TIDMZAIM
RNS Number : 1436N
ZAIM Credit Systems PLC
18 January 2023
For Immediate Release
18 January 2023
Zaim Credit Systems Plc
("Zaim" or the "Group")
Unaudited financial results for six months ended 30 June
2022
Navigation through Challenging Times
Zaim Credit Systems plc (the 'Group' or 'Zaim'), announces its
unaudited financial results for the six-month period ended 30 June
2022. A copy of the full interim results will be available on the
Company's website.
Please note that these unaudited results for the six months
ended 30 June 2022 relate to the consolidated results of Zaim
Credit Systems plc and Zaim Express LLC (Zaim Express). As
announced on 28 September 2022 there is a discrepancy with regard
to the ownership of the share capital of Zaim Express and the
Company is continuing to experience a lack of effective operating
control over Zaim Express, which historically (and during the
reported period) has carried out the Group's main trading
activities. The Company plans to announce more details of this
discrepancy shortly and these results should be read in the context
of that announcement as this will have a significant impact on the
financial results of the Company for the next financial reporting
period.
Key H1 2022 Highlights of Group Performance (including Zaim
Express)
-- Strong growth in the amount of overall loans issued for the
H1 2022 period by 53% to GBP17.53m (H1 2021: GBP11.45m);
-- Mobile application launched in the second quarter of 2021
became an important sales channel with loans issued growing by 13
times to GBP2.05m (H1 2021: GBP0.16m)
-- Operating income grew by 11% to GBP2.2m (H1 2021: GBP1,98m)
-- Gross outstanding loans to customers increased by 73% to GBP63.18m (H1 2021: GBP36.47m)
-- Total outstanding loans, measured at amortised cost grew by
56% to GBP4,41m (H1 2021: GBP2,83m)
Zaim CEO, Siro Cicconi commented:
" Zaim Express generated good results during the first half of
2022. During the period the amount of loans issued grew by 53% vs.
the first half of 2021 on the back of 48% growth of loans issued
online to GBP14.37m and loans issued via mobile application
(launched in the Q2 2021), growing by 13 times to GBP2.05m. In the
first half of 2022 82% of loans were issued online vs. 85% in the
first half of 2021 and 12% were issued via mobile application vs.
1% in the first half of 2021. The share of loans issued offline
decreased from 14% in the first half of 2021 to 6% in the first
half of 2022.
Nevertheless, interest income decreased by 7% from GBP4.25m to
GBP3.94m. Operating income grew by 11% to GBP2.2m.
Gross outstanding loans to customers increased by 73% from GBP
36 . 4 7m in the first half of 2021 to GBP 63 .18m in the first
half of 2022. At the same time total outstanding loans, measured at
amortised cost grew by 56% from GBP2.83m to GBP4.41m
Given the excellent progress made by the Zaim Express business
in difficult conditions since 2020, I am very sad about the events
that have taken place since the end of this reporting period that
mean that the Company will not in the short term at least receive
the cashflow benefits of this improved performance "
Financial highlights
1H 2022 1H 2021
GBP'000 GBP'000
-------- --------
Loans issued during the period 17,528 11,447
-------- --------
Interest income 3,940 4,253
-------- --------
Operating income 2,202 1,984
-------- --------
Total comprehensive profit / (loss) 1,025 238
-------- --------
June 30, December 31,
2022 2021
GBP'000 GBP'000
--------- -------------
Gross outstanding loans to customers 63,180 36,469
--------- -------------
Total outstanding loans, measured at
amortised cost 4,413 2,825
--------- -------------
Cash and cash equivalents 916 1,167
--------- -------------
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014, which forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (as amended).
