REG - Wise PLC - Unaudited interim results for period ended 30/9/24
06/11/2024 07:00
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RNS Number : 0769L Wise PLC 06 November 2024
06 November 2024
Wise plc
Unaudited interim results for the six months ended 30 September 2024
Long term investments driving customer and volume growth
"We are pleased with the progress over the first six months of the year, with
our key financial metrics maintaining a healthy growth trajectory as we
continue investing in the infrastructure that will ultimately enable us to
move trillions through our market-leading network.
As a result of these investments our infrastructure is developing quickly.
This week we launched our sixth live direct connection to a domestic payment
system, this time in the Philippines. This follows regulatory approvals to
also integrate directly with the domestic payment systems in Brazil and Japan,
taking the number of direct connections to eight once integrated.
Enhancing our infrastructure makes Wise increasingly efficient. 63% of
transfers are now completed instantly and reducing unit costs allowed us to
lower prices with the average cross border take rate at 62bps, 5bps lower than
a year ago.
Our customers value the speed, convenience and price we offer, with over 70%
of new customers joining Wise through recommendations by existing customers.
This drove another six months of strong financial performance with YoY growth
in active customers of 25%, underlying income of 19%, cross border volume of
19% and a 31% increase in customer holdings(( 1 (#_ftn1) ))."
- Kristo Käärmann, Co-founder and Chief Executive Officer
Highlights for the six months ended 30 September 2024(( 2 (#_ftn2) ))
We operate in a huge, expanding market, with a small but growing share
● Active customers increased by 25%; in H1 FY25 alone we helped
11.4m people and businesses move and manage their money around the world.
● Our customers moved £68.4bn with us in H1 FY25, an increase of
19% vs H1 FY24 (21% on a constant currency basis).
The value of our infrastructure is growing quickly, enhanced through our
investments
● Instant payments delight our customers and make clear the quality
of our network; 63% of payments were instant in Q2 FY25, 83% within an hour
and 94% within 24 hours.
● Our operational capabilities and controls played a key role in
receiving regulatory approval to directly integrate into the domestic payments
systems in Brazil, Japan and the Philippines.
Customer centric product development driving an increasingly global
proposition
● In the Philippines, alongside the launch of InstaPay, we also
released the Wise Account as well as the ability to send money out of the
country.
● Wise Platform welcomed nine new partners, including Nubank
(Brazil), Qonto (France) and AbbeyCross (UK) during the period and this week
we were also delighted to announce a new partnership with Standard Chartered.
Financials - underlying basis(( 3 (#_ftn3) ))
Half-year ended 30 September
2024 2023 YoY Movement
£m £m £m %
Revenue 591.9 498.2 19%
Underlying interest income (first 1% yield) 70.5 57.1 23%
Underlying income 662.4 555.3 19%
Cost of sales (152.9) (160.7) (5%)
Net credit losses on financial assets (4.5) (6.4) (30%)
Underlying gross profit 505.0 388.2 30%
Administrative expenses (366.7) (296.5) 24%
Net interest income from corporate investments 15.9 7.3 118%
Other operating income, net 2.3 3.9 (41%)
Underlying operating profit 156.5 102.9 52%
Finance expense (9.4) (9.3) 1%
Underlying profit before tax 147.1 93.6 57%
Interest income above the first 1% yield 230.2 154.0 49%
Benefits paid relating to customer balances (84.8) (53.3) 59%
Reported profit before tax 292.5 194.3 51%
Income tax credit/(expense) (75.2) (53.7) 40%
Profit for the period 217.3 140.6 55%
Underlying basis of reporting - margins (%)
Underlying gross profit margin 76.2% 69.9% 6.3%
Underlying profit before tax margin 22.2% 16.8% 5.4%
Adjusted EBITDA - as previously reported
Adjusted EBITDA 325.7 241.1 35.1%
Adjusted EBITDA margin % 40.3% 36.7% 3.6%
Growth Metrics
H1 FY2025 H1 FY2024 YoY Movement
Active customers (thousand) 11,367 9,120 25%
Personal (thousand) 10,844 8,648 25%
Business (thousand) 523 472 11%
Cross border volume (£ billion) 68.4 57.4 19%
Personal (£ billion) 50.6 42.3 20%
Business (£ billion) 17.7 15.0 18%
Customer balances (£ billion) 14.7 12.3 20%
Personal (£ billion) 9.0 7.0 29%
Business (£ billion) 5.7 5.3 8%
Cross border revenue (£ million) 419.1 384.4 9%
Personal (£ million) 334.3 303.7 10%
Business (£ million) 84.8 80.7 5%
Card and other revenue (£ million) 172.8 113.8 52%
Personal (£ million) 130.1 83.5 56%
Business (£ million) 42.7 30.3 41%
Underlying interest income (first 1pct yield) (£ million) 70.5 57.1 23%
Personal (£ million) 42.5 32.1 32%
Business (£ million) 28.0 25.0 12%
Underlying income (£ million) 662.4 555.3 19%
Personal (£ million) 506.9 419.3 21%
Business (£ million) 155.5 136.0 14%
Interest income (above the first 1pct yield) (£ million) 230.2 154.0 50%
Personal (£ million) 138.4 86.6 60%
Business (£ million) 91.8 67.4 36%
Benefits paid relating to customer balances (£ million) (84.8) (53.3) 59%
Personal (£ million) (51.3) (31.0) 65%
Business (£ million) (33.5) (22.3) 50%
Cross-border take rate (%) 0.62% 0.67% -5 bps
Note: Differences between 'total' rows and the sum of the constituent
components of Personal and Business are due to rounding.
An update from Kristo Kaarmann, Co-founder and Chief Executive Officer
Our mission is to build the best way to move and manage the world's money.
Over the last six months we continued to make progress on our long term
journey, serving 11.4m active customers, that's 2.8x growth over the last four
years. This growth in customers has driven cross border volume to grow by 2.9x
over the last four years and was the main driver behind a 3.4x increase in
underlying income and a 7.7x increase in underlying profit before tax.
We also continued to develop our global payments network in the period,
enabling more instant payments and lower pricing over time, whilst also
delivering strong profitability and cash generation.
Wise has the potential to move trillions rather than billions around the world
A massive problem continues to exist for people and businesses around the
world; moving and managing money internationally is still broken. It remains
expensive, slow, inconvenient and opaque.
The opportunity that comes with solving this problem is huge. We have less
than 5% and 1% share respectively in the expanding personal and Small-Medium
Business (SMB) market segments. Including the large enterprise segment of the
market, the cross border market across these three segments is estimated to be
more than £27 trillion.
