TIDMTRU TIDMTRU
RNS Number : 0830O
TruFin PLC
29 September 2023
29 September 2023
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries
"TruFin Group" or the "Group")
Interim Financial Report for the six months ended 30 June 2023
(Unaudited)
-- Combined gross revenue for the Group increased 35% to GBP8.5m (H1 2022: GBP6.3m)
-- Gross revenue at Oxygen Finance Group Limited (together with
its subsidiaries) ("Oxygen") increased by 8% to GBP2.7m (H1 2022:
GBP2.5m), driven by growth in its core UK Early Payments market.
EBITDA was flat at GBP0.3m as Oxygen executed a targeted investment
program focused on maximising the revenue potential embedded in its
client base
-- Gross revenue at Satago Financial Solutions Limited
("Satago") increased 180% to GBP1.7m (H1 2022: GBP0.6m) with strong
growth in subscription services and invoice financing
facilities
-- Playstack Ltd ("Playstack") recorded 7% revenue growth to
GBP2.5m (H1 2022: GBP2.3m), with the highly anticipated launch of
The Last Faith on track for a Q4 release
-- Gross revenue at Vertus Capital Limited ("Vertus") increased
67% to GBP1.5m (H1 2022: GBP0.9m), driven by new facilities,
interest rate rises and early settlements
-- TruFin Group's EBITDA loss improved 12% to GBP3.8m (H1 2022: GBP4.3m)
-- TruFin Group's loss before tax was GBP6.2m (H1 2022: GBP4.8m)
as a result of a one-off net impairment loss of GBP1.3m on goodwill
(due to the anticipated sale of TruFin's stake in Vertus) plus a
depreciation and amortisation charge of GBP1.2m (H1 2022:
GBP0.5m)
6 months to 6 months to 12 months to
30 June 30 June 31 December
2023 2022 2022*
Financials and KPI's (Unaudited) GBP'000 GBP'000 GBP'000
Gross Revenue 8,497 6,281 16,119
EBITDA (3,786) (4,320) (6,425)
Loss before tax (6,220) (4,795) (8,020)
Net Assets 34,228 42,419 40,104
*Audited figures
Key milestones during the period:
-- Approximately 30% of Oxygen's EP clients purchased two or
more products during the period (H1 2022: c15%)
-- Migration of existing Lloyds Banking Group's factoring
clients onto the platform has started with the remainder of the
factoring book expected to be materially progressed during 2024
-- Following the success of its Mortal Shell game, which has
sold more than one million units, Playstack signed an agreement to
develop and licence Mortal Shell 2 and Mortal Shell 3
-- Successful Placing and Open Offer raising GBP7.6m before
expenses, enabling Playstack to secure the Mortal Shell franchise
and provide the Group with additional working capital
Key milestones post period end:
-- Satago has today signed a Letter of Intent with a UK
challenger bank - covering the adoption of Satago's LaaS solution.
This will enable the Challenger Bank to offer invoice financing to
its customers and to simplify and automate internal processes
-- To build on Satago's platform launch with Lloyds Banking Group and execute on the significant opportunities ahead, Satago has today agreed a GBP4m Convertible Loan Note ("CLN") with existing shareholders
-- Playstack signed a new, multi-year partnership with a major
technology platform for more than $2m to develop a series of sequel
games based on existing published IP. In addition, Playstack's
proprietary discovery technology has sourced four new titles for
release throughout 2024
-- TruFin received and conditionally accepted a non-binding cash
offer for its shares in Vertus. Due diligence and contract
negotiations are ongoing and, if successful, the deal is expected
to complete before year end. If completed, TruFin expects to
receive cash proceeds of approximately GBP3.2m
James van den Bergh, Chief Executive Officer commented:
"We have made positive progress during 2023, with growth across
the Group. It was pleasing to successfully conclude TruFin's
fundraise in June 2023, and I would like to personally thank
shareholders for their ongoing support. The fundraise has enabled
targeted additional investment in Playstack, Oxygen and Satago
which the Board believes will maximise the equity value of these
businesses for shareholders.
The proceeds allowed Playstack to enter into an agreement to
develop and licence further games in the Mortal Shell franchise -
an exceptional series that the whole team is excited to work on.
Playstack's signing of a further multi-million-dollar, multi-year
partnership to develop a series of sequel games based on existing
published IP is further testament to the momentum within the
business.
The fundraise has also allowed us to participate in Satago's
CLN. Already delivering on its next generation lending platform for
Lloyds Banking Group, today's announcement of the signing of a
Letter of Intent with a UK Challenger Bank marks a big moment in
Satago's development. Having shifted focus from a lending business
to a software business, Satago will soon be a tech player with
multiple enterprise customers, forward-thinking and united in a
desire to offer SMEs a fully digitised end-to-end proposition. In
so doing they are helping SMEs unlock their potential in the face
of economic uncertainty.
As we look to reveal the full value embedded within Oxygen, we
have made various tactical investments to make the company as
attractive as possible to the largest number of potential
acquirers. The value Oxygen adds to its customer base cannot be
underestimated, and its cross-selling opportunities remain
significant.
TruFin is very well positioned, and the Board looks to the
future with excitement."
For further information, please contact:
TruFin plc
James van den Bergh, Chief Executive Officer 0203 743 1340
Kam Bansil, Investor Relations 07779 229508
Liberum Capital Limited (Nominated Adviser and
Corporate broker)
Chris Clarke
Edward Thomas 0203 100 2000
TruFin plc is the holding company of an operating group
comprising four growth-focused technology businesses operating in
niche markets: early payment provision, invoice finance, IFA
finance and mobile games publishing. The Company was admitted to
AIM in February 2018 and trades under the ticker symbol: TRU. More
information is available on the Company website: www.TruFin.com
Chief Executive's Statement
Oxygen
Oxygen's position as a financial technology company delivering
social value strengthened significantly during H1 2023.