Contact:
Zaim Credit Systems
Plc
Simon Retter
Siro Cicconi Tel: +44 (0) 73 9377 9849
Optiva Securities Limited
Vishal Balasingham Tel: +44 (0) 20 3137 1902
Zaim redit Systems plc
Unaudited Interim Condensed Consolidated Statement of profit or
loss and Other Comprehensive Income for the six months ended 30
June
Six months Six months
ended ended
30 June 2022 30 June 2021
Unaudited Unaudited
Notes GBP'000 GBP'000
------------------------------------------ ----- ------------- -------------
Interest income 6 3,550 4,253
Interest expense 6 (56) (74)
Interest expense - lease 6 (20) (9)
------------------------------------------ ----- ------------- -------------
Net interest income 3 , 475 4 , 1 6 9
Allowance for ECL/impairment of loans
to customers 4 (3,156) (2,931)
------------------------------------------ ----- ------------- -------------
Net interest income after allowance for
ECL/impairment of loans to customers 319 1,238
Gains less losses from dealing in foreign
currency 173 30
Other operating income / loss 1,710 716
------------------------------------------ ----- ------------- -------------
Operating income 2,202 1,984
Charge for share options granted (3) (17)
Staff costs (820) (724)
Operating expenses 7 (1, 568 ) (948)
Profit / Loss before income tax (189) 296
Income tax expense - (66)
------------------------------------------ ----- ------------- -------------
Net profit / loss (189) 229
Net other comprehensive income that may
be reclassified to profit or loss
Foreign exchange differences arising on
translation into presentation currency 1,214 9
Total comprehensive Profit 1,025 238
------------------------------------------ ----- ------------- -------------
Zaim redit Systems plc
Unaudited Interim Condensed Consolidated Statement of financial
position as at
30 June 31 December
2022 2021
Unaudited Audited
Notes GBP'000 GBP'000
-------------------------- ------ ---------- -----------
Assets:
Cash and cash equivalents 916 1,474
Loans to customers 4 4,413 2,825
Property and equipment 39 20
Right-of-use assets 5 760 540
Intangible assets 48 29
Other assets 611 456
---------------------------------- ---------- -----------
Total Assets 6,787 5,343
---------------------------------- ---------- -----------
Liabilities
Loans received 936 1,305
Lease liabilities 5 753 534
Other liabilities 1,850 1,284
---------------------------------- ---------- -----------
Total liabilities 3,539 3,123
---------------------------------- ---------- -----------
Equity
Capital and reserves:
Charter capital 8 4, 62 0 4,620
Shares to be issued Reserve 800 800
Additional capital 8 6,7 56 6,756
Translation reserve 5 , 62 6 4,412
Merger reserve 1 22. 9 65 22,9 65
Share options Reserve 251 248
Accumulated deficit ( 37,768 ) (37,580)
Total equity 3,248 2,220
----------------------------- ---------- --------
Total liabilities and equity 6,787 5,343
----------------------------- ---------- --------
Interim Condensed Statement of changes in shareholders' equity
(Unaudited) for the six months ended 30 June 2022
Foreign
currency
Charter Shares to Additional translation Share Merger Accumulated Total
capital be issued capital reserve options reserve Deficit Equity
GBP'000 Reserve GBP'000 (FCTR ) Reserve GBP'000 GBP'000 GBP'000
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Balance as at
1 January
2022 4,620 800 6,756 4,412 248 22,965 (37,580) 2,220
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Issue of - -
ordinary
shares - - - - - -
Comprehensive
loss for the
period - - - 1,214 - - (188) 1,025
Share-based
payments - - - - 3 - - 3
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Balance as at
30 June 2022 4,620 800 6,756 5,626 251 22,965 (37,768) 3,248
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Interim Condensed Statement of changes in shareholders' equity
(Unaudited) for the six months ended 30 June 2021
Foreign
currency
Charter Shares to Additional translation Share Merger Accumulated Total
capital be issued capital reserve options reserve Deficit Equity
GBP'000 Reserve GBP'000 (FCTR ) Reserve GBP'000 GBP'000 GBP'000
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Balance as at
1 January
2021 4,370 800 6,078 4,390 218 22,965 (38,263) 558
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Issue of
ordinary
shares 250 - 678 - - - - 928
Comprehensive
loss for the
period - - - 9 - - 229 238
Share-based
payments - - - - 17 - - 17
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Balance as at
30 June 2021 4,620 800 6,756 4,399 235 22,965 (38,033) 1,741
--------------- ------------ ------------ ---------- ------------ ------------ -------- ------------ ---------
Unaudited Interim Condensed Consolidated Statement of Cash
Flows
For the six months ended 30 June
Six months Six months
ended 30 ended 30
June 2022 June 2021
Unaudited Unaudited
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
Cash flows from operating activities
Interest received 4, 669 3, 239