If we maintain our focus on this long-term opportunity, Wise has the potential
to move trillions rather than billions around the world as 'the' network for
the world's money for cross-border transfers, as well as being the market
leader in providing people and businesses with an account that is truly
international. With this opportunity will come increased expectations and
scrutiny from regulators, as we become more important to local financial
systems. Therefore a key part of achieving our potential will be continuing to
invest in developing our global risk and financial crime infrastructure.
Wise is still very early in its journey and its potential is substantial. We
are laser focused on delivering what's needed to get us there.
An infrastructure that enables the instant movement of money around the world
at the lowest possible unit cost
We continue to deepen our infrastructure, enhancing how we operate across our
network which spans over 160 countries, with 40 currencies.
We hold over 65 licences and have six direct connections to local payment
systems currently live, both of which allow us to significantly simplify
operations, increasing speed and reducing costs. Where we have not yet
deepened our infrastructure with direct connections, we operate with a robust
network with over 90 local bank gateways for redundancy to ensure the
reliability of our service.
So far in this fiscal year we've been delighted to receive a number of
additional regulatory approvals.
Firstly, in India, we secured approvals to further unlock outward transfers,
removing a previous USD 5,000 cap. This allows us to improve our proposition
and grow our customer share in India, which is expected to help us reduce the
cost of sending to and from India over time.
Secondly, in Australia, we have been granted an Australian Financial Services
Licence for Investments, enabling us to bring our investment product 'Assets'
to Australia later this year.
In addition to these approvals, we were also delighted to be given approval in
Brazil and Japan to begin integrating with their respective domestic payment
systems. Once integrated, these will bring our tally of such integrations to
eight having also recently launched the Philippines direct connection.
These connections give us full end-to-end control of the payment network. They
are typically multi-year projects and complex integrations but once fully
rolled out to all of our customers, they enable payments that are consistently
instant and are expected to reduce bank and partner fees significantly.
As we shared in June, we're pleased that we're realising a return on our
investments in our infrastructure. 63% of transfers are instant on our
network. This means they go from source to destination account in less than 20
seconds end to end. This is something we are very proud of and is something we
believe is unique to Wise. Our unit costs are also scaling, allowing us to
invest in reducing prices. In Q2 FY25 our average cross border take rate was
8bps lower YoY at 59bps, entering Q3 FY25 slightly below this level.
Our investments in enhancing our infrastructure lead to outcomes like this in
speed and price and we remain committed to investing in our infrastructure to
further improve these over time.
It's reasonable to expect that in ten years, someone can transfer $10,000
across currencies for $10, compared to the current banks' price of $200-$400.
We intend Wise to be the one operating these transactions at that price point,
with our cost base brought down to $5 or less. It will be profitable and very
valuable, when the cross-border volume on our platform is in the trillions.
We won't be able to achieve this level of efficiency overnight. Nor will the
customer response be immediate as we iterate prices, but we believe it's
inevitable that the lowest priced provider with the best experience will win
the scale needed over time to become one of the most valuable providers of
financial services in the world.
Our customer growth continues to be word-of-mouth led, thanks to us building
products that customers love, at prices worth talking about
With the Wise Account, Wise Business, and Wise Platform, we serve millions of
people, small businesses, financial institutions and enterprises all over the
world.
With continued investment in features to make our customers' lives easier,
combined with low cost, fast payments, the quality of our account speaks for
itself. We consistently see around two-thirds of new customers join us through
word-of-mouth from existing customers. This sustained virality allows us to
acquire customers at a low cost, further reinforcing the strength of the
platform.
As we've built and launched more features to help people and businesses move
and manage their money, adoption of the account has continued to increase. In
Q2 FY25, 53% of active personal customers used multiple features of the Wise
Account, up from 44% in Q2 FY24. For businesses, this adoption rate was 60%,
up from 58% in Q2 FY24.
More customers using the account features has led to an increase in customer
holdings with Wise too. As at 30 September 2024 customers held £18.5bn with
us, 31% higher than this time last year and this includes over £3.8bn of
funds in the 'Assets' feature(( 4 (#_ftn4) )).
As we enhance our infrastructure, develop our products and reduce pricing, we
see a greater number of Wise Platform partners choosing Wise to help them and
their customers with their cross border needs.
In the last six months we began new Wise Platform partnerships with Nubank
(Brazil), Qonto (France) and AbbeyCross (UK). Most recently we were delighted
to announce a partnership with Standard Chartered to power the bank's
cross-border payment service, SC Remit, enabling their customers in Asia and
in the Middle East to send money in 21 currencies including USD, CAD, EUR,
GBP, SGD, HKD, JPY in a matter of seconds.
We're confident in the outlook for the second half of the year and beyond
Over the last six months we've made important steps in the enhancement of our
infrastructure which are going to contribute to further improvements to speed
and unit cost over time. Wise will become increasingly faster, cheaper and
more convenient: an ideal infrastructure partner via Wise Platform.
To make this vision a reality, now is the time to invest in long term growth.
We expect the investments in pricing in the first half of FY25 to move us
closer to achieving our target underlying profit before tax margin range of
13-16% in H2 FY25, from an elevated position of 22% in the first half.
We are making very fast progress on our mission. Just over a year ago we had
four direct connections and today we are very close to having twice this
number live, with all the benefits that flow from this. With further
investments planned, I'm more confident than ever that Wise is on the path to
creating an exceptionally valuable company for customers and shareholders.
Kristo
A financial update from Emmanuel, our newly appointed CFO
Wise's mission is very clear, and we are investing in the infrastructure and
products customers need to move and manage their money around the world. Over
time this will enable Wise to become 'the' network for the world's money.
This strategy is working: over 11m customers used Wise for cross border
transactions in the last six months, 25% more than the prior year, and with
many customers increasingly using Wise as the solution for banking
internationally.
This has resulted in a strong financial performance for the period with 19%
underlying income growth and high levels of profitability with an underlying
profit before tax margin of 22%. This margin was temporarily elevated above
our target range of 13-16%, due to the timing of price investments which,
having been made in H1, will reduce the margin towards our target range in H2
FY25.
More customers, using more products: the main driver of 19% underlying income
growth
In the first six months, over 25% more active customers used Wise to send or
convert money internationally. Of the 11.4m active customers in H1 FY25, 10.8m
were personal customers (25% YoY) and 523k were business customers (+11%
YoY).