Gross revenue at Oxygen increased by 8% to GBP2.7m (H1 2022:
GBP2.5m). Oxygen's core Early Payments ("EP") revenue grew 20% to
GBP1.8m (H1 2022: GBP1.5m) whilst other revenue predominantly
comprising of Software as a Service ("SaaS") and partnership
revenues was flat at GBP0.9m.
Momentum within Oxygen's EP market continues to build, with
combined supplier spend totalling GBP24bn at the end of June 2023,
up 9.4% from 30 June 2022.
An unprecedented number of clients' suppliers participated in EP
programmes in H1 2023, with on-boarded annual supplier spend
exceeding GBP1.2bn across 4,600 suppliers, growth of 20% over H1
2022. A record amount of new supplier spend, GBP201m, was also
added during H1 2023, an increase of 22% over H1 2022.
Transacted spend attracting an early payment discount reached
GBP468m in H1 2023, up 12% versus H1 2022. Total rebates generated
were GBP5.1m in H1 2023, up 20% on H1 2022.
Oxygen's entrenchment into client procurement activity is
illustrated by the continuing growth of its "Freepay" initiative.
This sees Oxygen help clients deliver social value to their local
communities by enabling them to pay local micro and small suppliers
early, at no cost. By the end of June 2023 more than 11,000
suppliers were participating in this programme (up from 6,000 as at
end June 2022). These local micro and small suppliers enjoyed early
invoice payments totalling GBP275m, without charge, during the
first six months of the year.
SaaS H1 revenues were flat at GBP0.7m, despite some irrational
competitor pricing potentially prompted by financial strain.
Oxygen's management believes this may lead to consolidation in the
marketplace. Oxygen remains the market leader, unrivalled in its
knowledge of local authority procurement and trusted partner
status. Approximately 30% of Oxygen's Early Payments clients
purchased two or more products during the period (H1 2022: circa
15%).
Partnership revenues which relate to third party products sold
into Oxygen's client base grew strongly to GBP134,000 (H1 2022:
GBP7,000). This highlights the strength of Oxygen's client
relationships and distribution capabilities and has significant
growth potential.
To fully exploit its dominant market position and client
pipeline, Oxygen invested in its technology and people and
continued to opt for higher revenue gain share over up-front fees,
benefitting outer-year revenue. These targeted initiatives have
supressed the 2023 year-on-year revenue growth rate, and added
GBP0.2m of cost, temporarily supressing EBITDA growth. However,
they are anticipated to benefit both revenue and profit in 2024 and
beyond.
Satago
Satago offers its customers technically advanced invoice finance
and cashflow management systems via its online software
platform.
Satago is continuing its transition from predominantly
self-funding its balance sheet to a hybrid model incorporating
"partner balance sheet financing" which utilises Satago's
lending-as-a-service ("LaaS") solutions and embedded finance model.
This strategy remains anchored by the company's five-year
commercial agreement and partnership with Lloyds Banking Group, and
its strategic partnership with Sage to offer embedded finance in a
number of Sage products.
During the period, Satago migrated a small set of Lloyds Banking
Group's factoring clients onto the platform. Large scale migration
is now due to begin in 2024; with migration anticipated to be
materially progressed during 2024. Platform functionality for
onboarding new clients and supporting the Sage50 embedded finance
customers remains the primary focus in Q4 2023.
Satago more than doubled revenues in the first half of the year
to GBP1.7m (H1 2022: GBP0.6m), driven by LaaS income and increases
in interest and fee income (GBP605,000 versus GBP252,000 in H1
2022) as it builds on its existing partnerships while growing its
invoice financing capabilities.
Subscription numbers with one of Satago's existing strategic
technology partners continue to grow strongly, with active
subscriptions increasing 134% to 640 over the same period in 2022
(H1 2022: 273). Based on the success of this year's UK and Irish
roll out, Satago and its strategic partner have agreed, subject to
contract, to roll out the same offering in the US and Canada in H1
2024.
Satago has recently extended its GBP5m facility with a
specialist niche funder to GBP7m, in order to continue its
expansion plans. The facility is currently GBP5.7m drawn.
Playstack
Playstack is a gaming technology business providing publishing
and related services to the mobile game and console sector.
Playstack is the Group's entry point into the highly attractive
growth market of video game publishing.
Playstack continues to target positive EBITDA and operating cash
generation in 2023.
Playstack has continued to track to its three-year commercial
plan and expects to deliver significant growth from 2022 through to
2024 and beyond. During the period, the Group signed an agreement
to develop Mortal Shell 2 and 3 following the success of Mortal
Shell which has sold over one million copies. The securing of the
Mortal Shell franchise has generated real excitement across the
gaming landscape and provided Playstack a multi-year release
programme.
Additionally, through valuable platform and technology
partnerships, Playstack has been able to deliver valuable revenue
visibility ahead of games launches, de-risking development
spend.
Playstack continues to develop its own innovative technology
suite that sets it apart from market rivals.
Vertus
Vertus provides succession finance to Independent Financial
Advisers ("IFAs"). The business originates deals through its
collaboration with IntegraFin Holdings plc ("IntegraFin") and
various business brokers focused on the IFA market.
Given the increase in cost of debt and equity capital, the deal
market has softened during 2023. However significant consolidation
persists as Financial Planners continue to retire from the
industry, pressured by age and regulation (consumer duty being the
most recent regulatory driver).
Private Equity-backed consolidators proliferate and continue to
drive high valuations and significant deal activity with aggressive
integration strategies. In contrast, Vertus funds a succession
process that ensures planning firms can remain independent and meet
client demand for quality and bespoke advice.
The loan book continues to perform well, with the value of the
underlying security increasing as Vertus' borrowers retain and grow
their client bases. The combination of higher interest rates and
suppressed equity and bond markets has put downward pressure on ad
valorem recurring revenue for firms, which has introduced early
signs of stress on the profitability of firms. Furthermore,
competition with yields on cash and the impact of inflation on
household budgets has reduced new inflows. Despite this, borrowers
are managing the environment well and Vertus remains without credit
losses since inception.
