (3,716) - - (3,716) (849) (4,565)
Other comprehensive income for the period - - 10 - 10 (1) 9
Total comprehensive loss for the period - (3,716) 10 - (3,706) (850) (4,556)
Issuance of shares 12,158 (496) - (2,138) 9,524 - 9,524
Issuance of shares to subsidiary - - - - - 5,000 5,000
Balance at 30 June 2022 (Unaudited) 85,706 (21,943) 14 (26,531) 37,246 5,173 42,419
UNAUDITED CONDENSED INTERIM STATEMENT OF CASH FLOWS
6 months ended 6 months ended Year ended 31 December 2022
Notes 30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Cash flows from operating activities
Loss before tax (6,220) (4,795) (8,020)
Adjustments for
Depreciation of property, plant and equipment 55 55 108
Amortisation of intangible fixed assets 1,637 822 2,377
Impairment of intangible assets 1,250 - -
Finance costs 820 384 974
Share of loss/(profit) from associates 4 (4) (1)
(2,454) (3,538) (4,562)
Working capital adjustments
Movements in loans and advances (2,408) (5,744) (8,029)
(Increase)/decrease in trade and other receivables (415) 566 (34)
Increase/(decrease) in trade and other payables 511 (1,511) 60
Net payables on acquisition of subsidiary - (76) (67)
(2,312) (6,765) (8,070)
Tax credit received/(paid) 88 (4) 668
Interest and finance costs paid (686) (308) (777)
Net cash used in operating activities (5,364) (10,615) (12,741)
Cash flows from investing activities:
Additions to intangible assets (2,204) (1,054) (3,159)
Additions to property, plant and equipment (28) (72) (113)
Acquisition of subsidiaries (157) (1,234) (1,217)
Cash on acquisition of subsidiary - 19 19
Net cash used in investing activities (2,389) (2,341) (4,470)
Cash flows from financing activities:
Issue of ordinary share capital - 9,524 9,524
Issue of ordinary share capital of subsidiary - 5,000 5,000
Net borrowings 13 2,471 3,744 5,370
Lease payments (42) (27) (28)
Net cash generated from financing activities 2,429 18,241 19,866
Net (decrease)/increase in cash and cash equivalents (5,324) 5,285 2,655
Cash and cash equivalents at beginning of the period/year 10,273 7,608 7,608
Effect of foreign exchange rate changes 44 12 10
Cash and cash equivalents at end of the period/year 4,993 12,905 10,273
NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting policies
Basis of preparation
The annual financial statements of TruFin plc are prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
("IFRS").
The condensed set of financial statements included in this Interim Financial
Report has been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting' ('IAS 34'). This condensed set of Financial
Statements has been prepared by applying the accounting policies and
presentation that were applied in the preparation of the TruFin Group's
published Financial Statements for the year ended 31 December 2022.
The condensed set of financial statements included in this Interim Financial
Report for the six months ended 30 June 2023 should be read in conjunction
with the annual audited financial statements of TruFin plc for the year ended
31 December 2022, which were delivered to the Jersey Financial Services
Commission. The audit report for these accounts was unqualified and did not
draw attention to any matters by way of emphasis.
Going concern
The Directors are satisfied that the TruFin Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than 12
months from the date of the report. Accordingly, they continue to adopt the
going concern basis in preparing the condensed financial statements.
Group information
The TruFin Group ("the Group") is the consolidation of;
· TruFin plc,
· TruFin Holdings Limited,
· Oxygen Finance Group Limited, Oxygen Finance Limited and Oxygen
Finance Americas Inc., together the ("Oxygen Group"),
· TruFin Software Limited,
· Satago Financial Solutions Limited, Satago SPV 1 Limited, Satago SPV
2 Limited, Satago Financial Solutions z.o.o, together ("Satago"),
· AltLending (UK) Ltd,
· Vertus Capital Limited and Vertus SPV 1 Limited, together ("Vertus"),
and
· Playstack Limited, Bandana Media Ltd, Playignite Ltd, Playstack
z.o.o, Playstack OY, Foxglove Studios AB, Magic Fuel Games Inc, Playstack Inc
and Playignite Inc, together the ("Playstack Group").
Additionally, the Playstack Group also includes two associate companies
incorporated in the UK which have been accounted for using the equity method.
These are;
· A 49% interest in Snackbox Games Ltd, and
· A 26% interest in Stormchaser Games Ltd.
On 13 March 2023, the Group disposed of its 49% interest in one associate
company, PlayFinder Games Ltd.
On 18 April 2023, Military Games International Limited, a company in which the
Group had a 42% interest was dissolved.