Interest paid (i ncluding lease) (42) (30)
Gains less losses from dealing in foreign currency 20 (1)
Other operating income 1,710 763
Staff costs (742) (724)
Operating expenses (1,545) (840)
Income tax paid (85) (23)
Cash flows from/(used in) operating activities
before changes in operating assets and liabilities 3,986 2,384
Net (increase)/decrease in operating assets
Loans to customers (4,222) (3,020)
Other assets (3) (194)
Net decrease in operating liabilities
Other liabilities 80 132
---------------------------------------------------- ---------- ----------
Net cash flows from operating activities (159) (698)
---------------------------------------------------- ---------- ----------
Cash flows from investing activities
Other loan issued - (227)
Purchases of property and equipment and intangible
assets (9) (21)
Net cash flows from investing activities (9) (248)
---------------------------------------------------- ---------- ----------
Cash flows from financing activities
Lease repayment (121) (130)
Proceeds from loans received 1,164 679
Repayment of loans received (1,741) -
Issue of ordinary shares - 1 , 000
Share issue costs - (73)
Net cash flows from financing activities (698) 1,476
---------------------------------------------------- ---------- ----------
Effect of exchange rate changes on cash and
cash equivalents 308 (4)
---------------------------------------------------- ---------- ----------
Net change in cash and cash equivalents (558) 527
Cash and cash equivalents at the beginning of
the year 1,474 641
---------------------------------------------------- ---------- ----------
Cash and cash equivalents at the end of the
period 916 1,167
---------------------------------------------------- ---------- ----------
Notes to the Financial information
1. Activities of the Group. General information
The principal activity of Zaim Credit Systems plc ("the
Company") and its subsidiary Zaim-Express, LLC (together "the
Group") is issuance of microloans to individuals (retail
customers). The Company was incorporated as Agana Holdings Plc and
registered in England and Wales on 15 June 2018 as a public limited
company with company registration number 11418575 and LEI,
213800Z4MI9KSZA2VW72 and on 22 July 2019 the Company changed its
name to Zaim Credit Systems Plc.
On 18 September 2019 the Company acquired the entire issued
share capital of Zaim-Express LLC. The Company is now the holding
company of a Russian based financial services company Zaim-Express
LLC (Subsidiary), so main function of the Company is to provide
holding company services and undertake management of the listed
activities on the stock exchange. These business combination in
2019 was stated in consolidated financial statements as reverse
acquisitions under IFRS 3.
The organizational structure of Group:
The share votes of the Company
-----------------------------------
The name of Subsidiary Country of registration 30. 06 .202 2 31. 12 .202 1
----------------------- --------------------------- -------------------- -------------
Z aim-Express LLC Russia 100% 100%
The Subsidiary's principle activity is issuance of microloans
through the network of it's branches in Russian cities (Moscow and
St. Petersburg). The Subsidiary was entered in the state register
of microfinance organisations on 29 August 2011, registration
number 2110177000440. The Subsidiary's assets and liabilities are
located in the Russian Federation. The average number of
Subsidiary's employees is as follows:
The average number of Subsidiary's employees Six months , Six months ,
2022 20 2 1
-------------------------------------------------- --- ---------------------- -------------------
Total average number of employees 1 23 150
The average number of parent Company's employees (directors) is
as follows:
The average number of parent Company's employees Six months , Six months ,
2022 2021
-------------------------------------------------- --- ------------- -------------
Directors 5 5
As at 30 June 2022, the man participant of the Company is Zaim
Holdings SA (with share of votes 69.27%). The ultimate controlling
party of the Group is an individual - Mr. Siro Donato Cicconi.
Subsidiary has 24 stores as at 30 June 2022 (31 December, 2021:
26 stores), from which it conducts business throughout the Russian
Federation.
According to the review of the Central Bank of Russia of the MFO
market in the 1st Q 2022, the volume of microloans issued in the
first quarter fell by 8% to 175 billion rubles. Since the beginning
of the year, the share of overdue microloans (NPL90 +) has
increased by 1.7 percentage points to 31.3%. In the 1st Q 2022,
there was a tendency to increase the indebtedness of borrowers of
microfinance companies. The share of clients paying off 80% of
their income for microloans increased from 47% to 52% in the first
quarter of 2022. At the same time, the share of clients giving 30%
of their income to pay off microloans decreased from 21% to
19%.