Business customer growth has been lighter over the last year due to the impact
of pausing of onboarding in the UK and EU in the second half of FY24. We have
been open to new customers again in these markets since the beginning of FY25
and have seen some improvement in growth as a result.
Our customers sent or converted £68.4bn of volume in H1 FY25. This is a 19%
increase on last year (21% increase on a constant currency basis), with growth
in volumes continuing to be driven by higher numbers of active customers.
Compared to volume growth of 19%, revenue from cross border transactions grew
9% to £419.1m for the period, as we reinvested efficiency gains through lower
pricing to drive further growth. This is only possible thanks to our long term
investments in infrastructure and a relentless focus on efficiency. In doing
so, we were able to reduce the cross border take rate 5bps compared to the
prior year, from 67bps to 62bps.
Wise Account adoption is driving a wider use of products, higher rates of
customer activity and retention. Card and other revenue (predominantly
interchange revenue) increased by 52% to £172.8m, while customers balances
held in the Wise Account grew 20% £14.7bn, the first 1% yield on which
contributed £70.5m to underlying income in the period (up 23%, in line with
average balances).
As a result, underlying income grew 19% to £662.4m, representing a CAGR of
36% over the last four years.
Underlying gross profit margin representing capacity for investment
Underlying gross profit grew 30% to £505.0m benefiting from higher revenue
from active customer growth, Wise Account adoption and a temporarily higher
price for cross border services ahead of reinvesting unit cost reductions.
The underlying gross profit margin was 76% in H1 FY25 as cost of sales as a
proportion of underlying income reduced from 30% to 24% YoY in H1 FY25, driven
by c.3ppt of efficiency gains due to operational improvements and c.3ppt
variability in some cost types that were temporarily lower in the period, such
as FX costs.
Much of the excess underlying gross profit margin, amount deemed to be
sustainable, was reinvested into pricing reductions through the first half of
the year, with a lower underlying gross profit margin therefore anticipated in
H2 FY25.
Expense growth in line with business growth
Our underlying gross profit allows us to remain highly profitable while also
allowing us to fund significant investment in our operational and corporate
teams, and to fund investment in growth through product development,
marketing, and improved levels of service.
Administrative expenses increased by 24% in H1 FY25 to £366.7m as we continue
to invest in current and future growth opportunities. Within this, third party
costs increased faster than employee benefit expenses as we continue to use a
portfolio of specialist outsourcing providers for specific elements of
servicing customers, allowing us to flex capacity up and down more quickly, at
a lower cost, but with the same high standards being applied.
In line with our expectations, we have grown the number of Wisers to over
6,000 by the end of the first half of FY25. These Wisers help us on our
mission; building products, improving our infrastructure, supporting our core
functions and helping to attract and serve even more customers.
Highly profitable with limited reliance on interest income
In the first half of FY25 we generated an underlying profit before tax of
£147.1m, a 57% increase over last year with an underlying profit before tax
margin that remained elevated at 22%.
Our 'interest income above the first 1% yield' was £230.2m in the period, up
49% on the prior year as a result of the 23% growth in average customer
balances and, on average, higher central bank rates.
In calculating our IFRS profit before tax, we add this additional interest
income to our underlying profit before tax and deduct the value of 'benefits
paid relating to customer balances' of £84.8m.
As per our interest income framework, of this £230.2m of interest income, it
is intended for 20% (£46.0m) to be retained while aiming to return the
remaining 80% (£184.2m) to customers. We partly achieved this with £84.8m
being paid to customers in the period, leaving £99.4m which was incidentally
retained, the majority of which relates to the UK where we are currently
unable to directly pay interest to Wise Account holders under the terms of our
licence.
Reported profit before tax increased significantly to £292.5m with earnings
per share for the six months at 21.1p.
Strong and growing balance sheet
As at 30 September 2024, we held £15.9bn of cash and highly liquid investment
grade assets, up 10% from £14.5bn at the end of FY2024. This includes assets
in respect of the £14.7bn of customer balances. It also includes £1.1bn of
our 'own cash' (£1.1bn at the end of FY2024), with the increase from our
operating performance largely offset by a reduction in our rolling credit
facility drawings as we repaid the debt finance given our strong cash
position.
We are well capitalised for the future and as at 30 September 2024, our Group
eligible capital was £883.0m (excluding un-audited FY25 profits),
significantly above our minimum regulatory capital requirements.
Our capital position, built through sustained profitability, enabled us to
initiate a programme in FY23 to reduce the dilutive impact on share count that
arises through issuing new stock to satisfy stock based compensation. We
expect to deploy c.£70m through this programme in FY25, purchasing shares to
cover new grants throughout the year and as at 30 September 2024 we have
completed £34.6m of share purchases.
Our outlook for FY25 and beyond
We're building a business with world class fundamentals with the potential to
scale volumes from billions to trillions, generating exceptional value for
both the customers and owners of Wise.
With the initiation of what we hope to be a progression of price reductions as
we drive towards this mission, we continue to expect underlying income growth
of 15-20% in both FY25 and over the medium term from FY24.
We also continue to target a medium term underlying profit margin of between
13-16%, a range that we expect to move closer to achieving in the second half
of FY25.
Emmanuel Thomassin
UK listing reforms
In July, the FCA introduced reforms to the UK listing regime, replacing the
premium listing segment with the Equity Shares (Commercial Companies) Category
(ESCC) and revising the UK listing rules. Wise's listing was automatically
transferred from the standard listing segment onto the Equity Shares
(Transition) Category.
To be eligible to step up to the ESCC, in addition to needing FCA approval to
transfer, Wise would also need to amend certain parts of its Articles of
Association, subject to approval from shareholders.
The Board is consulting extensively with shareholders and will provide an
update in due course.
Results presentation
A presentation of the half-year year results will be held at 9.30am GMT
Wednesday, 6 November 2024 at Wise's London offices in Shoreditch. We invite
you to join the live stream using this link: https://vimeo.com/event/4661398.
Enquiries
Martin Adams / Lawrence Nates - Investor Relations
owners@wise.com (mailto:owners@wise.com)
Sana Rahman - Communications
press@wise.com
Brunswick Group
Charles Pretzlik / Sarah West / Nick Beswick
Wise@brunswickgroup.com
+44 (0) 20 7404 5959
About Wise
Wise is a global technology company, building the best way to move and manage
the world's money. With Wise Account and Wise Business, people and businesses
can hold over 40 currencies, move money between countries and spend money
abroad. Large companies and banks use Wise technology too; an entirely new
network for the world's money.