The principal activities of the Group are the provision of niche lending,
early payment services and mobile game publishing.
The financial statements are presented in Pounds Sterling, which is the
currency of the primary economic environment in which the Group operates.
Amounts are rounded to the nearest thousand.
Significant accounting policies and use of estimates and judgements
The preparation of interim consolidated financial statements in compliance
with IAS 34 requires the use of certain critical accounting judgements and key
sources of estimation uncertainty. It also requires the exercise of judgement
in applying the TruFin Group's accounting policies. There have been no
material revisions to the nature and the assumptions used in estimating
amounts reported in the annual audited financial statements of TruFin plc for
the year ended 31 December 2022.
The accounting policies, presentation and methods of computation in the
audited financial statements have been followed in the condensed set of
financial statements.
2. General information
TruFin plc is a public limited company incorporated in Jersey. The shares of
the Company are listed on the Alternative Investment Market. The address of
the registered office is 26 New Street, St Helier, Jersey, JE2 3RA.
A copy of this Interim Financial Report including Condensed Financial
Statements for the period ended 30 June 2023 is available at the Company's
registered office and on the Company's investor relations website
(www.trufin.com).
3. Gross revenue
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Interest income 2,093 1,003 2,619
Total interest income 2,093 1,003 2,619
EPPS* contracts 1,939 1,519 3,335
Consultancy fees 135 247 597
Implementation fees 1,015 412 1,644
Subscription fees 841 777 1,607
Total fee income 3,930 2,955 7,183
IAP revenue 80 207 342
Advertising revenue 78 299 453
Console revenue 2,316 1,816 5,521
Brand revenue - 1 1
Total publishing income 2,474 2,323 6,317
Gross revenue 8,497 6,281 16,119
*Early Payment Programme Services
4. Segmental reporting
The results of the Group are broken down into segments based on the products
and services from which it derives its revenue:
Short term finance:
Provision of invoice factoring and succession financing for the IFA space. For
results during the reporting period, this corresponds to the results of
Satago, Vertus and AltLending.
Payment services:
Provision of Early Payment Programme Services. For results during the
reporting period, this corresponds to the results of the Oxygen Group.
Publishing:
Publishing of video games. For results during the reporting period, this
corresponds to the results of the Playstack Group.
Other:
Revenue and costs arising from investment activities. For results during the
reporting period, this corresponds to the results of TruFin Software Limited,
TruFin Holdings Limited and TruFin plc.
The results of each segment, prepared using accounting policies consistent
with those of the Group as a whole, are as follows:
Short term finance Payment services
6 months ended 30 June 2023 £'000 £'000 Publishing Other Total
(Unaudited) £'000 £'000 £'000
Gross revenue 3,241 2,748 2,490 18 8,497
Cost of sales (908) (521) (1,135) - (2,564)
Net revenue 2,333 2,227 1,355 18 5,933
Loss before tax (3,256) (493) (1,378) (1,093) (6,220)
Taxation (85) 104 222 - 241
Loss for the period (3,341) (389) (1,156) (1,093) (5,979)
Total assets 33,279 7,892 20,781 482 62,434
Total liabilities (22,161) (1,816) (3,532) (697) (28,206)
Net assets 11,118 6,076 17,249 (215) 34,228
Short term finance Payment services
6 months ended 30 June 2022 £'000 £'000 Publishing Other Total
(Unaudited) £'000 £'000 £'000
Gross revenue 1,491 2,467 2,323 - 6,281
Cost of sales (441) (398) (1,108) - (1,947)
Net revenue 1,050 2,069 1,215 - 4,334
Loss before tax (2,298) (232) (1,085) (1,180) (4,795)
Taxation (1) - 231 - 230
Loss for the period (2,299) (232) (854) (1,180) (4,565)
Total assets 30,837 8,208 19,406 6,039 64,490
Total liabilities (16,907) (1,859) (2,572) (733) (22,071)
Net assets 13,930 6,349 16,834 5,306 42,419
*adjusted loss before tax excludes share-based payment expense
Short term finance Payment services
Year ended 31 December 2022 £'000 £'000 Publishing Other Total
(Audited) £'000 £'000 £'000
Gross revenue 4,469 5,311 6,330 9 16,119
Cost of sales (1,153) (889) (3,033) - (5,075)
Net revenue 3,316 4,422 3,297 9 11,044
Loss before tax (3,879) (220) (1,569) (2,352) (8,020)
Taxation 218 395 601 - 1,214
Loss for the year (3,661) 175 (968) (2,352) (6,806)
Total assets 34,200 8,258 20,407 2,627 65,492
Total liabilities (19,747) (1,792) (2,911) (938) (25,388)
Net assets 14,453 6,466 17,496 1,689 40,104
*adjusted loss before tax excludes share-based payment expense
5. Staff costs
Analysis of staff costs:
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Wages and salaries 5,392 5,269 10,365
Consulting costs 452 193 379
Social security costs 662 744 1,411
Pension costs arising on defined contribution schemes 231 227 454
6,737 6,433 12,609
Consulting costs are recognised within staff costs where the work performed
would otherwise have been performed by employees. Consulting costs arising
from the performance of other services are included within other operating
expenses.
