TIDMTRU TIDMTRU
RNS Number : 2979N
TruFin PLC
29 September 2021
29 September 2021
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries
"TruFin Group" or the "Group")
INTERIM FINANCIAL REPORT FOR THE SIX MONTHSED 30 JUNE 2021
(UNAUDITED)
-- Combined gross revenue for the Group increased 18% to GBP4.9m
(H1 2020: GBP4.2m). H1 2020 benefited from interest income from
Distribution Finance Capital Ltd ("DFC"). Excluding this income, H1
2021 gross revenue rose by 28% over H1 2020
-- Gross revenue at Playstack Ltd ("Playstack") increased 79% to
GBP2.2m (H1 2020: GBP1.2m)
-- Gross revenue at Oxygen Finance Group Limited (together with
its subsidiaries, Oxygen Finance Limited, Oxygen Finance Americas
Inc. and Porge Limited) ("Oxygen") increased by 6% to GBP1.8m (H1
2020: GBP1.7m)
-- Gross interest income and fee income at Satago Financial
Solutions Limited's ("Satago") core invoice financing division was
GBP0.3m (H1 2020: GBP0.4m) as Satago focused on
Lending-as-a-Service ("LaaS") solutions with Lloyds Bank plc
("Lloyds Bank" or the "Bank") and other potential strategic
partners
-- Gross interest income and fee income at Vertus Capital
Limited ("Vertus") increased 26% to GBP0.6m (H1 2020: GBP0.5m)
-- TruFin Group's loss before tax improved to GBP5.2m (H1 2020:
GBP5.5m)
6 months to 6 months to 6 months to
30 June 30 June 31 December
2021 2020 2020
Financials and KPIs (Unaudited) GBP'000 GBP'000 GBP'000
Gross Revenue 4,941 4,191 10,641
Loss before tax (5,173) (5,459) (3,468)
Loss before tax includes:
share--based payment charge (70) (273) (272)
Net Assets 34,655 45,198 39,736*
*Audited figures
Post period end developments and outlook
-- Playstack signed two further contracts with global technology
platforms during September 2021, underpinning the company's
confidence in its gaming IP and go-to-market strategy. Playstack's
new brand offering introducing real world brands into the gaming
space, is expected to launch in Q4 2021.
-- Oxygen's Q3 2021 revenue is expected to be 20% ahead of the
same period in 2020. Having maintained consecutive positive
quarterly EBITDA throughout 2021, Oxygen will post its first cash
flow positive month during 2021.
-- Alongside positive momentum with its existing trial partner,
Lloyds Bank, Satago is in discussions with several other
potentially significant partners.
-- After a GBP0.5m capital injection into Vertus by TruFin and
another existing shareholder, Vertus has successfully renegotiated
the terms of its collaboration with IntegraFin Holdings plc
("IntegraFin") and renewed terms of finance with the high street
bank it partners with. These multi-year renewals are expected to
position Vertus for meaningful growth in profitability in the
coming years.
James van den Bergh, Chief Executive Officer commented:
"Notwithstanding the challenges posed by the pandemic, I am
pleased with the Group's progress. TruFin invests at the early
stage of a company's life cycle, guiding the company towards
sustainable growth, profitability and ultimately an exit. As such,
it is pleasing to report that during 2021 both Oxygen and Vertus
will record their first cash generative months. This underscores
the Group's strategy and supports the Board's decision not to
divest either of these subsidiaries earlier in the year.
Alongside Satago's trial with Lloyds Bank, which continues
apace, management continue to work on further potentially
significant strategic partnerships.
Given the progress made at every level of the Group we believe
there remains significant scope for value creation in the near and
medium term and I look forward to updating shareholders on our
continued progress before year end.
With a significantly reconstituted institutional shareholder
base and meaningful progress across all the subsidiaries, we can
look to the future with confidence."
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 (NOMAD and Broker)
Chris Clarke
Louis Davies 0203 100 2000
About TruFin plc:
TruFin plc is the holding company for an operating group of
companies that are niche lenders and early payment providers.
TruFin Group combines the benefits of both the traditional
relationship banking model and developments in the fintech sector.
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
The information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No.596/2014. By the publication of
this Announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain. The
person responsible for arranging for the release of this
Announcement on behalf of the Company is Annie Styler.
Chief Executive's Statement
The subsidiaries within the TruFin Group have been resilient in
the first six months of 2021 and the board remains confident
regarding prospects for the remainder of 2021.