Co-founded by Kristo Käärmann and Taavet Hinrikus, Wise launched in 2011
under its original name TransferWise. It is one of the world's fastest growing
tech companies and is listed on the London Stock Exchange under the ticker
WISE.
In fiscal year 2024, Wise supported around 12.8 million people and businesses,
processing approximately £118.5 billion in cross-border transactions, and
saving customers over £1.88 billion.
DISCLAIMER
This report may include forward-looking statements, which are based on current
expectations and projections about future events. These statements may
include, without limitation, any statements preceded by, followed by or
including words such as "target", "believe", "expect", "aim", "intend", "may",
"anticipate", "estimate", "forecast," "plan", "project", "will", "can have",
"likely", "should", "would", "could" and any other words and terms of
similar meaning or the negative thereof. These forward-looking statements are
subject to risks, uncertainties and assumptions about Wise and its
subsidiaries. In light of these risks, uncertainties and assumptions, the
events in the forward-looking statements may not occur.
Past performance cannot be relied upon as a guide to future performance and
should not be taken as a representation that trends or activities underlying
past performance will continue in the future, and the statements in this
report speak only as at the date of this report. No representation or warranty
is made or will be made that any forward-looking statement will come to pass
and there can be no assurance that actual results will not differ materially
from those expressed in the forward-looking statements.
Wise expressly disclaims any obligation or undertaking to update, review or
revise any forward-looking statements contained in this report and disclaims
any obligation to update its view of any risks or uncertainties described
herein or to publicly announce the results of any revisions to the
forward-looking statements made in this report, whether as a result of new
information, future developments or otherwise, except as required by law.
The information contained in this report is not intended to provide, and
should not be relied upon for, investment, tax, legal or financial advice. To
the maximum extent permitted by applicable law and regulation, Wise disclaims
all representations, warranties, conditions and guarantees, whether express,
implied, statutory or of other kind. To the maximum extent permitted by
applicable law and regulation, Wise shall not be liable for any loss, damage
or expense whatsoever, whether direct or indirect, howsoever arising, whether
in contract, tort (including negligence), strict liability or otherwise, for
direct, indirect, incidental, consequential, punitive or special damages
arising out of or in connection with this document, including (without
limitation) any course of action taken on the basis of the same
Principal risks and uncertainties
The principal risks and uncertainties that the Group faces for the rest of the
financial year
are consistent with those previously reported in the Annual Report and
Accounts 2024. For
a more detailed overview of how we manage our risks at Wise, please refer to
the 'Risk
Management' section on pages 62 to 77 of the Annual Report.
Responsibility statement of the directors in respect of the interim financial
statements
The directors confirm that these condensed interim financial statements have
been
prepared in accordance with UK adopted International Accounting Standard 34,
'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the
United Kingdom's Financial Conduct Authority and that the interim management
report
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
● an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
● material related-party transactions in the first six months and
any material changes in the related-party transactions described in the last
annual report.
The directors of Wise plc are listed in the Annual Report and Accounts 2024,
with the exception of the following change: Emmanuel Thomassin was appointed
on 1 October 2024. A list of current directors is maintained at
https://wise.com/owners/corporate-governance
(https://wise.com/owners/corporate-governance)
On behalf of the Board of directors:
Kristo Käärmann, Director
Date: 6 November 2024
Independent review report to Wise plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Wise plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Unaudited interim
results of Wise plc for the six month period ended 30 September 2024 (the
"period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed consolidated statement of financial position as at 30
September 2024;
· the Condensed consolidated statement of comprehensive income for the
period then ended;
· the Condensed consolidated statement of changes in equity for the
period then ended;
· the Condensed consolidated statement of cash flows for the period
then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Unaudited interim results of
Wise plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Unaudited interim results
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Unaudited interim results, including the interim financial statements, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the Unaudited interim results in accordance with
the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority. In preparing the Unaudited interim
results, including the interim financial statements, the directors are
responsible for assessing the group'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 to cease operations, or have no realistic alternative
but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Unaudited interim results based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
6 November 2024
Condensed consolidated statement of comprehensive income
For the half-year ended 30 September 2024 (unaudited)
Half-year ended 30 September
2024 2023
Note £m £m
Revenue 3 591.9 498.2
Interest income on customer balances 4 300.7 211.1
Benefits paid relating to customer balances 5 (84.8) (53.3)
Cost of sales 6 (152.9) (160.7)
Net credit losses on financial assets 6 (4.5) (6.4)
Gross profit 650.4 488.9
Administrative expenses 7 (366.7) (296.5)
Net interest income from corporate investments 15.9 7.3
Other operating income 2.3 3.9
Operating profit 301.9 203.6
Finance expense (9.4) (9.3)
Profit before tax 292.5 194.3
Income tax expense 8 (75.2) (53.7)
Profit for the period 217.3 140.6
Other comprehensive income
Items that may be reclassified to profit or loss:
Fair value gain on investments, net 12.3 3.7
Currency translation differences (7.8) (1.4)
Total other comprehensive income 4.5 2.3
Total comprehensive income for the period 221.8 142.9
Earnings per share
Basic, in pence 9 21.12 14.13
Diluted, in pence 9 20.73 13.39
Alternative performance measures
Income¹ 807.8 656.0
Underlying income² 662.4 555.3
Underlying PBT³ 147.1 93.6
(1) Income is defined as revenue plus interest income on customer balances,
less interest expense on customer balances and benefits paid relating to
customer balances.
(2) Underlying Income is a measure of income retained from customers. It is
comprised of revenue from customers and the first 1% yield of interest income
on customer balances that Wise retains.
(3) Underlying PBT is a profitability measure calculated as profit before tax
using Underlying Income and excluding Benefits paid relating to customer
balances.
All results are derived from continuing operations.