Average monthly number of persons (including Executive Directors) employed:
6 months ended 6 months ended 30 June 2022 Year ended 31 December 2022
30 June 2023 (Unaudited) (Audited)
(Unaudited) Number Number
Number
Management 16 18 17
Finance 8 11 10
Sales & marketing 43 34 30
Operations 57 50 78
Technology 60 54 43
184 167 178
Directors' emoluments
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Combined remuneration 376 376 715
6. Employee share-based payment transactions
The employment share-based payment charge comprises:
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Performance Share Plan and Joint Share Ownership Plan Founder Award - - -
Performance Share Plan Market Value Award - - -
Performance Share Plan 2019 Award - - -
Performance Share Plan 2018 Award - - -
Total - - -
Performance Share Plan and Joint Share Ownership Plan Founder Award ("PSP and
JSOP")
The final 25% of Founder Awards held by James van den Bergh vested on 22
February 2022 when the share price was £0.81. As a result, 395,558 shares
subject to the Joint Share Ownership Plan became fully owned by the EBT and
James' nil cost option under the Performance Share Plan vested in respect of
the same number of shares.
Performance Share Plan Market Value Award ("PSP Market Value")
On 21 February 2018, options to acquire 4,868,420 shares were granted to the
senior management team. The vesting of this award is based on market‐based
performance conditions. The vesting of these awards is subject to the holder
remaining an employee of the Company and the Company's share price achieving
five distinct milestones - vesting at 20% each milestone. The exercise price
of the awards at the time of grant was £1.90 per share. A Monte Carlo
simulation was used to determine the fair value of these options. The model
used an expected volatility of 10% and a risk free rate of 1.3%.
In order to reflect the impact of the demerger, the PSP Market Value Award was
split into two:
· Part of the award remained as an option in respect of TruFin plc
shares ("TruFin Market Value Award")
· Part of the award became an award in respect of DFC shares ("DFC
market Value Award")
The TruFin Market Value Award is on the same terms as the original PSP Market
Value Award except that:
· The exercise price was adjusted to £0.85, and the share price
milestones were adjusted to reflect the demerger
· The exercise price was further adjusted to £0.80, and the share
price milestones were further adjusted, to reflect the return of value to
shareholders in June 2019
· The exercise price was further adjusted to £0.71, and the share
price milestones were further adjusted to reflect the return of value to
shareholders in December 2019
The modification has not resulted in a change in the valuation of the award
and this continues to be recognised over the remainder of the original vesting
period.
Performance Share Plan 2018 Award ("PSP 2018")
The unvested performance condition of this award had not been met at the end
of the vesting period.
Performance Share Plan 2019 Award ("PSP 2019")
The performance conditions had not been met at the end of the vesting period.
7. Loss before income tax
Loss before income tax is stated after charging:
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Depreciation of property, plant and equipment 55 55 108
Amortisation of intangible assets 1,637 822 2,377
Staff costs including share-based payments charge 6,737 6,433 12,609
8. Taxation
Analysis of tax credit/charge recognised in the period/year
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Current tax credit (326) (230) (1,267)
Deferred tax charge 85 - 53
Total tax credit (241) (230) (1,214)
Deferred tax asset
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Balance at start of the period/year 250 303 303
Debit to the statement of comprehensive income (85) - (53)
Balance at end of the period/year 165 303 250
Comprised of:
Losses 165 303 250
Total deferred tax asset 165 303 250
A deferred tax asset was recognised in 2021 in respect of Vertus Capital SPV 1
Limited, as it became profitable.