The increasing interest rate environment has precipitated some
early settlements for Vertus, which has helped early settlement
charge profitability, whilst hampering growth in the loan book.
Despite the increase in these settlements, Vertus is aiming to end
2023 with a loan book of GBP24m (31 December 2022: GBP21.9m).
Vertus is developing further capital products to enable
independent succession in the UK IFA market and has good prospects
for the future.
Post period end developments and outlook
Oxygen
Oxygen's core EP revenue maintained strong organic growth, with
EP revenues to the end of August up by 22% year-on-year.
Seven of the eight EP client contracts due to expire in FY23
have already been re-signed or had renewal confirmed, for
multi-year periods.
Additionally, three new EP client contracts were signed by the
end of August 2023, with an exceptionally strong pipeline expected
to deliver a record number of new clients in 2023. The Board is
confident of continued and significant financial progress in 2024
and beyond.
Partnerships continue to develop. Oxygen anticipates these will
contribute more than GBP0.25m to full year revenues, from reselling
services and referral fees. Seventeen EP clients now purchase one
or more additional service from Oxygen.
The turmoil of the Covid pandemic has now passed with record
numbers of attendees at the various local government conferences
that Oxygen attends and hosts annually, enabling Oxygen to build
its client prospect pipeline.
The normalisation of remote working post-Covid continues to
benefit Oxygen, with ongoing efficiencies achieved particularly
with new client implementation. Moreover, councils in England alone
are expected to increase procurement expenditure to GBP74bn in
2023, up 4% over 2022. These favourable tailwinds, coupled with
rising interest rates and inflation, make Oxygen's supply side
offer even more compelling.
Satago
Full client migration of Lloyds Banking Group's factoring
clients is set to be materially progressed during 2024.
In addition, platform functionality for onboarding clients and
supporting the Bank's embedded finance customers within Sage50 is
anticipated to be delivered in November 2023.
Building on this success, today Satago is pleased to announce
that it has signed a Letter of Intent with a UK Challenger Bank
("Challenger Bank"), covering the adoption of Satago's LaaS
solution. This will enable the Challenger Bank to offer invoice
financing to its customers and to simplify and automate internal
processes.
This Letter of Intent demonstrates the ongoing demand for the
compelling product which Satago has built and further solidifies
Satago's place as a Critical Integration Platform for incumbent
Banks globally. Conversations are ongoing with multiple strategic
partners in other territories.
To build on Satago's successful Platform launch with Lloyds
Banking Group and execute on the significant opportunities ahead,
Satago has today agreed GBP4m CLN from existing shareholders.
TruFin is investing GBP3m via the CLN which will earn interest of
15% per annum and convert to common equity at a material discount
to the price of a future equity fund raise completed by Satago.
Playstack
Playstack's two new PC and console releases - AK-Xolotl and The
Last Faith - combined with the securing of further platform deals
are key to delivery of revenues for the current year.
AK-Xolotl launched on 14 September to strong critical acclaim,
performing in-line with expectations. AK-Xolotl has been released
across PC, Xbox 1, Xbox Series S/X, PlayStation 4, PlayStation 5
and Nintendo Switch. This was Playstack's first simultaneous
release across six platforms and is testament to the business's
strong operational capability.
The Last Faith is slated for release in November 2023 and is
enjoying strong wish-list momentum following the release of a new
playable demo.
During September Playstack secured a new multi-million-dollar,
multi-year partnership with a major technology platform to develop
a series of sequel games based on existing published IP. This
contract underpins Playstack's ambition to sequel high quality
existing IP via a fully funded model.
Playstack's proprietary discovery technology has sourced several
high potential games, including four new titles for release
throughout 2024 with more in the pipeline.
Vertus
In August 2023 the TruFin board received and conditionally
accepted a non-binding cash offer for its shares in Vertus. Due
diligence and contract negotiations are ongoing and, if successful,
the deal is expected to complete before year end.
Vertus has originated new facilities of GBP4m and the pipeline
is experiencing increased volumes. The company's loan book is
forecast to grow to GBP24m (from GBP21.9m as at 31 December 2022).
Loan book growth has been largely offset by an increase in early
settlements as borrowers seek to pay down debt subject to higher
interest rates.
The subsidiaries within the TruFin Group have been resilient in
the first six months of 2023 and the board remains confident
regarding prospects for the remainder of 2023.
As at 31 August 2023, the following assets were not less
than:
-- GBP7.8m of cash or cash equivalents
-- GBP6.9m of assets within the Satago Group's loan book
The TruFin Group has no more than GBP2.4m in net near-term
liabilities.
UNAUDITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
6 months 6 months Year ended
ended ended 31 December
2022
Notes 30 June 2023 30 June (Audited)
2022
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
======================================= ======= ============== ============= ============
Interest income 3 2,093 1,003 2,619
Fee income 3 3,930 2,955 7,183
Publishing income 3 2,474 2,323 6,317
Gross revenue 3 8,497 6,281 16,119
-------------- ------------- ------------
Interest, fee and publishing expenses (2,564) (1,947) (5,075)
-------------- ------------- ------------
Net revenue 5,933 4,334 11,044
============== ============= ============
Staff costs 5 (6,737) (6,433) (12,609)
Other operating expenses (2,922) (2,215) (4,810)
Depreciation & amortisation (1,171) (479) (1,596)
Net impairment loss on financial
assets (69) (6) (50)
Impairment of goodwill 9 (1,250) - -
Share of (loss)/profit from associates (4) 4 1
-------------- ------------- ------------
Loss before tax (6,220) (4,795) (8,020)
============== ============= ============
Taxation 8 241 230 1,214
-------------- ------------- ------------
Loss for the period/year (5,979) (4,565) (6,806)
============== ============= ============
Other comprehensive income
Items that may be reclassified subsequently
to profit and loss
Exchange differences on translating
foreign operations 103 9 (65)
Other comprehensive income for
the period/year, net of tax 103 9 (65)
============== ============= ============
Total comprehensive loss for the
period/year (5,876) (4,556) (6,871)
============== ============= ============
Loss after tax attributable to:
Owners of TruFin plc (5,995) (3,716) (6,637)
Non-controlling interests 16 (849) (169)
-------------- ------------- ------------
(5,979) (4,565) (6,806)
============== ============= ============
Total comprehensive loss for the
period/year attributable to:
Owners of TruFin plc (5,894) (3,706) (6,704)
Non-controlling interests 18 (850) (167)
(5,876) (4,556) (6,871)
============== ============= ============
Earnings per share 6 months 6 months Year ended
ended ended 31 December
2022
Notes 30 June 2023 30 June (Audited)
2022
(Unaudited) (Unaudited) Pence
pence pence
====================== ======= ============== ============= ============
Basic and Diluted EPS 14 (6.4) (4.3) (7.3)
UNAUDITED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at As at 31
Notes 30 June 2023 December
2022
GBP'000 GBP'000
(Unaudited) (Audited)
================================= ======= ============== ===========
Assets
Non-current assets
Intangible assets 9 23,718 24,411
Property, plant and equipment 10 320 345
Deferred tax asset 8 165 250
Loans and advances 11 15,955 15,016
-------------- -----------
Total non-current assets 40,158 40,022
============== ===========
Current assets
Cash and cash equivalents 4,993 10,273
Loans and advances 11 10,615 9,145
Interest in associate - 4
Trade receivables 1,777 2,149
Other receivables 4,891 3,899
-------------- -----------
Total current assets 22,276 25,470
============== ===========
Total assets 62,434 65,492
============== ===========
Equity and liabilities
Equity
Issued share capital 12 85,706 85,706
Retained earnings (30,879) (24,884)
Foreign exchange reserve 38 (63)
Other reserves (26,531) (26,531)
-------------- -----------
Equity attributable to owners of
the company 28,334 34,228
-------------- -----------
Non-controlling interest 5,894 5,876
-------------- -----------
Total equity 34,228 40,104
============== ===========
Liabilities
Non-current liabilities
Borrowings 13 15,688 16,764
-------------- -----------
Total non-current liabilities 15,688 16,764
============== ===========
Current liabilities
Borrowings 13 5,449 1,783
Trade and other payables 7,069 6,841
Total current liabilities 12,518 8,624
-------------- ===========
Total liabilities 28,206 25,388
============== ===========
Total equity and liabilities 62,434 65,492
============== ===========
The financial statements were approved by the Board of Directors
on 28 September 2023 and were signed on its behalf by:
James van den Bergh
Chief Executive Officer
UNAUDITED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
Foreign Non-
Share Retained exchange Other controlling Total
capital earnings reserve reserves Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- --------- --------- --------- -------- ------------ --------
Balance at 1
January 2023 85,706 (24,884) (63) (26,531) 34,228 5,876 40,104
Loss for the period - (5,995) - - (5,995) 16 (5,979)
Other comprehensive
income for the
period - - 101 - 101 2 103
Total comprehensive
loss for the period - (5,995) 101 - (5,894) 18 (5,876)
-------- --------- --------- --------- -------- ------------ --------
Balance at 30
June 2023 (Unaudited) 85,706 (30,879) 38 (26,531) 28,334 5,894 34,228
======== ========= ========= ========= ======== ============ ========
Balance at 1
January 2022 73,548 (17,731) 4 (24,393) 31,428 1,023 32,451
Loss for the period - (3,716) - - (3,716) (849) (4,565)
Other comprehensive
income for the
period - - 10 - 10 (1) 9
------
Total comprehensive
loss for the period - (3,716) 10 - (3,706) (850) (4,556)
------ -------- -------- ------- ----- -------
Issuance of shares 12,158 (496) - (2,138) 9,524 - 9,524
Issuance of shares
to subsidiary - - - - - 5,000 5,000
Balance at 30
June 2022 (Unaudited) 85,706 (21,943) 14 (26,531) 37,246 5,173 42,419
====== ======== ======== ======= ===== =======
UNAUDITED CONDENSED INTERIM STATEMENT OF CASH FLOWS
6 months 6 months Year ended
ended ended 31 December
2022
Notes 30 June 30 June (Audited)
2023 2022
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
========================================== ======= ============= ============= ============
Cash flows from operating activities
Loss before tax (6,220) (4,795) (8,020)
Adjustments for
Depreciation of property, plant
and equipment 55 55 108
Amortisation of intangible fixed
assets 1,637 822 2,377
Impairment of intangible assets 1,250 - -
Finance costs 820 384 974
Share of loss/(profit) from associates 4 (4) (1)
(2,454) (3,538) (4,562)
Working capital adjustments
Movements in loans and advances (2,408) (5,744) (8,029)
(Increase)/decrease in trade and
other receivables (415) 566 (34)
Increase/(decrease) in trade and
other payables 511 (1,511) 60
Net payables on acquisition of subsidiary - (76) (67)
(2,312) (6,765) (8,070)
Tax credit received/(paid) 88 (4) 668
Interest and finance costs paid (686) (308) (777)
------------- ------------- ------------
Net cash used in operating activities (5,364) (10,615) (12,741)
============= ============= ============
Cash flows from investing activities:
Additions to intangible assets (2,204) (1,054) (3,159)
Additions to property, plant and
equipment (28) (72) (113)
Acquisition of subsidiaries (157) (1,234) (1,217)
Cash on acquisition of subsidiary - 19 19
Net cash used in investing activities (2,389) (2,341) (4,470)
Cash flows from financing activities:
Issue of ordinary share capital - 9,524 9,524
Issue of ordinary share capital
of subsidiary - 5,000 5,000
Net borrowings 13 2,471 3,744 5,370
Lease payments (42) (27) (28)
Net cash generated from financing
activities 2,429 18,241 19,866
------------- ------------- ------------
Net (decrease)/increase in cash
and cash equivalents (5,324) 5,285 2,655
------------- ------------- ------------
Cash and cash equivalents at beginning
of the period/year 10,273 7,608 7,608
Effect of foreign exchange rate
changes 44 12 10
------------- ------------- ------------
Cash and cash equivalents at end
of the period/year 4,993 12,905 10,273
============= ============= ============
NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
1. Accounting policies
Basis of preparation
The annual financial statements of TruFin plc are prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS").