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Condensed consolidated statement of financial position
As at 30 September 2024 (unaudited)
As at 30 September As at 31 March
2024 2024
Note £m £m
Non-current assets
Deferred tax assets 67.7 103.0
Property, plant and equipment 75.4 34.3
Intangible assets 5.6 6.5
Trade and other receivables 25.4 32.1
Total non-current assets 174.1 175.9
Current assets
Current tax assets 2.3 4.0
Trade and other receivables 411.4 442.8
Short-term financial investments 10 4,029.6 4,033.9
Derivative financial assets 2.6 1.6
Cash and cash equivalents 11 11,889.0 10,479.2
Total current assets 16,334.9 14,961.5
Total assets 16,509.0 15,137.4
Non-current liabilities
Trade and other payables 12 40.5 46.1
Provisions 3.9 2.3
Deferred tax liabilities 3.2 2.4
Borrowings 13 42.3 14.8
Total non-current liabilities 89.9 65.6
Current liabilities
Trade and other payables 12 15,218.4 13,872.7
Derivative financial liabilities 4.1 1.6
Provisions 5.3 2.2
Current tax liabilities 7.6 6.0
Borrowings 13 10.1 209.4
Total current liabilities 15,245.5 14,091.9
Total liabilities 15,335.4 14,157.5
Equity
Share capital 10.2 10.2
Equity merger reserve (8.0) (8.0)
Share-based payment reserve 281.8 306.5
Own shares reserve (69.1) (55.5)
Other reserves (0.1) (12.4)
Currency translation reserve (11.6) (3.8)
Retained earnings 970.4 742.9
Total equity 1,173.6 979.9
Total liabilities and equity 16,509.0 15,137.4
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Condensed consolidated statement of changes in equity
For the half-year ended 30 September 2024 (unaudited)
Note Share capital Equity merger reserve Share-based payment reserves Own shares reserve Other Reserves Currency translation reserve Retained earnings Total equity
£m £m £m £m £m £m £m £m
At 1 April 2023 10.2 (8.0) 247.4 (10.4) (23.3) 3.2 357.8 576.9
Profit for the period - - - - - - 140.6 140.6
Fair value gain on investments, net - - - - 3.7 - - 3.7
Currency translation differences - - - - - (1.4) - (1.4)
Total comprehensive income for the period - - - - 3.7 (1.4) 140.6 142.9
Shares acquired by ESOP Trust - - - (31.6) - - - (31.6)
Share-based compensation expense - - 35.2 - - - - 35.2
Tax on share-based compensation - - 16.8 - - - - 16.8
Employee share schemes - - (21.1) 5.5 - - 16.0 0.4
At 30 September 2023 10.2 (8.0) 278.3 (36.5) (19.6) 1.8 514.4 740.6
At 1 April 2024 10.2 (8.0) 306.5 (55.5) (12.4) (3.8) 742.9 979.9
Profit for the period - - - - - - 217.3 217.3
Fair value gain on investments, net 10 - - - - 12.3 - - 12.3
Currency translation differences - - - - - (7.8) - (7.8)
Total comprehensive income for the period - - - - 12.3 (7.8) 217.3 221.8
Shares acquired by ESOP Trust - - - (36.1) - - - (36.1)
Share-based compensation expense - - 31.2 - - - - 31.2
Tax on share-based compensation - - (23.5) - - - - (23.5)
Employee share schemes - - (32.4) 22.5 - - 10.2 0.3
At 30 September 2024 10.2 (8.0) 281.8 (69.1) (0.1) (11.6) 970.4 1,173.6
The accompanying notes form an integral part of these condensed consolidated
financial statements.
1. As at 30 September 2024, Called up share capital consists of 1,025,000,252
(31 March 2024: 1,024,777,252) class A ordinary shares of £0.01 each and
398,889,814 (31 March 2024: 398,889,814) class B Ordinary shares of
£0.000000001 each.
2. During the period ended 30 September 2024, the Company issued and allotted
223,000 class A Ordinary shares of £0.01 related to share options granted to
Non-Executive Directors of Wise under the Company's legacy incentive plans
prior to the Company's admission to trading.
3. Wise continued the programme, that commenced in 2023, to purchase Wise
shares in the market through the Employee Benefit Trust in order to reduce the
impact of dilution from employee share award plans. During the period ended 30
September 2024, a total of 4,622,518 shares were purchased from the market at
an average of £7.41 per share. The relevant directly attributable costs for
these purchases of £0.2m has been expensed to equity.
Condensed consolidated statement of cash flows
For the half-year ended 30 September 2024 (unaudited)
Half-year ended 30 September
2024 2023
Note £m £m
Cash generated from operations 14 1,830.0 1,630.8
Interest received 251.2 144.4
Interest paid (12.2) (5.8)
Corporate income tax paid (62.2) (24.6)
Net cash generated from operating activities 2,006.8 1,744.8
Cash flows from investing activities
Payments for property, plant and equipment (11.7) (3.0)
Payments for intangible assets (1.0) (1.5)
Payments for financial assets at FVOCI (3,006.8) (5,962.2)
Proceeds from sale and maturity of financial assets at FVOCI 2,986.2 5,540.7
Proceeds from sublease - 0.1
Net cash used in investing activities (33.3) (425.9)
Cash flows from financing activities
Funding relating to share purchases and employee share schemes (35.2) (29.4)
Proceeds from issues of shares and other equity 0.1 0.5
Proceeds from revolving credit facility 13 100.0 220.0
Repayments of revolving credit facility 13 (300.0) (180.0)
Principal elements of lease payments 13 (4.1) (4.5)
Interest paid on leases 13 (1.3) (0.4)
Net cash generated (used in)/from financing activities (240.5) 6.2
Net increase in cash and cash equivalents 1,733.0 1,325.1
Cash and cash equivalents at beginning of the period 11 10,479.2 7,679.4
Effects of exchange rate changes on cash and cash equivalents (323.2) 4.4
Cash and cash equivalents at end of the period 11 11,889.0 9,008.9
The accompanying notes form an integral part of these condensed consolidated
financial statements.
Notes to the interim condensed consolidated financial statements
For the half-year ended 30 September 2024 (unaudited)
Note 1. Summary of material accounting policies
1.1 General information
Wise plc (the 'Company') is a public limited company and is incorporated and
domiciled in England (Registration number 13211214). These condensed financial
statements for the six months ended 30 September 2024 comprise the Company and
its subsidiaries (the 'Group'). The principal activity of the Group is the
provision of cross-border and domestic financial services. The address of its
registered office is 6th Floor Tea Building, 56 Shoreditch High Street, London
E1 6JJ.
These condensed consolidated interim financial statements do not comprise
statutory accounts within the meaning of sections 434(3) and 435(3) of the
Companies Act 2006. Statutory accounts for the year ended 31 March 2024 were
authorised for issue by the Board of Directors on 13 June 2024 and delivered
to the Registrar of Companies. The report of the auditors on those accounts
was unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under section 498 of the Companies Act 2006.