Experts expect some slowdown of the MFO market in 2022. Among
the possible reasons:
- Tightening of the policy of the Central Bank nd other legal
restrictions
- Growth of competition
- Unstable financial situation of the borrower
The unstable economic situation of the country may lead to an
increase in the demand for microloans, but due to the tightening of
the risk policy and the updated scoring systems of microfinance
companies, a low percentage of applications will receive a positive
decision. An increase in the cost of attracting a borrower is
expected, and this reduces the margin and the growth rate of the
microcredit market.
The growth of the microfinance market may be due to an increase
in the share of e-commerce and the introduction of new products.
Experts believe that the growth of MFOs is possible, for example,
due to the cooperation of microcredit companies with marketplaces,
as it will lead to more reliable borrowers. In addition, microloans
will be actively developed in the online segment.
Experts also believe that the pandemic not only did not damage
microcredit, but, on the contrary, contributed to the consolidation
of the market, the improvement of the quality of portfolios, and
accelerated the transition to the online segment. Small companies
disappear from the market, and the initiative passes to larger
players who are able to attract investments, develop their own
technological platforms, diversify their activities and interact
with regulators.
During first half of year 2022 the business of the Group
experienced new challenge, resulted in decrease of proceeds from
collecting activity (due to moratorium for collecting activity
introduced by the authorities after special operation at Ukrain).
As a result, the cash position decreased that leads to decrease in
amount issued, to keep cash balance. That influenced the
profitability of the Group n 2nd Q 2022. At the current moment,
Group are improving proceeds from collecting activity due to new
court deals (released after the 1st April 2022, that are excluded
from moratorium). That allows to increase amount issued and
significantly improve profitability of business.
The Group's perspective is to continue development of online
strategy and focus on collecting activities.
2. Basis of preparation
The condensed consolidated interim financial statements have
been prepared using accounting policies consistent with
International Financial Reporting Standards and in accordance with
International Accounting Standard 34 Interim Financial Reporting.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2020, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union.
The condensed consolidated interim financial statements set out
above do not constitute statutory accounts within the meaning of
the Companies Act 2006. They have been prepared on a going concern
basis in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the year
ended 31 December 2021 were approved by the Board of Directors on
17 May 2022 and delivered to the Registrar of Companies. The report
of the auditors on those financial statements was unqualified.
The condensed consolidated interim financial statements of the
Company have not been audited or reviewed by the Company's auditor,
Shipley's LLP.
Going concern
This financial information reflects Group's management's current
assessment of the impact of the Russian business environment on the
operations and the financial position of Group. The future economic
direction of the Russian Federation is largely dependent upon the
effectiveness of measures undertaken by the Russian Federation
Government and other factors, including regulatory and political
developments which are beyond Group's control. Group's management
cannot predict what impact these factors can have on Group's
financial position in future. This financial information was
prepared on a going concern assumption.
The above factors in conjunction with continuing economic and
political changes taking place in the Russian Federation indicate
that a material uncertainty exists that may cast significant doubt
on Group's ability to continue as a going concern. This ability
depends on future events, including achieving the level of the
loans to customers portfolio sufficient to incur costs and earn
profits and the ability and willingness of Group's sole participant
to continue with financial assistance to Group.
The Financial Statements have been prepared on a going concern
basis. In 2022, the Group continues to develop an online business
model ( remote lending via the Internet, which resulted in a
significant decrease in fixed lease and staff costs and a decrease
in the share of lending costs within total expenses ) . The Group
continu e s to optimise the network operation, including removal of
loss-making outlets and enhancement of the Internet channel to
attract customers. The Group is actively collecting overdue debts,
inter alia, through legal action.
The Directors consider that the Group has sufficient funds to
undertake its operating activities for a period of at least the
next 12 months including any additional expenditure required in
relation to any adverse impacts from the Covid-19 Pandemic or
situations with Russian-Ukrainian relations. The Group has cash
reserves which are considered sufficient by the Directors to fund
the Group's desired strategy of increasing the loan book both
online and in the store.