The condensed set of financial statements included in this
Interim Financial Report has been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'
('IAS 34'). This condensed set of Financial Statements has been
prepared by applying the accounting policies and presentation that
were applied in the preparation of the TruFin Group's published
Financial Statements for the year ended 31 December 2022.
The condensed set of financial statements included in this
Interim Financial Report for the six months ended 30 June 2023
should be read in conjunction with the annual audited financial
statements of TruFin plc for the year ended 31 December 2022, which
were delivered to the Jersey Financial Services Commission. The
audit report for these accounts was unqualified and did not draw
attention to any matters by way of emphasis.
Going concern
The Directors are satisfied that the TruFin Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of the report.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed financial statements.
Group information
The TruFin Group ("the Group") is the consolidation of;
-- TruFin plc,
-- TruFin Holdings Limited,
-- Oxygen Finance Group Limited, Oxygen Finance Limited and
Oxygen Finance Americas Inc., together the ("Oxygen Group"),
-- TruFin Software Limited,
-- Satago Financial Solutions Limited, Satago SPV 1 Limited,
Satago SPV 2 Limited, Satago Financial Solutions z.o.o, together
("Satago"),
-- AltLending (UK) Ltd,
-- Vertus Capital Limited and Vertus SPV 1 Limited, together ("Vertus"), and
-- Playstack Limited, Bandana Media Ltd, Playignite Ltd,
Playstack z.o.o, Playstack OY, Foxglove Studios AB, Magic Fuel
Games Inc, Playstack Inc and Playignite Inc, together the
("Playstack Group").
Additionally, the Playstack Group also includes two associate
companies incorporated in the UK which have been accounted for
using the equity method. These are;
-- A 49% interest in Snackbox Games Ltd, and
-- A 26% interest in Stormchaser Games Ltd.
On 13 March 2023, the Group disposed of its 49% interest in one
associate company, PlayFinder Games Ltd.
On 18 April 2023, Military Games International Limited, a
company in which the Group had a 42% interest was dissolved.
The principal activities of the Group are the provision of niche
lending, early payment services and mobile game publishing.
The financial statements are presented in Pounds Sterling, which
is the currency of the primary economic environment in which the
Group operates. Amounts are rounded to the nearest thousand.
Significant accounting policies and use of estimates and
judgements
The preparation of interim consolidated financial statements in
compliance with IAS 34 requires the use of certain critical
accounting judgements and key sources of estimation uncertainty. It
also requires the exercise of judgement in applying the TruFin
Group's accounting policies. There have been no material revisions
to the nature and the assumptions used in estimating amounts
reported in the annual audited financial statements of TruFin plc
for the year ended 31 December 2022.
The accounting policies, presentation and methods of computation
in the audited financial statements have been followed in the
condensed set of financial statements.
2. General information
TruFin plc is a public limited company incorporated in Jersey.
The shares of the Company are listed on the Alternative Investment
Market. The address of the registered office is 26 New Street, St
Helier, Jersey, JE2 3RA.
A copy of this Interim Financial Report including Condensed
Financial Statements for the period ended 30 June 2023 is available
at the Company's registered office and on the Company's investor
relations website (www.trufin.com).
3. Gross revenue
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
======================== ============== ============== ============
Interest income 2,093 1,003 2,619
-------------- -------------- ------------
Total interest income 2,093 1,003 2,619
-------------- -------------- ------------
EPPS* contracts 1,939 1,519 3,335
Consultancy fees 135 247 597
Implementation fees 1,015 412 1,644
Subscription fees 841 777 1,607
-------------- -------------- ------------
Total fee income 3,930 2,955 7,183
-------------- -------------- ------------
IAP revenue 80 207 342
Advertising revenue 78 299 453
Console revenue 2,316 1,816 5,521
Brand revenue - 1 1
-------------- -------------- ------------
Total publishing income 2,474 2,323 6,317
-------------- -------------- ------------
Gross revenue 8,497 6,281 16,119
============== ============== ============
*Early Payment Programme Services
4. Segmental reporting
The results of the Group are broken down into segments based on
the products and services from which it derives its revenue:
Short term finance:
Provision of invoice factoring and succession financing for the
IFA space. For results during the reporting period, this
corresponds to the results of Satago, Vertus and AltLending.
Payment services:
Provision of Early Payment Programme Services. For results
during the reporting period, this corresponds to the results of the
Oxygen Group.
Publishing:
Publishing of video games. For results during the reporting
period, this corresponds to the results of the Playstack Group.
Other:
Revenue and costs arising from investment activities. For
results during the reporting period, this corresponds to the
results of TruFin Software Limited, TruFin Holdings Limited and
TruFin plc.