1.2 Basis of preparation and accounting policies
These condensed consolidated interim financial statements of the Group have
been prepared in accordance with the UK-adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim report does not include all of the notes of the type normally
included in an annual financial
report. Accordingly, the condensed consolidated interim financial statements
should be read in conjunction with the Annual Report and Accounts for the year
ended 31 March 2024, which has been prepared in accordance with UK-adopted
international accounting standards and the requirements of the Companies Act
2006, and any public announcements made by Wise plc during the interim
reporting period.
The accounting policies and presentation applied by the Group are consistent
with those in the previous financial year.
Going concern
The condensed consolidated financial statements are prepared on a going
concern basis as the Directors are satisfied that the Group has the available
resources to continue in business for a period of at least 12 months from
approval of the interim financial statements. In making this assessment, the
Directors have considered severe downside scenarios to stress test the
viability of the business.
These downside scenarios covered reduction in revenues, profitability, cash
position and liquidity as well as the Group's ability to meet its regulatory
capital and liquidity requirements.
The assessment indicated that the Group has sufficient liquidity to continue
its operations and meet its financial obligations as they fall due for a
period of at least 12 months from approval of the interim financial statements
and remained above its minimum regulatory capital and liquidity requirements.
1.3 Critical accounting areas of judgement and estimation
In preparing these interim financial statements, management has made
judgements and estimates that affect the application of accounting policies
and the reported figures. Management assessed that there were no material
changes in the current period to the critical accounting estimates and
judgements, as disclosed in the 2024 Annual Report and Accounts.
Note 2. Segment information
Description of segment
The Group is managed on the basis of a single segment. The information
regularly reported to the Chief Operating Decision Maker ('CODM'), which is
currently the Board of Directors of the Group, for the purposes of resource
allocation and the assessment of performance, is based wholly on the overall
activities of the Group. Based on the Group's business model, the Group has
determined that it has only one reportable segment under IFRS 8, which is
provision of cross-border and domestic financial services.
The Group's revenue, assets and liabilities for the reportable segment can be
determined by reference to the statement of comprehensive income and the
statement of financial position. The analysis of revenue by type of customer
and geographical region is set out in note 3.
At the end of each reporting period, the majority of the non-current assets
were carried by Wise's operations in the UK. Based on the location of the
non-current asset, the following geographical breakdown of non-current assets
is prepared:
As at 30 September As at 31 March
2024 2024
£m £m
Non-current assets by geographical region*
United Kingdom 70.3 40.5
Rest of Europe 18.4 13.9
Rest of the world 15.0 15.6
Total non-current assets 103.7 70.0
* Non-current assets exclude deferred tax assets and financial instruments.
Note 3. Revenue
Half-year ended 30 September
2024 2023
£m £m
Revenue by customer type
Personal 464.4 387.2
Business 127.5 111.0
Total revenue 591.9 498.2
The revenue split by customer type, personal or business, represents the
underlying users of Wise products. Wise Account and standalone money transfers
are attributed to personal, Wise Business to business, and Wise Platform is
attributed to either, based on the ultimate customers of the partner that Wise
is contracted with.
Disaggregation of revenues
The geographical market in the table below depends on the type of the service
provided and is based either on customer address or the source currency.
Half-year ended 30 September
2024 2023
£m £m
Revenue by geographical region
Europe (excluding UK) 178.7 152.1
Asia-Pacific 127.5 102.1
North America 119.6 103.3
United Kingdom 109.6 96.2
Rest of the world 56.5 44.5
Total revenue 591.9 498.2
No individual customer contributed more than 10% to the total revenue in this
or the prior period.
Note 4. Interest income on customer balances
Half-year ended 30 September
2024 2023
£m £m
Interest income
Interest income from cash at banks 111.4 66.7
Interest income from investments in money market funds (MMFs) 102.9 67.7
Interest income from investments in listed bonds 86.4 76.7
Total interest income 300.7 211.1
Note 5. Benefits paid relating to customer balances
Half-year ended 30 September
2024 2023
£m £m
Benefits paid relating to customer balances
Cashback (EU) 66.0 47.7
Interest (US) 18.8 5.6
Total benefits paid relating to customer balances 84.8 53.3
Note 6. Cost of sales and net credit losses on financial assets
Breakdown of expenses by nature:
Half-year ended 30 September
2024 2023
£m £m
Cost of sales
Banking and customer related fees 130.1 125.7
Net foreign exchange movements and other product costs 22.8 35.0
Total cost of sales 152.9 160.7
Net credit losses on financial assets
Amounts charged to credit losses on financial assets 4.5 6.4
Net credit losses 4.5 6.4
Expected credit losses are presented as net credit losses within gross profit
and subsequent recoveries of amounts previously written off are credited
against the same line item.
Subsequent recoveries of amounts previously written off are immaterial in both
current and prior reporting period.
Note 7. Administrative expenses
Half-year ended 30 September
2024 2023
£m £m
Administrative expenses
Employee benefit expenses 200.2 184.7
Consultancy and outsourced services 63.2 39.5
Other administrative expenses 39.9 20.9
Technology 31.5 23.9
Marketing 23.2 19.3
Depreciation and amortisation 8.7 9.7
Less: Capitalisation of staff costs - (1.5)
Total administrative expenses 366.7 296.5
Note 8. Tax
Half-year ended 30 September
2024 2023
£m £m
Current income tax for the period 72.5 35.4
Deferred tax charge for the period 2.7 18.3
Total tax expense for the period 75.2 53.7
Income tax expense for the current half-year period is calculated representing
the best estimate of the annual effective tax rate expected for the full year
by geographical unit applied to the pre-tax income of the six month period,
which is then adjusted for tax on exceptional items.
The effective tax rate for the half-year ended 30 September 2024 is 26%
(half-year ended 30 September 2023: 28%). The rate remains marginally above
the UK rate due to non-deductible employee option plans and differences in
overseas tax rates.
The Organisation for Economic Co-operation and Development (OECD)/G20
Inclusive Framework on Base Erosion and Profit Shifting published on 20
December 2021 introduced the Pillar Two model rules designed to address the
tax challenges arising from the digitalisation of the global economy. The
Pillar Two regulation provides for an international framework of rules aimed
at ensuring that worldwide profits of multinational groups are subject to tax
at a rate not lower than 15% in every jurisdiction in which a group operates.
The Group operates in the United Kingdom (amongst other locations), which has
enacted new legislation to implement the global minimum top-up taxes. The
first period for which enacted legislation is effective for the Group is the
year ended 31 March 2025.
The Group has performed an assessment of the Group's exposure to Pillar Two
income taxes. This calculation is based on the accounting data for the first
half of fiscal year 2025. Based on the calculation, the Group does not expect
any material top-up taxes under enacted or substantively enacted Pillar Two
legislation. The Group will continue to monitor and assess the application of
these rules to The Group.