As at 31 August 2021, the following assets were not less
than:
-- GBP9.0m of cash or cash equivalents
-- GBP0.6m of assets within the Satago Group's loan book
-- GBP2.3m share of net assets in Vertus Capital Limited
The TruFin Group has no more than GBP3.5m in near-term
liabilities.
Playstack
Playstack is a gaming technology business providing publishing
and financing services to the mobile game and console sector.
Playstack, as previously announced, was the Group's entry point
into the highly attractive growth market of mobile game lending and
is a niche player in the gaming ecosystem.
Playstack experienced significant growth during 2020, driven by
the successful launch of its console game Mortal Shell. During
September 2021, Playstack signed two further deals with global
technology partners, underpinning its confidence for full year
2021.
In addition, Playstack continues to develop its own innovative
technology that increases the revenue generating potential of its
game portfolio. The official launch of this technology has been
delayed, due to the lack of in-person events and brands initially
retrenching their marketing spend, focusing instead on existing
channels; we now expect to launch the platform by the year end.
Oxygen
Through progressive payment practices, big data and expertise,
Oxygen allows public sector and private organisations to trade more
effectively. Payments become frictionless and data becomes
information, driving growth and efficiency, resulting in better
social and economic outcomes.
During the first half of 2021, Oxygen's gross revenues increased
by 6%, although we do not believe this fully reflects the progress
made during the period. As Covid-19 compensation payments rolled
off late in 2020, Oxygen was exposed to a short term lull in demand
as some clients took longer to return to normal. Oxygen has always
believed that strong long-term relationships trump short term gains
and has worked constructively with its clients to ensure the early
payment programmes were rapidly re-activated and returned to
pre-pandemic levels.
Oxygen has maintained its quarterly EBITDA profitability record
since Q4 2020 and will record its first cash flow positive month
during 2021. Given the long-term contracts and the period taken for
contracts to produce meaningful revenues, we expect Oxygen to
continue to increase its profitability in the coming years
benefiting from operational gearing. The board believes that Oxygen
is becoming an increasingly attractive asset uniquely positioned
within its sector.
Oxygen's clients' total procurement spend increased to GBP22.5bn
as at 30 June 2021 (30 June 2020: GBP21.6bn), whilst the transacted
spend eligible for discounts to be applied on the Oxygen platform
rose to GBP315m, an increase of 24% over the prior year. This
equates to an addition of approximately GBP25m each month to client
programmes, significantly outperforming previous years. Total
suppliers onboarded rose by 130 during the first half of 2021
increasing to 3,252 as at 30 June 2021. With an ever-growing client
base this trend is expected to continue and is the direct driver of
revenue from Early Payment Programmes.
Oxygen's FreePay product continues to gather momentum, providing
councils with the ability to pay local, small and micro suppliers
early without charge. Over 2,000 suppliers now benefit from this
unique working capital benefit. FreePay is viewed by management and
clients alike as crucial support to the local economies within the
UK and contributes directly to the social value agendas of Oxygen's
clients.
The appetite for solutions continues to grow, despite the impact
of delayed decisions due to the Covid-19 pandemic and local
elections, as evidenced by new client wins for Oxygen in the first
half of 2021. As at the end of June 2021, Oxygen had 52 early
payment clients (and 108 unique clients versus 92 at the same stage
in 2020) and has maintained its 100% renewal record for early
payment clients. The pipeline of new prospects continues to remain
strong.
Oxygen dominates its niche market and despite the distraction
Oxygen endured during the sales process in the first half of 2021,
it has achieved monthly profitability ahead of schedule.
Satago
Satago offers its customers a technically advanced invoice
finance and cashflow management system via its online software
platform. As reported during 2020, its core lending has been
impacted by the Covid-19 pandemic, through both the decreased
trading activities of its client base and disruption in the lending
market caused by the Government backed lending schemes.
As a result of these measures, coupled with Satago's strategy of
focusing on the LaaS solutions, revenues from its invoice finance
offering declined in the first half.
Satago's trial with Lloyds Bank, announced in December 2020, was
extended during June 2021 and we will update shareholders before
the year end as to the conclusion of the trial. As part of the
partnership, Satago is developing further integrations with the
Bank's infrastructure, driving additional reach throughout the
Bank's regional sales network.