The results of each segment, prepared using accounting policies
consistent with those of the Group as a whole, are as follows:
Short term Payment
finance services
6 months ended 30 June 2023 GBP'000 GBP'000 Publishing Other Total
(Unaudited) GBP'000 GBP'000 GBP'000
============================== =========== ========= ============ ========== ==========
Gross revenue 3,241 2,748 2,490 18 8,497
Cost of sales (908) (521) (1,135) - (2,564)
----------- --------- ------------ ---------- ----------
Net revenue 2,333 2,227 1,355 18 5,933
----------- --------- ------------ ---------- ----------
Loss before tax (3,256) (493) (1,378) (1,093) (6,220)
Taxation (85) 104 222 - 241
Loss for the period (3,341) (389) (1,156) (1,093) (5,979)
=========== ========= ============ ========== ==========
Total assets 33,279 7,892 20,781 482 62,434
Total liabilities (22,161) (1,816) (3,532) (697) (28,206)
----------- --------- ------------ ---------- ----------
Net assets 11,118 6,076 17,249 (215) 34,228
----------- --------- ------------ ---------- ----------
Short term Payment
finance services
6 months ended 30 June 2022 GBP'000 GBP'000 Publishing Other Total
(Unaudited) GBP'000 GBP'000 GBP'000
============================== =========== ========= ============ ========== ==========
Gross revenue 1,491 2,467 2,323 - 6,281
Cost of sales (441) (398) (1,108) - (1,947)
----------- --------- ------------ ---------- ----------
Net revenue 1,050 2,069 1,215 - 4,334
----------- --------- ------------ ---------- ----------
Loss before tax (2,298) (232) (1,085) (1,180) (4,795)
Taxation (1) - 231 - 230
Loss for the period (2,299) (232) (854) (1,180) (4,565)
=========== ========= ============ ========== ==========
Total assets 30,837 8,208 19,406 6,039 64,490
Total liabilities (16,907) (1,859) (2,572) (733) (22,071)
----------- --------- ------------ ---------- ----------
Net assets 13,930 6,349 16,834 5,306 42,419
----------- --------- ------------ ---------- ----------
*adjusted loss before tax excludes share-based payment
expense
Short term Payment
finance services
Year ended 31 December 2022 GBP'000 GBP'000 Publishing Other Total
(Audited) GBP'000 GBP'000 GBP'000
============================== =========== ========= ============ ========== ==========
Gross revenue 4,469 5,311 6,330 9 16,119
Cost of sales (1,153) (889) (3,033) - (5,075)
----------- --------- ------------ ---------- ----------
Net revenue 3,316 4,422 3,297 9 11,044
----------- --------- ------------ ---------- ----------
Loss before tax (3,879) (220) (1,569) (2,352) (8,020)
Taxation 218 395 601 - 1,214
Loss for the year (3,661) 175 (968) (2,352) (6,806)
=========== ========= ============ ========== ==========
Total assets 34,200 8,258 20,407 2,627 65,492
Total liabilities (19,747) (1,792) (2,911) (938) (25,388)
----------- --------- ------------ ---------- ----------
Net assets 14,453 6,466 17,496 1,689 40,104
----------- --------- ------------ ---------- ----------
*adjusted loss before tax excludes share-based payment
expense
5. Staff costs
Analysis of staff costs:
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
============================================== ============== ============== ============
Wages and salaries 5,392 5,269 10,365
Consulting costs 452 193 379
Social security costs 662 744 1,411
Pension costs arising on defined contribution
schemes 231 227 454
6,737 6,433 12,609
============== ============== ============
Consulting costs are recognised within staff costs where the
work performed would otherwise have been performed by employees.
Consulting costs arising from the performance of other services are
included within other operating expenses.
Average monthly number of persons (including Executive
Directors) employed:
6 months 6 months Year ended
ended ended 30 June 31 December
2022 2022
30 June 2023 (Unaudited) (Audited)
(Unaudited) Number Number
Number
================== ============== ============== ============
Management 16 18 17
Finance 8 11 10
Sales & marketing 43 34 30
Operations 57 50 78
Technology 60 54 43
-------------- -------------- ------------
184 167 178
============== ============== ============
Directors' emoluments
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
====================== ============== ============== ============
Combined remuneration 376 376 715
6. Employee share-based payment transactions
The employment share-based payment charge comprises:
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
====================================== ============== ============== ============
Performance Share Plan and Joint Share - - -
Ownership Plan Founder Award
Performance Share Plan Market Value - - -
Award
Performance Share Plan 2019 Award - - -
Performance Share Plan 2018 Award - - -
Total - - -
============== ============== ============
Performance Share Plan and Joint Share Ownership Plan Founder
Award ("PSP and JSOP")
The final 25% of Founder Awards held by James van den Bergh
vested on 22 February 2022 when the share price was GBP0.81. As a
result, 395,558 shares subject to the Joint Share Ownership Plan
became fully owned by the EBT and James' nil cost option under the
Performance Share Plan vested in respect of the same number of
shares.
Performance Share Plan Market Value Award ("PSP Market
Value")
On 21 February 2018, options to acquire 4,868,420 shares were
granted to the senior management team. The vesting of this award is
based on market--based performance conditions. The vesting of these
awards is subject to the holder remaining an employee of the
Company and the Company's share price achieving five distinct
milestones - vesting at 20% each milestone. The exercise price of
the awards at the time of grant was GBP1.90 per share. A Monte
Carlo simulation was used to determine the fair value of these
options. The model used an expected volatility of 10% and a risk
free rate of 1.3%.
In order to reflect the impact of the demerger, the PSP Market
Value Award was split into two:
-- Part of the award remained as an option in respect of TruFin
plc shares ("TruFin Market Value Award")
-- Part of the award became an award in respect of DFC shares ("DFC market Value Award")
The TruFin Market Value Award is on the same terms as the
original PSP Market Value Award except that:
-- The exercise price was adjusted to GBP0.85, and the share
price milestones were adjusted to reflect the demerger
-- The exercise price was further adjusted to GBP0.80, and the
share price milestones were further adjusted, to reflect the return
of value to shareholders in June 2019
-- The exercise price was further adjusted to GBP0.71, and the
share price milestones were further adjusted to reflect the return
of value to shareholders in December 2019
The modification has not resulted in a change in the valuation
of the award and this continues to be recognised over the remainder
of the original vesting period.
Performance Share Plan 2018 Award ("PSP 2018")
The unvested performance condition of this award had not been
met at the end of the vesting period.
Performance Share Plan 2019 Award ("PSP 2019")
The performance conditions had not been met at the end of the
vesting period.