Note 9. Earnings per share
Half-year ended 30 September
2024 2023
Profit for the period (£m) 217.3 140.6
Weighted average number of Ordinary Shares for basic EPS (in millions of 1,029.1 995.1
shares)
Plus the effect of dilution from share options (in millions of shares) 18.9 54.9
Weighted average number of Ordinary Shares adjusted for the effect of dilution 1,048.0 1,050.0
(in millions of shares)
Basic EPS, in pence 21.12 14.13
Diluted EPS, in pence 20.73 13.39
Basic EPS has been calculated by dividing the profit attributable to the
Group's owners by the weighted average number of ordinary shares outstanding
during the period, including, for the period to 30 September 2024, the
ordinary shares issuable for no consideration for which all conditions are
satisfied (24.3m shares as at 30 September 2024).
Shares held by the Employee Share Ownership Plan (ESOP) Trust are deducted
from both basic and diluted EPS calculations. At the end of the reporting
period, there were 19.7m (30 September 2023: 28.9m) shares held in the ESOP
Trust.
The diluted EPS calculation adjusts the weighted average number of shares used
in the basic EPS calculation by assuming all potentially dilutive shares
convert into ordinary shares. Rights granted to employees under employee share
award plans, with a strike price and/or with conditions which have not yet
been met, are considered to be potential dilutive shares and therefore have
been included in the calculation of diluted EPS.
Note 10. Financial assets at fair value through other comprehensive income
Short-term financial investments are recognised as debt investments at FVOCI
and comprise the following investments in listed bonds:
As at 30 September As at 31 March
2024 2024
£m £m
Short-term financial investments- level 1
Listed bonds 4,029.6 4,033.9
Total short-term financial investments 4,029.6 4,033.9
During the period, the following movements were recognised in other
comprehensive income in relation to listed bonds:
Half-year ended 30 September
2024 2023
£m £m
Debt investments at FVOCI
Fair value gain recognised in other comprehensive income 15.0 4.9
Tax on listed bonds (2.7) (1.2)
Net fair value gain recognised in other comprehensive income 12.3 3.7
Note 11. Cash and cash equivalents
As at 30 September As at 31 March
2024 2024
£m £m
Cash and cash equivalents
Cash at banks, in hand and in transit between Group bank accounts 6,445.3 6,570.3
Cash in transit to customers 126.3 132.8
Investment into money market funds 5,317.4 3,776.1
Total cash and cash equivalents 11,889.0 10,479.2
Cash at banks, in hand and in transit between Group bank accounts include term
deposits of £352.4m (2024: £285.8). Their settlement date is three months or
less.
Of the £11,899.0m (31 March 2024: £10,479.2m) cash and cash equivalents at
the period end, £1,061.2m (31 March 2024: £1,061.1m) is considered the
corporate cash balance, which is not related to customer funds that are held
in Wise accounts or collected from customers as part of the money transfer
settlement process. Refer to the APM section for further details.
The Group is subject to various regulatory safeguarding compliance
requirements with respect to customer funds. Such requirements may vary across
the different jurisdictions in which the Group operates. As at 30 September
2024, the Group held £5,151.6m (2024: £5,290.5m) of customer funds as cash
in segregated, safeguarding bank accounts at investment grade banking
institutions and term deposits. The remainder of safeguarded customer deposits
were held across highly liquid global money market funds (MMFs), treasury
bonds and investment grade corporate paper, as allowed by local regulations.
In addition during the period to 30 September 2024, the Group has introduced a
hybrid approach to safeguarding customer funds by implementing Safeguarding
via Comparable Guarantees with nine investment-grade sureties. The total value
of the guarantees are £520.0m.
Note 12. Trade and other payables
As at 30 September As at 31 March
2024 2024
£m £m
Non-current trade and other payables
Accounts payable and accrued expenses 9.0 7.4
Other payables 31.5 38.7
Total non-current trade and other payables 40.5 46.1
Current trade and other payables
Wise Accounts 14,688.2 13,261.0
Outstanding money transmission liabilities* 200.7 235.9
Payables to payment processors 137.0 216.8
Accrued expenses 87.2 76.3
Other payables 59.3 39.2
Other taxes 23.4 22.7
Deferred revenue 13.1 12.9
Accounts payable 9.5 7.9
Total current trade and other payables 15,218.4 13,872.7
* Money transmission liabilities represent transfers that have not yet been
paid out or delivered to a recipient
Trade and other payables are unsecured unless otherwise indicated; due to the
short-term nature of current payables, their carrying values approximate their
fair value.
Note 13. Borrowings
As at 30 September As at 31 March
2024 2024
£m £m
Current
Revolving credit facility - 202.7
Lease liabilities 10.1 6.7
Total current borrowings 10.1 209.4
Non-current
Lease liabilities 42.3 14.8
Total non-current borrowings 42.3 14.8
Total borrowings 52.4 224.2
Debt movement reconciliation:
Revolving credit facility Lease liabilities Total
£m £m £m
As at 1 April 2024 202.7 21.5 224.2
Cash flows:
Proceeds 100.0 - 100.0
Repayments (300.0) (4.1) (304.1)
Interest expense paid (12.0) (1.3) (13.3)
Non-cash flows:
New leases - 35.9 35.9
Interest expense 8.2 1.3 9.5
Foreign currency translation differences - (0.5) (0.5)
Other 1.1 (0.4) 0.7
As at 30 September 2024 - 52.4 52.4
The Group retains its access to a £400.0m multi-currency debt facility
offered by a syndicate of eight lenders, namely: HSBC Innovation Banking
Limited, National Westminster Bank Plc, Citibank N.A., London Branch, JP
Morgan Chase Bank N.A., London Branch, Goldman Sachs Lending Partners LLC,
Barclays Bank Plc, Morgan Stanley Senior Funding Inc., and The Governor and
Company of the Bank of Ireland ('the RCF'). The currency denomination,
maturity date, interest rate, covenant and security terms of the RCF remain
consistent with that disclosed in the Annual Report and Accounts 2024. The
Group has complied with the financial covenants throughout the reporting
period. During the period to 30 September 2024, the Group fully repaid the
outstanding balance of this facility and the undrawn amount of the facility as
at 30 September 2024 is £400.0m (31 March 2024: £200.0m).