Risks and uncertainties
The Director continuously assesses and monitors the key risks of
the business. The key risks that could affect Group's medium-term
performance and the factors that mitigate those risks have not
substantially changed from those set out in Group's 2021 Financial
Information. The key financial risks are liquidity risk, interest
rate risk.
The economy of the Russian Federation continues to display
certain characteristics of an emerging market. These
characteristics include, in particular, inconvertibility of the
national currency in most countries outside of Russia and
relatively high inflation rates. The current Russian tax, currency
and customs legislation is subject to varying interpretations and
frequent changes. The country's economy depends on movements of oil
and gas prices.
The future economic development of the Russian Federation is
largely dependent upon the effectiveness of economic measures,
financial mechanisms and monetary policies adopted by the
Government, together with tax, regulatory, and political
developments.
Critical accounting estimates
The preparation of condensed consolidated interim financial
information requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in note 3 of Group's 2021 Financial Information. The nature
and amounts of such estimates have not changed significantly during
the interim period.
Currency
The GBP was chosen as the presentation currency of the
consolidated financial information, as the shareholders of Group
use information prepared in GBP to make decisions and evaluate the
financial results of Group.
For the purpose of presenting the consolidated financial
information, the financial results and balance sheet items of
Subsidiary are translated into the presentation currency of Group
in accordance with the requirements of International Accounting
Standard IAS 21 "Effect of Changes in Foreign Exchange Rates" as
follows:
(a) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Gains and losses on purchase and sale of foreign currency are
determined as a difference between the selling price and the
carrying amount at the date of the transaction.
(b) Group companies
The results and financial position of all the Group's entities
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
1. assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
2. each component of profit or loss is translated at average
exchange rates during the accounting period (unless this average is
not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions); and
3. all resulting exchange differences are recognised in other
comprehensive income
3. Significant accounting policies
The condensed consolidated interim financial information have
been prepared under the historical cost convention as modified by
the revaluation of certain of the subsidiaries' assets and
liabilities to fair value for consolidation purposes.
The same accounting policies, presentation and methods of
computation have been followed in these condensed consolidated
interim financial information as were applied in the preparation of
Group's Financial Information for the year ended 31 December 2021
(see Note 3).
4. Loans to customers
30 June
202 2
Unaudited 31 December
GBP'000 , 2021
--------------------------------------------- ----------- ------------
Loans to customers 63,180 36 , 469
Less: allowance for ECL /impairment of loans
to customers (58,767) ( 33 , 644 )
--------------------------------------------- ----------- ------------
Total loans to customers at amortised cost 4 , 413 2 , 825
--------------------------------------------- ----------- ------------
Below is analysis of movements in the ECL allowance during 1H
2022 (by type of loans specified in the first table of the Note),
GBP:
Stage
1 Stage 2 Stage 3 Total
-------------------------- ------- ------- ------- -------
GBP'000 GBP'000 GBP'000 GBP'000
ECL allowance as at 31
December 2021 417 1,010 32,218 33,644
Assets recognized for
the period 1,540 - - 1,540
Assets derecognized or
collected (939) (180) (432) (1,551)
Transfers to Stage 2 (78) 78 - -
Transfers to Stage 3 (516) (158) 674 -
Net loss on ECL allowance
charge/(reversal) 44 678 2,317 3,039
Translation into GBP 282 858 20,954 22,095
ECL allowance as at 30
June 2022 750 2,286 55,731 58,767
-------------------------- ------- ------- ------- -------
Below is analysis of movements in the ECL allowance during 1H
2021 (by type of loans specified in the first table of the Note),
GBP:
Stage
1 Stage 2 Stage 3 Total
-------------------------- ------- ------- ------- -------
GBP'000 GBP'000 GBP'000 GBP'000
ECL allowance as at 31
December 2020 201 589 26,238 27,029
Assets recognized for
the period 1,119 - - 1,119
Assets derecognized or
collected (63) (37) (1,102) (1,202)
Transfers to Stage 2 (252) 252 - -
Transfers to Stage 3 (663) (287) 951 -
Net loss on ECL allowance
charge/(reversal) - 601 2,414 3,014
Translation into GBP 4 14 25 43
ECL allowance as at 30
June 2021 345 1,132 28,525 30,003
-------------------------- ------- ------- ------- -------
The ECL allowance for loans and advances to customers recognised
during the period is impacted by various factors. The table below
describes the main changes:
-- transfers between Stages 1 and 2 and Stage 3 due to
significant increase (or decrease) in credit exposure or impairment
during the period and subsequent increase (or decrease) in the
estimated ECL level: for 12 months or over the entire period;
-- accrual of additional allowances for new financial
instruments recognised during the period, as well as reduction in
allowance as a result of derecognition of financial instruments
during the period;
-- impact on ECL estimation due to changes in model assumptions,
including changes in probability of default, EAD and LGD during the
period resulting from regular updating of the model inputs.