As the demand for LaaS solutions grows, Satago will continue to
lend from its own balance sheet. However, discussions with
strategic partners have highlighted significant appetite from these
organisations to lend from their own balance sheets. As a result,
going forward, Satago will operate a hybrid model of both 'own
balance sheet financing' and 'partner balance sheet financing' in
line with its new focus on LaaS solutions and an embedded finance
model.
As previously outlined, Satago is in discussions with a number
of other potential strategic partners which could, if successful,
result in additional growth for the business.
Vertus
Vertus provides succession finance for the IFA space through its
collaboration with IntegraFin. This is a scalable niche lending
space as more Financial Planners are expected to retire in the
coming years, leading to further consolidation in the advice
market. Vertus ensures that planning firms can remain independent
and offer their clients quality and bespoke advice throughout a
succession process.
The loan book has performed exceptionally well throughout 2020
and 2021, with no credit losses since inception (August 2016). We
anticipate Vertus' loan book growth will remain strong into year
end and the renegotiation of Vertus' collaboration with IntegraFin
and its financing agreement with a high street bank will solidify
Vertus' position in the market and improve future
profitability.
We expect that Vertus will be profitable on a monthly basis
during 2021 and that with the successful conclusion of a GBP0.5m
capital increase, in which TruFin participated, the capital base
for Vertus is now in place to enable further growth and
profitability. Vertus is now targeting a loan book of GBP22m by the
end of Q1 2022 (from GBP12m as at 31 December 2020) and has a
three-year loan book target of GBP50m.
Covid-19 pandemic impact update
In relation to the Covid-19 pandemic, the safety of our
employees was, and is, of paramount importance. The Company ensured
it gave continuous support to employees around flexible working,
wellbeing issues and other concerns and all the subsidiaries are
now looking at how best to work on an ongoing basis.
It is important to note the impact the Covid-19 pandemic has had
on the Group, specifically:
-- Vertus has seen their deal cycle extend due to slower
regulatory processing times (specifically FCA approvals for change
of control).
-- Similar to 2020, Satago's subscription software sales
flattened during the first half of 2021. However, due to a strong
pipeline and distribution deals with large partners, management is
confident of future growth.
-- Oxygen's predominantly public sector client base absorbed
much of the frontline challenges associated with the Covid-19
pandemic and, whilst spending associated with social care
increased, other planned spend, such as construction, was
reduced.
-- Clients gave priority to supporting their local communities
by accelerating payments to their own supply chains in line with
government guidance. Some of Oxygen's clients temporarily suspended
discounts for a period, with Oxygen compensated for this change.
Transacted spend eligible for discounts has now recovered to
pre-Covid-19 pandemic levels.
-- The pandemic has impacted the growth of Playstack's brand
division as clients retrenched their marketing spend and focused it
on existing channels. However, Playstack is excited by the
opportunity and looks forward to showcasing the technology to
shareholders in due course, with a formal launch expected by year
end.
TruFin has maintained an excellent dialogue with Arrowgrass
Master Fund Limited since they sold 53.83% of the Company in
February 2021 and the Board continue to focus on maximising value
for all shareholders.
The Board looks to the future with confidence and will keep
shareholders updated on the Company's progress.
UNAUDITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
Notes 30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
======================================== ====== ================== ================== ================
Interest income 3 813 1,201 2,578
Fee income 3 1,899 1,743 3,846
Publishing income 3 2,229 1,247 8,408
Interest, fee and publishing expenses (2,196) (1,332) (6,512)
------------------ ------------------ ----------------
Net revenue 2,745 2,859 8,320
================== ================== ================
Staff costs 5 (5,766) (6,180) (11,532)
Other operating expenses (1,762) (1,771) (4,927)
Depreciation & amortisation (389) (379) (799)
Net impairment (loss)/gain on financial
assets (1) 12 11
------------------ ------------------ ----------------
Operating loss (5,173) (5,459) (8,927)
------------------ ------------------ ----------------
Loss before tax (5,173) (5,459) (8,927)
================== ================== ================
Taxation 9 (20) (1) (2,476)
------------------ ------------------ ----------------
Loss for the year (5,193) (5,460) (11,403)
================== ================== ================