9. Intangible assets
Software licences and similar assets Separately identifiable intangible assets
Client contracts
Goodwill Total
£'000 £'000 £'000 £'000 £'000
Cost 6,399 4,773 3,237 16,569 30,978
At 1 January 2023
Additions 441 1,763 - - 2,204
Disposals (114) - - - (114)
Exchange differences (1) (24) - - (25)
At 30 June 2023 (unaudited) 6,725 6,512 3,237 16,569 33,043
Amortisation (2,496) (2,082) (1,581) - (6,159)
At 1 January 2023
Charge for the period (521) (792) (324) - (1,637)
Disposals 114 - - - 114
Exchange differences - 15 - - 15
At 30 June 2023 (unaudited) (2,903) (2,859) (1,905) - (7,667)
Accumulated impairment losses (408) - - - (408)
At 1 January 2023
Charge - - - (1,250) (1,250)
At 30 June 2023 (unaudited) (408) - - (1,250) (1,658)
Net book value
At 30 June 2023 (unaudited) 3,414 3,653 1,332 15,319 23,718
At 31 December 2022 3,495 2,691 1,656 16,569 24,411
Software licences and similar assets Separately identifiable intangible assets
Client contracts
Goodwill Total
£'000 £'000 £'000 £'000 £'000
Cost 5,490 2,579 1,642 15,746 25,457
At 1 January 2022
Additions 905 2,254 - - 3,159
On Acquisition - 3 1,595 823 2,421
Disposals - (75) - - (75)
Exchange differences 4 12 - - 16
At 31 December 2022 6,399 4,773 3,237 16,569 30,978
Amortisation (1,607) (1,181) (1,070) - (3,858)
At 1 January 2022
Charge (889) (977) (511) - (2,377)
Disposals - 75 - - 75
Exchange differences - 1 - - 1
At 31 December 2022 (2,496) (2,082) (1,581) - (6,159)
Accumulated impairment losses (408) - - - (408)
At 1 January 2022
At 31 December 2022 (408) - - - (408)
Net book value
At 31 December 2022 3,495 2,691 1,656 16,569 24,411
At 31 December 2021 3,475 1,398 572 15,746 21,191
Client contracts comprise the directly attributable costs incurred at the
beginning of an Early Payment Scheme Service contract to revise a client's
existing payment systems and provide access to the Group's software and other
intellectual property. These implementation costs are comprised primarily of
employee costs.
The useful economic life for each individual asset is deemed to be the term of
the underlying Client contract (generally 5 years) which has been deemed
appropriate and for impairment review purposes, projected cash flows have been
discounted over this period.
The amortisation charge is recognised in fee expenses within the statement of
comprehensive income, as these costs are incurred directly through activities
which generate fee income.
Software, licenses and similar assets comprises separately acquired software,
as well as costs directly attributable to internally developed platforms
across the Group. These directly attributable costs are associated with the
production of identifiable and unique software products controlled by the
Group and are probable of producing future economic benefits. They primarily
include employee costs and directly attributable overheads.
A useful economic life of 3 to 5 years has been deemed appropriate and for
impairment review purposes projected cash flows have been discounted over this
period.
The amortisation charge is recognised in depreciation and amortisation on
non-financial assets within the statement of comprehensive income.
Goodwill and "Separately identifiable intangible assets" arise from
acquisitions made by the Group.
Vertus
In July 2019, the Group converted into ordinary shares its existing
convertible loan with Vertus Capital in full satisfaction and discharge of the
loan. This, together with a further cash payment, gave the Group 51% ownership
of Vertus Capital and Vertus SPV 1.
Goodwill of £1,714,000 arose from this transaction and has been included
within the short term finance segment of the business. In 2021, the Group
increased its ownership of Vertus Capital from 51% to 53.8%, resulting in a
£50,000 adjustment to Goodwill.
Separately identifiable intangible assets of £255,000 primarily related to
the value of existing third party relationships on acquisition have been
identified.
These are being amortised over 5 years and the amortisation charge for the
year was £26,000 (2022: £51,000).
Net Book value of these assets at 30 June 2023 was £55,000 (2022: £81,000).
In August 2023, the Group accepted a non-binding offer for its shares in
Vertus Capital. Following this, Goodwill related to this transaction has been
impaired by £1,250,000.
Goodwill related to this transaction excluding Separately identifiable
intangible assets at 30 June 2023 was £158,000 (2022: £1,408,000).