7. Loss before income tax
Loss before income tax is stated after charging:
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
==================================== ============== ============== ============
Depreciation of property, plant and
equipment 55 55 108
Amortisation of intangible assets 1,637 822 2,377
Staff costs including share-based
payments charge 6,737 6,433 12,609
8. Taxation
Analysis of tax credit/charge recognised in the period/year
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
==================== ============== ============== ============
Current tax credit (326) (230) (1,267)
Deferred tax charge 85 - 53
-------------- -------------- ------------
Total tax credit (241) (230) (1,214)
============== ============== ============
Deferred tax asset
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
======================================== ============== ============== ============
Balance at start of the period/year 250 303 303
Debit to the statement of comprehensive
income (85) - (53)
-------------- -------------- ------------
Balance at end of the period/year 165 303 250
============== ============== ============
Comprised of:
Losses 165 303 250
-------------- -------------- ------------
Total deferred tax asset 165 303 250
============== ============== ============
A deferred tax asset was recognised in 2021 in respect of Vertus
Capital SPV 1 Limited, as it became profitable.
9. Intangible assets
Software Separately
Client contracts licences identifiable
and similar intangible Goodwill Total
assets assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================ ================== ============ ============= ========== =======
Cost
At 1 January 2023 6,399 4,773 3,237 16,569 30,978
Additions 441 1,763 - - 2,204
Disposals (114) - - - (114)
Exchange differences (1) (24) - - (25)
-------------
At 30 June 2023 (unaudited) 6,725 6,512 3,237 16,569 33,043
================== ============ ============= ========== =======
Amortisation
At 1 January 2023 (2,496) (2,082) (1,581) - (6,159)
Charge for the period (521) (792) (324) - (1,637)
Disposals 114 - - - 114
Exchange differences - 15 - - 15
At 30 June 2023 (unaudited) (2,903) (2,859) (1,905) - (7,667)
================== ============ ============= ========== =======
Accumulated impairment
losses
At 1 January 2023 (408) - - - (408)
Charge - - - (1,250) (1,250)
------------------ ------------ ------------- ---------- -------
At 30 June 2023 (unaudited) (408) - - (1,250) (1,658)
================== ============ ============= ========== =======
Net book value
------------------ ------------ ------------- ---------- -------
At 30 June 2023 (unaudited) 3,414 3,653 1,332 15,319 23,718
------------------ ------------ ------------- ---------- -------
At 31 December 2022 3,495 2,691 1,656 16,569 24,411
================== ============ ============= ========== =======
Software Separately
Client contracts licences identifiable
and similar intangible Goodwill Total
assets assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ================== ============ ============= ========== =======
Cost
At 1 January 2022 5,490 2,579 1,642 15,746 25,457
Additions 905 2,254 - - 3,159
On Acquisition - 3 1,595 823 2,421
Disposals - (75) - - (75)
Exchange differences 4 12 - - 16
-------------
At 31 December 2022 6,399 4,773 3,237 16,569 30,978
================== ============ ============= ========== =======
Amortisation
At 1 January 2022 (1,607) (1,181) (1,070) - (3,858)
Charge (889) (977) (511) - (2,377)
Disposals - 75 - - 75
Exchange differences - 1 - - 1
At 31 December 2022 (2,496) (2,082) (1,581) - (6,159)
================== ============ ============= ========== =======
Accumulated impairment
losses
At 1 January 2022 (408) - - - (408)
At 31 December 2022 (408) - - - (408)
================== ============ ============= ========== =======
Net book value
------------------ ------------ ------------- ---------- -------
At 31 December 2022 3,495 2,691 1,656 16,569 24,411
------------------ ------------ ------------- ---------- -------
At 31 December 2021 3,475 1,398 572 15,746 21,191
================== ============ ============= ========== =======
Client contracts comprise the directly attributable costs
incurred at the beginning of an Early Payment Scheme Service
contract to revise a client's existing payment systems and provide
access to the Group's software and other intellectual property.
These implementation costs are comprised primarily of employee
costs.
The useful economic life for each individual asset is deemed to
be the term of the underlying Client contract (generally 5 years)
which has been deemed appropriate and for impairment review
purposes, projected cash flows have been discounted over this
period.
The amortisation charge is recognised in fee expenses within the
statement of comprehensive income, as these costs are incurred
directly through activities which generate fee income.
Software, licenses and similar assets comprises separately
acquired software, as well as costs directly attributable to
internally developed platforms across the Group. These directly
attributable costs are associated with the production of
identifiable and unique software products controlled by the Group
and are probable of producing future economic benefits. They
primarily include employee costs and directly attributable
overheads.
A useful economic life of 3 to 5 years has been deemed
appropriate and for impairment review purposes projected cash flows
have been discounted over this period.
The amortisation charge is recognised in depreciation and
amortisation on non-financial assets within the statement of
comprehensive income.
Goodwill and "Separately identifiable intangible assets" arise
from acquisitions made by the Group.
Vertus
In July 2019, the Group converted into ordinary shares its
existing convertible loan with Vertus Capital in full satisfaction
and discharge of the loan. This, together with a further cash
payment, gave the Group 51% ownership of Vertus Capital and Vertus
SPV 1.
Goodwill of GBP1,714,000 arose from this transaction and has
been included within the short term finance segment of the
business. In 2021, the Group increased its ownership of Vertus
Capital from 51% to 53.8%, resulting in a GBP50,000 adjustment to
Goodwill.
Separately identifiable intangible assets of GBP255,000
primarily related to the value of existing third party
relationships on acquisition have been identified.
These are being amortised over 5 years and the amortisation
charge for the year was GBP26,000 (2022: GBP51,000).
Net Book value of these assets at 30 June 2023 was GBP55,000
(2022: GBP81,000).
In August 2023, the Group accepted a non-binding offer for its
shares in Vertus Capital. Following this, Goodwill related to this
transaction has been impaired by GBP1,250,000.