Other comprehensive income
Items that may be reclassified subsequently
to profit and loss
Exchange differences on translating
foreign operations 21 (166) 85
Other comprehensive income for the
period/year, net of tax 21 (166) 85
================== ================== ================
Total comprehensive loss for the
period/year (5,172) (5,626) (11,318)
================== ================== ================
Loss after tax attributable to:
Owners of TruFin plc (5,033) (5,242) (10,971)
Non-controlling interests (160) (218) (432)
------------------ ------------------ ----------------
(5,193) (5,460) (11,403)
================== ================== ================
Total comprehensive loss for the
period/year attributable to:
Owners of TruFin plc (5,013) (5,408) (10,886)
Non-controlling interests (159) (218) (432)
(5,172) (5,626) (11,318)
================== ================== ================
Earnings per share 6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
Notes 30 June 2021 (Unaudited) (Audited)
(Unaudited) pence pence
pence
====================== ====== ================== ================== ================
Basic and Diluted EPS 15 (6.2) (6.5) (13.6)
Adjusted EPS 15 (6.1) (6.1) (12.9)
UNAUDITED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at As at 31
Notes 30 June 2021 December 2020
GBP'000 GBP'000
(Unaudited) (Audited)
================================= ====== =================== ==============
Assets
Non-current assets
Intangible assets 10 21,324 21,041
Property, plant and equipment 11 100 140
Deferred tax asset 9 27 43
Loans and advances 12 12,047 9,301
------------------- --------------
Total non-current assets 33,498 30,525
=================== ==============
Current assets
Cash and cash equivalents 12,211 17,728
Loans and advances 12 2,829 5,359
Trade receivables 1,209 1,992
Other receivables 1,892 1,962
------------------- --------------
Total current assets 18,141 27,041
=================== ==============
Total assets 51,639 57,566
=================== ==============
Equity and liabilities
Equity
Issued share capital 13 73,548 73,548
Retained earnings (15,689) (10,730)
Foreign exchange reserve 65 45
Other reserves (24,393) (24,395)
------------------- --------------
Equity attributable to owners of
the company 33,531 38,468
------------------- --------------
Non-controlling interest 1,124 1,268
------------------- --------------
Total equity 34,655 39,736
=================== ==============
Liabilities
Non-current liabilities
Borrowings 14 9,916 8,507
------------------- --------------
Total non-current liabilities 9,916 8,507
=================== ==============
Current liabilities
Borrowings 14 2,146 2,204
Trade and other payables 4,922 7,119
Total current liabilities 7,068 9,323
------------------- ==============
Total liabilities 16,984 17,830
=================== ==============
Total equity and liabilities 51,639 57,566
=================== ==============
The financial statements were approved by the Board of Directors
on 28 September 2021 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
2021 73,548 (10,730) 45 (24,395) 38,468 1,268 39,736
Loss for the period - (5,033) - - (5,033) (160) (5,193)
Other comprehensive
income for the
period - - 20 - 20 1 21
Total comprehensive
loss for the period - (5,033) 20 - (5,013) (159) (5,172)
-------- --------- --------- --------- -------- ------------ --------
Share-based payment - 70 - - 70 - 70
Adjustment arising
from change in
change in non-controlling
interest - 4 - - 4 (4) -
Issuance of subsidiary
shares to employees - - - - - 19 19
Intragroup transfer
of subsidiary - - - 2 2 - 2
Balance at 30
June 2021 (Unaudited) 73,548 (15,689) 65 (24,393) 33,531 1,124 34,655
======== ========= ========= ========= ======== ============ ========
Balance at 1 January
2020 73,548 (63) (40) (24,395) 49,050 1,293 50,343
Loss for the period - (5,242) - - (5,242) (218) (5,460)
Other comprehensive
income for the
period - - (166) - (166) - (166)
------
Total comprehensive
loss for the period - (5,242) (166) - (5,408) (218) (5,626)
------ ------- ----- -------- ------- ----- -------
Share-based payment - 273 - - 273 - 273
Issuance of subsidiary
shares to employees - (289) - - (289) 455 166
Balance at 30
June 2020 (Unaudited) 73,548 (5,321) (206) (24,395) 43,626 1,530 45,156
====== ======= ===== ======== ======= ===== =======
UNAUDITED CONDENSED INTERIM STATEMENT OF CASH FLOWS
6 months 6 months Year ended
ended ended 30 31 December
June 2020 2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
============================================= ============================ ============ ============
Cash flows from operating activities
Loss before income tax (5,173) (5,459) (8,927)
Adjustments for
Depreciation of property, plant and
equipment 47 74 128
Amortisation of intangible fixed assets 646 577 1,209
Share-based payments 70 273 545
Increase in provision - - (700)
Finance costs 310 226 412
Impairment of intangible assets - - 222
Loss on disposal of fixed assets 2 - -
Loss on intragroup transfer of subsidiary 2 - -