10. Property, plant and equipment
Fixtures & Computer equipment Right-of-Use Asset
fittings Total
Group £'000 £'000 £'000 £'000
Cost 139 276
At 1 January 2023 96 511
Additions 14 14 - 28
Exchange differences 1 (1) - -
At 30 June 2023 154 109 276 539
Depreciation (60) (61) (44) (165)
At 1 January 2023
Charge (15) (12) (28) (55)
Exchange differences - 1 - 1
At 30 June 2023 (75) (72) (72) (219)
Net book value
At 30 June 2023 79 37 204 320
At 31 December 2022 79 34 232 345
Fixtures & Computer equipment Right-of-Use Asset
fittings Total
Group £'000 £'000 £'000 £'000
Cost 53
At 1 January 2022 78 429 560
Additions 86 27 276 389
Disposals - (9) (429) (438)
At 31 December 2022 139 96 276 511
Depreciation (44) (44) (407) (495)
At 1 January 2022
Charge (16) (26) (66) (108)
Disposals - 9 429 438
At 31 December 2022 (60) (62) (44) (166)
Net book value
At 31 December 2022 79 34 232 345
At 31 December 2021 9 34 22 65
11. Loans and advances
30 June 2023 31 December 2022
(Unaudited) (Audited)
£'000 £'000
Total loans and advances 26,714 24,215
Less: loss allowance (144) (54)
26,570 24,161
Past due receivables relating to loans and advances are analysed as follows:
30 June 2023 31 December 2022
(Unaudited) (Audited)
£'000 £'000
Neither past due nor impaired 26,142 23,875
Past due: 0-30 days 243 129
Past due: 31-60 days 49 77
Past due: 61-90 days 7 41
Past due: more than 91 days 48 39
Impaired 81 -
26,570 24,161
The financial risk management procedures disclosed in the 31 December 2022
audited financial statements have been and remain in place for the period to
30 June 2023.
12. Share capital
Share Capital Total
£'000 £'000
94,182,943 shares at £0.91 per share at 30 June 2023 (unaudited) 85,706 85,706
All ordinary shares carry equal entitlements to any distributions by the
Company. No dividends were proposed by the Directors for the period ended 30
June 2023.
13. Borrowings
30 June 2023 31 December 2022
(Unaudited) (Audited)
£'000 £'000
Loans due within one year 5,449 1,783
Loans due in over one year 15,688 16,764
21,137 18,547
Movements in borrowings during the period/year
The below table identifies the movements in borrowings during the period/year.
£'000
Balance at 1 January 2023 18,547
Funding drawdown 5,789
Interest expense 758
Fee amortisation 55
Origination fees paid (41)
Repayments (3,278)
Interest paid (686)
Exchange differences (7)
Balance at 30 June 2023 (Unaudited) 21,137
Balance at 1 January 2022 12,985
Funding drawdown 8,707
Interest expense 852
Fee amortisation 110
Repayments (3,337)
Interest paid (777)
Exchange differences 7
Balance at 31 December 2022 (Audited) 18,547
14. Earnings per share
Earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in
issue during the period/year.
The calculation of the basis and adjusted earnings per share is based on the
following data:
6 months ended 6 months ended Year ended 31 December 2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) £'000
£'000 £'000
Number of shares
At period/year end 94,182,943 94,182,943 94,182,943
Weighted average 94,182,943 86,727,509 90,485,862
Earnings attributable to ordinary shareholders £'000 £'000 £'000
Loss after tax attributable to the owners of TruFin plc (5,995) (3,716) (6,637)
Earnings per share* Pence Pence Pence
Basic and Diluted (6.4) (4.3) (7.3)
* All Earnings per share figures are undiluted and diluted.
Management has been granted 5,451,578 share options in TruFin plc (See note 6
for details). These could potentially dilute basic EPS in the future, but were
not included in the calculation of diluted EPS as they are antidilutive for
the periods presented, as the Group is loss making.
15. Related party disclosures
Transactions with directors
Key management personnel disclosures are provided in notes 5 and 6.
During the period, the Group made loans to Storm Chaser UG, a company based in
Germany. Storm Chaser UG is 100% owned by Storm Chaser Games - an associate
company of Playstack (see note 1). The balance of the loans including interest
at the reporting date was £756,000 (2022: £525,000)
16. Post balance sheet events
On 10 July 2023, the Company issued 11,653,744 ordinary shares through a
Placing and an Open Offer. These were issued at £0.65 per share, raising
gross proceeds of £7,575,000.
On 27 July 2023, the Company awarded the first three tranches of awards under
a new Long Term Incentive Plan ("LTIP"). These are in the form of options over
a total of 3,116,667 Ordinary Shares (the "Options") to the Chief Executive
Officer and other senior employees.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FZGZLGRDGFZZRecent news on Trufin
See all newsREG - TruFin PLC TruFin PLC - Holding(s) in Company
AnnouncementREG - TruFin PLC TruFin PLC - Block Admission Six Monthly Return
AnnouncementREG - TruFin PLC TruFin PLC - CEO Incentive Plan
AnnouncementREG - TruFin PLC TruFin PLC - Final Results for the 12 months ended 31 Dec 2024
AnnouncementREG - TruFin PLC - Notice of Results and Investor Presentation
Announcement