Goodwill related to this transaction excluding Separately
identifiable intangible assets at 30 June 2023 was GBP158,000
(2022: GBP1,408,000).
10. Property, plant and equipment
Fixtures Computer Right-of-Use
& equipment Asset Total
fittings
Group GBP'000 GBP'000 GBP'000 GBP'000
===================== ========= ========== ============ =======
Cost
At 1 January 2023 139 96 276 511
Additions 14 14 - 28
Exchange differences 1 (1) - -
--------- ---------- ------------ -------
At 30 June 2023 154 109 276 539
--------- ---------- ------------ -------
Depreciation
At 1 January 2023 (60) (61) (44) (165)
Charge (15) (12) (28) (55)
Exchange differences - 1 - 1
--------- ---------- ------------ -------
At 30 June 2023 (75) (72) (72) (219)
--------- ---------- ------------ -------
Net book value
--------- ---------- ------------ -------
At 30 June 2023 79 37 204 320
========= ========== ============ =======
At 31 December 2022 79 34 232 345
========= ========== ============ =======
Fixtures Computer Right-of-Use
& equipment Asset Total
fittings
Group GBP'000 GBP'000 GBP'000 GBP'000
==================== ========= ========== ============ =======
Cost
At 1 January 2022 53 78 429 560
Additions 86 27 276 389
Disposals - (9) (429) (438)
At 31 December 2022 139 96 276 511
--------- ---------- ------------ -------
Depreciation
At 1 January 2022 (44) (44) (407) (495)
Charge (16) (26) (66) (108)
Disposals - 9 429 438
At 31 December 2022 (60) (62) (44) (166)
--------- ---------- ------------ -------
Net book value
--------- ---------- ------------ -------
At 31 December 2022 79 34 232 345
========= ========== ============ =======
At 31 December 2021 9 34 22 65
========= ========== ============ =======
11. Loans and advances
30 June 2023 31 December
2022
(Unaudited) (Audited)
GBP'000 GBP'000
========================= ============= ============
Total loans and advances 26,714 24,215
Less: loss allowance (144) (54)
26,570 24,161
============= ============
Past due receivables relating to loans and advances are analysed
as follows:
30 June 2023 31 December
2022
(Unaudited) (Audited)
GBP'000 GBP'000
============================== ============= ============
Neither past due nor impaired 26,142 23,875
Past due: 0-30 days 243 129
Past due: 31-60 days 49 77
Past due: 61-90 days 7 41
Past due: more than 91 days 48 39
Impaired 81 -
26,570 24,161
============= ============
The financial risk management procedures disclosed in the 31
December 2022 audited financial statements have been and remain in
place for the period to 30 June 2023.
12. Share capital
Share Capital Total
GBP'000 GBP'000
======================================= ============= ========
94,182,943 shares at GBP0.91 per share
at 30 June 2023 (unaudited) 85,706 85,706
All ordinary shares carry equal entitlements to any
distributions by the Company. No dividends were proposed by the
Directors for the period ended 30 June 2023.
13. Borrowings
30 June 2023 31 December
2022
(Unaudited) (Audited)
GBP'000 GBP'000
=========================== ============= ============
Loans due within one year 5,449 1,783
Loans due in over one year 15,688 16,764
21,137 18,547
============= ============
Movements in borrowings during the period/year
The below table identifies the movements in borrowings during
the period/year.
GBP'000
====================================== =======
Balance at 1 January 2023 18,547
Funding drawdown 5,789
Interest expense 758
Fee amortisation 55
Origination fees paid (41)
Repayments (3,278)
Interest paid (686)
Exchange differences (7)
Balance at 30 June 2023 (Unaudited) 21,137
=======
Balance at 1 January 2022 12,985
Funding drawdown 8,707
Interest expense 852
Fee amortisation 110
Repayments (3,337)
Interest paid (777)
Exchange differences 7
Balance at 31 December 2022 (Audited) 18,547
=======
14. Earnings per share
Earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period/year.
The calculation of the basis and adjusted earnings per share is
based on the following data:
6 months 6 months Year ended
ended ended 31 December
2022
30 June 2023 30 June 2022 (Audited)
(Unaudited) (Unaudited) GBP'000
GBP'000 GBP'000
=============================================== ============== ============== ============
Number of shares
At period/year end 94,182,943 94,182,943 94,182,943
Weighted average 94,182,943 86,727,509 90,485,862
Earnings attributable to ordinary shareholders GBP'000 GBP'000 GBP'000
Loss after tax attributable to the owners
of TruFin plc (5,995) (3,716) (6,637)
Earnings per share* Pence Pence Pence
Basic and Diluted (6.4) (4.3) (7.3)
* All Earnings per share figures are undiluted and diluted.
Management has been granted 5,451,578 share options in TruFin
plc (See note 6 for details). These could potentially dilute basic
EPS in the future, but were not included in the calculation of
diluted EPS as they are antidilutive for the periods presented, as
the Group is loss making.
15. Related party disclosures
Transactions with directors
Key management personnel disclosures are provided in notes 5 and
6.
During the period, the Group made loans to Storm Chaser UG, a
company based in Germany. Storm Chaser UG is 100% owned by Storm
Chaser Games - an associate company of Playstack (see note 1). The
balance of the loans including interest at the reporting date was
GBP756,000 (2022: GBP525,000)
16. Post balance sheet events
On 10 July 2023, the Company issued 11,653,744 ordinary shares
through a Placing and an Open Offer. These were issued at GBP0.65
per share, raising gross proceeds of GBP7,575,000.
On 27 July 2023, the Company awarded the first three tranches of
awards under a new Long Term Incentive Plan ("LTIP"). These are in
the form of options over a total of 3,116,667 Ordinary Shares (the
"Options") to the Chief Executive Officer and other senior
employees.
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END
IR FZGZLGRDGFZZ
(END) Dow Jones Newswires
September 29, 2023 02:00 ET (06:00 GMT)
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