Following is the credit quality analysis of loans to customers
as at 30 June 2022:
Stage 1 Stage 2 Stage 3 Total
--------------------------------------------- --------------- ------------ ----------- ---------------
GBP'000 GBP'000 GBP'000 GBP'000
Loans to customers
Minimum credit risk 3,689 - - 3,689
Low credit risk - 199 - 199
Moderate credit risk - 1,761 - 1,761
High credit risk - 1,800 - 1,800
Default - - 55,731 55,731
Total loans to customers before allowance 3,689 3,760 55,731 63,180
--------------------------------------------- --------------- ------------ ----------- ---------------
ECL allowance (750) (2,286) (55,731 ) (58,767 )
--------------------------------------------- --------------- ------------ ----------- ---------------
Total loans to customers after ECL allowance 2,939 1,474 - 4,413
--------------------------------------------- --------------- ------------ ----------- ---------------
Following is the credit quality analysis of loans to customers
as at 31 December 2021:
Stage 1 Stage 2 Stage 3 Total
---------------------------------------------- ------- ------- --------- --------
Loans to customers
Minimum credit risk 2 425 - - 2 425
Low credit risk - 135 - 135
Moderate credit risk - 995 - 995
High credit risk - 698 - 698
Default assets - - 32 218 32 218
Total loans to customers before ECL allowance 2 425 1 827 32 218 36 469
---------------------------------------------- ------- ------- --------- --------
ECL allowance (417) (1 010) (32 218) (33 644)
---------------------------------------------- ------- ------- --------- --------
Total loans to customers after ECL allowance 2 008 817 - 2 825
---------------------------------------------- ------- ------- --------- --------
The ECL allowance for loans to customers recognized during the
period is impacted by different factors. Information on the
assessment of expected credit losses is disclosed in Note 3 of
Group's Financial Statements for the year 2020.
The Group uses the following approach to measurement of expected
credit losses:
-- portfolio-based measurement: internal ratings are assigned
individually, but the same credit risk parameters (e.g. PD, LGD)
are applied to similar credit risk ratings and homogeneous credit
portfolio segments in the process of ELC estimation.
This approach provides for aggregation of the portfolio into
homogeneous segments on the basis of specific information on
borrowers, such as delinquent loans, historic data on prior period
losses and forward-looking macroeconomic information.
The amounts of loans recognised as "past due" represent the
entire balance of such loans rather than the overdue amounts of
individual payments.
5. Lease
The Group has agreements for lease of premises.
The Group did not apply a simplified approach to recognise lease
modifications allowed due to the COVID-19 pandemic.