During the period to 30 September 2024, the Group recognised £34.4m of lease
liability, and the corresponding right of use of assets, for a new office
facility that was previously disclosed as a capital commitment in the notes to
the 2024 Annual Report and Accounts.
Note 14. Cash generated from operating activities
Half-year ended 30 September
2024 2023
Note £m £m
Cash generated from operations
Profit for the period 217.3 140.6
Adjustments for:
Depreciation and amortisation 7 8.7 9.7
Non-cash share-based payments expense 31.0 35.1
Foreign currency exchange differences 25.7 2.5
Income tax expense 8 75.2 53.7
Interest income and expenses (307.2) (209.3)
Effect of other non-monetary transactions (0.6) 0.3
Changes in operating assets and liabilities:
Increase in prepayments and receivables (30.3) (41.7)
Increase in trade and other payables 15.9 24.2
Decrease/(increase) in receivables from customers and payment processors 56.6 (80.2)
(Decrease)/increase in liabilities to customers, payment processors and (86.7) 145.8
deferred revenue
Increase in Wise accounts 1,824.4 1,550.1
Cash generated from operations 1,830.0 1,630.8
Note 15. Transaction with related parties
There have been no material changes to the nature or size of related party
transactions since 31 March 2024.
Note 16. Commitments and contingencies
Apart from the recognition of the lease liability and the right of use of
assets for a new office facility, as disclosed in note 13, there are no
further material movements in the commitments as at 30 September 2024.
The Group does not have any significant contingencies as at 30 September 2024
and 31 March 2024.
Note 17. Events occurring after the reporting period
No material post balance events have occurred since 30 September 2024.
Alternative performance measures
The alternative performance measures ('APMs') used by the Group remain
consistent with those
disclosed in the Annual Report and Accounts 2024, unless otherwise noted, and
should be viewed as
supplemental to, but not as a substitute for, measures presented in the
financial statements which
are prepared in accordance with IFRS.
Underlying profit before tax
Half-year ended 30 September
2024 2023
£m £m
Revenue 591.9 498.2
Underlying interest income (first 1% yield) 70.5 57.1
Underlying income 662.4 555.3
Cost of sales (152.9) (160.7)
Net credit losses on financial assets (4.5) (6.4)
Underlying gross profit 505.0 388.2
Administrative expenses (366.7) (296.5)
Net interest income from corporate investments 15.9 7.3
Other operating income, net 2.3 3.9
Underlying operating profit 156.5 102.9
Finance expense (9.4) (9.3)
Underlying profit before tax 147.1 93.6
Interest income above the first 1% yield 230.2 154.0
Benefits paid relating to customer balances (84.8) (53.3)
Reported profit before tax 292.5 194.3
Income tax credit/(expense) (75.2) (53.7)
Profit for the period 217.3 140.6
Free cash flow
Half-year ended 30 September
2024 2023
£m £m
Underlying profit before tax 147.1 93.6
Underlying income 662.4 555.3
Underlying profit before tax margin 22.2% 16.8%
Corporate cash working capital change excluding collaterals (27.3) (1.2)
Adjustment for exceptional and pass-through items in the working capital (0.1) (1.8)
Depreciation and amortisation 8.7 9.7
Payments for lease liabilities (4.1) (4.5)
Capitalised expenditure - Property, plant and equipment (11.7) (3.0)
Capitalised expenditure - Intangible assets (1.0) (1.5)
Underlying free cash flow (UFCF) 111.6 91.3
UFCF conversion (UFCF as a % of Underlying profit before tax) 76.0% 97.5%
Adjustments to Profit before tax
Interest income above the first 1% yield 230.2 154.0
Benefits paid relating to customer balances (84.8) (53.3)
Profit before tax 292.5 194.3
Free cash flow (FCF) 257.0 192.0
FCF conversion (FCF as a % of reported profit before tax) 87.9% 98.7%
Income
Half-year ended 30 September
2024 2023
£m £m
Revenue 591.9 498.2
Interest income on customer balances 300.7 211.1
Benefits paid relating to customer balances (84.8) (53.3)
Income 807.8 656.0
Corporate cash
The tables below show a non-IFRS view of the 'Corporate cash' metric that is
used by Group management to monitor available liquidity. Corporate cash
represents cash and cash equivalents that are not considered customer related
balances.
Information presented in the table below is based on the Group's internal
reporting principles and might differ from the similar information provided in
IFRS disclosures:
Half-year ended 30 September
2024 2023
£m £m
Corporate cash at beginning of period 1,061.1 671.1
Free cash flow 257.0 192.0
Net (repayments)/proceeds from the RCF (200.0) 40.0
Funding relating to share purchases and employee share schemes (35.2) (29.4)
Other (21.7) 37.4
Corporate cash at end of period 1,061.2 911.1
As at 30 September As at 31 March
2024 2024
£m £m
Breakdown of corporate and customer cash
Cash and cash equivalents and short-term financial investments 15,918.5 14,513.2
Receivables from customers and payment processors 212.8 287.7
Adjustments for:
Outstanding money transmission liabilities and other customer payables (382.8) (479.4)
Wise customer accounts (14,687.3) (13,260.4)
Corporate cash at end of period 1,061.2 1,061.1
Adjusted and Underlying Adjusted EBITDA
Half-year ended 30 September
2024 2023
£m £m
Profit for the period 217.3 140.6
Adjusted for:
Income tax expense 75.2 53.7
Finance expense 9.4 9.3
Net interest income from operating assets (15.9) (7.3)
Depreciation and amortisation 8.7 9.7
Share-based payment compensation expense 31.0 35.1
Adjusted EBITDA 325.7 241.1
Income 807.8 656.0
Adjusted EBITDA margin 40.3% 36.7%
Interest income net of customer benefits (215.9) (157.8)
Underlying interest income 70.5 57.1
Underlying adjusted EBITDA 180.3 140.4
Underlying income 662.4 555.3
Underlying adjusted EBITDA margin 27.2% 18.2%
(( 1 (#_ftnref1) )) Customer holdings is the total of the amount of customer
balances in the Wise account as well as the amounts invested in the 'Assets'
feature.
(( 2 (#_ftnref2) )) All data is for the six months ended 30 September 2024,
and comparisons provided are H1 FY25 vs H1 FY24, unless otherwise stated.
(( 3 (#_ftnref3) )) Underlying income and underlying profit before tax are
alternative performance measures (APM) which are non-IFRS measures. See page
34 for more information and reconciliation to IFRS.
(( 4 (#_ftnref4) )) Funds held in the Assets feature are off balance sheet
for accounting purposes.
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