There was a significant decrease in the number of concluded
lease agreements in the year 2020 due to reduced business activity
because of Covid-19 pandemic (as a measure to prevent unprofitable
business) and also because of intentions of management to develop
the new business-model - which supposes substantial share of
online-loans. In 1 half year 2022 there was no significant
reduction of stores, only two of them were closed as the result of
monitoring for unprofitableness
The carrying amount of right-of- use assets and its movements
during the period are presented below:
Group Real Estate Total
----------------------------------------- ------------ ---------
As at 1 January 2022 540 540
Additions - -
Disposals (44) (44)
Modification of lease terms 104 104
Depreciation charge (1 26 ) (1 26 )
Effect of translation into presentation
currency 286 286
----------------------------------------- ------------ ---------
As at 30 June 2022 760 760
----------------------------------------- ------------ ---------
As at 1 January 2021 298 298
Additions - -
Disposals (15) (15)
Modification of lease terms 474 474
Depreciation charge (220) (220)
Effect of translation into presentation
currency 3 3
----------------------------------------- ------ -------
As at 31 December 2021 540 540
----------------------------------------- ------ -------
The carrying amounts of lease liabilities and their movements
during the period are set out below:
Group
Lease liabilities Real Estate Total
----------------------------------------- ------------ -------
As at 1 January 2022 534 534
Additions - -
Disposals (43) (43)
Interest expense on lease liabilities 20 20
Modification of lease terms 100 100
Lease payments (141) (141)
Effect of translation into presentation
currency 283 283
----------------------------------------- ------------ -------
As at 30 June 2022 753 753
----------------------------------------- ------------ -------
Lease liabilities Real Estate Total
----------------------------------------- --------------------------- -----------------------
As at 1 January 2021 347 347
Interest expense on lease liabilities 15 15
Lease payments (277) (277)
Modifications and remeasurement 462 462
Derecognition (17) (17)
Effect of translation into presentation
currency 2 2
----------------------------------------- --------------------------- -----------------------
As at 31 December 2021 534 534
----------------------------------------- --------------------------- -----------------------
6. Interest income and interest expense
Six months
Six months ended ended
30 June 2022 30 June 2021
Unaudited Unaudited
GBP'000 GBP'000
----------------------- ---------------- -------------
Interest income
Loans to customers 3,490 4,253
Other loans issued 6 0 -
Total interest income 3,550 4,253
----------------------- ---------------- -------------
Interest expense
Loans received (56) (74)
Lease (20) (9)
Total interest expense (76) (84)
Net interest income 3,475 4,169
----------------------- ---------------- -------------
7. Operating expenses
Periodic Operating expenses
Six months
ended Six months ended
30 June 2021 30 June 2021
Unaudited Unaudited
GBP'000 GBP'000
---------------------------------- ------- --------------- ----------------
Advertising and Marketing 547 387
Consulting services 234 75
State Duty 137 58
Deprication of Right-of-use
assets 126 113
SMS 124 55
Postal Servives 106 48
Banking services 98 70
Investors relations 39 12
Communication 37 31
Material expenses 15 13
Rental expenses 11 13
Security 5 5
Other expenses 90 68
Total periodic operating expenses 1 , 568 948
------------------------------------------ ----- --------- ----------------
8 . Charter and Additional Capital
Below is a reconciliation of the movement in the legal parent
Company Share capital
In 1 half year 2022, there was no changes in Share capital
structure and amount
During 1 half year 2021, Group has completed an equity fundraise
of GBP1,000,000 (gross) through the issue of 25,000,000 ordinary
shares at a price of 4.0 pence per ordinary share.
The Fundraise has been undertaken by way of a placing of new
ordinary shares of GBP0.01 par value in the share capital of the
Group. The Fundraise is to provide additional capital for expansion
of the loan portfolio and the development of new products.
Charter capital
Group Amount
Issued and fully paid Number , GBP
--------------------------------- ------------ ---------
As at 1 January 2022 461 , 975
Ordinary shares of GBP0.01 each , 000 4,619,750
Issue of ordinary shares - -
4,6 1
As at 30 June 2022 46 1,975,000 9,750
---------------------------------- ------------ ---------
Additional capital
Group Amount, GBP
As at 1 January 2022 6,755,628
Premium arising on issue of ordinary shares -
Issue costs -
As at 30 June 2022 6 , 755,628
---------------------------------------------- -----------
9. Related party transactions
Transactions with parent company
30 June , 2022,
Unaudited 31 Dec. ,2021
GBP'000 GBP'000
-------------------------------------- ------------------- -------------
Loan issued ( balance , Including %%) 291 276
Six months
Six months ended 30 ended 30
June 2022 June 2021
Unaudited Unaudited
GBP'000 GBP'000
-------------------------------------- ------------------- -------------
Interest income 7 7-
30 June , 202 2 ,
Unaudited 31 Dec. ,2021
GBP'000 GBP'000
------------------------------------------ ----------------------------- ----------------
Loan receive d ( balance , Including %%) 545 501
Six months ended
Six months ended 30 June 2022 30 June 2021
Unaudited Unaudited
GBP'000 GBP'000
----------------------------------------- ----------------------------- ----------------
Interest expense 28 45
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END
IR FVLFFXFLXBBQ
(END) Dow Jones Newswires
January 18, 2023 08:00 ET (13:00 GMT)
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