(4,096) (4,309) (7,111)
Working capital adjustments
Movements in loans and advances (215) 6,708 13,045
Decrease /(increase) in trade and other
receivables 870 421 30
(Decrease)/increase in trade and other
payables (2,185) (371) 2,384
(1,530) 6,758 15,459
Tax paid (15) - (17)
Interest and finance costs paid (280) (160) (276)
---------------------------- ------------ ------------
Net cash (used in)/generated from operating
activities (5,921) 2,289 8,055
============================ ============ ============
Cash flows from investing activities:
Additions to intangible assets (935) (874) (1,905)
Additions to property, plant and equipment (10) (13) (31)
Net cash used in investing activities (945) (887) (1,936)
Cash flows from financing activities:
Issue of ordinary share capital of
subsidiary - 166 166
New borrowings 1,347 1,961 4,382
Net cash generated from financing activities 1,347 2,127 4,548
---------------------------- ------------ ------------
Net (decrease)/increase in cash and
cash equivalents (5,519) 3,529 10,667
---------------------------- ------------ ------------
Cash and cash equivalents at beginning
of the period/year 17,728 6,971 6,971
Effect of foreign exchange rate changes 2 (168) 90
---------------------------- ------------ ------------
Cash and cash equivalents at end of
the period/year 12,211 10,332 17,728
============================ ============ ============
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
('IFRS') as adopted by the United Kingdom.
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 2020.
The condensed set of financial statements included in this
Interim Financial Report for the six months ended 30 June 2021
should be read in conjunction with the annual audited financial
statements of TruFin plc for the year ended 31 December 2020, 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, Oxygen
Finance Americas Inc. and Porge Ltd (the activities of which were
hived up into Oxygen Finance Limited in 2020), 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, Playtest Ltd
(dissolved 24 March 2020), Playstack Inc and Playignite Inc,
together the ("Playstack Group").
Additionally, the Playstack Group also includes four associate
companies incorporated in the UK which have been accounted for
using the equity method. These are;
-- A 49% interest in PlayFinder Games Ltd,
-- A 49% interest in Snackbox Games Ltd,
-- A 42% interest in Military Games International Ltd, and
-- A 26% interest in Stormchaser Games Ltd.
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 2020.
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 2021 is available
at the Company's registered office and on the Company's investor
relations website ( www.trufin.com ).
3. Gross revenue
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
======================== ============================= ============== ============
Interest income 813 1,201 2,578
----------------------------- -------------- ------------
Total interest income 813 1,201 2,578
----------------------------- -------------- ------------
EPPS* contracts 1,146 1,224 2,243
Consultancy fees 131 26 288
Implementation fees 26 - 301
Subscription fees 596 493 1,014
----------------------------- -------------- ------------
Total fee income 1,899 1,743 3,846
----------------------------- -------------- ------------
IAP revenue 200 224 410
Advertising revenue 139 223 410
Console revenue 1,880 733 7,500
Brand revenue 10 67 88
----------------------------- -------------- ------------
Total publishing income 2,229 1,247 8,408
----------------------------- -------------- ------------
Gross revenue 4,941 4,191 14,832
============================= ============== ============
*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 discounting 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 services
finance
6 months ended 30 June 2021 GBP'000 GBP'000 Publishing Other Total
(Unaudited) GBP'000 GBP'000 GBP'000
============================= ========== ================ =========== ===================== ============
Gross revenue 896 1,816 2,229 - 4,941
Cost of sales (424) (305) (1,467) - (2,196)
---------- ---------------- ----------- --------------------- ------------
Net revenue 472 1,511 762 - 2,745
---------- ---------------- ----------- --------------------- ------------
Adjusted operating loss* (1,993) (443) (1,463) (1,204) (5,103)
Loss before tax (1,993) (443) (1,463) (1,274) (5,173)
Taxation (17) - (3) - (20)
Loss for the period (2,010) (443) (1,466) (1,274) (5,193)
========== ================ =========== ===================== ============
Total assets 21,894 7,267 15,001 7,477 51,639
Total liabilities (12,505) (1,649) (2,254) (576) (16,984)
---------- ---------------- ----------- --------------------- ------------
Net assets 9,389 5,618 12,747 6,901 34,655
---------- ---------------- ----------- --------------------- ------------
*adjusted operating loss excludes share-based payment
expense
Short term Payment services
finance
6 months ended 30 June 2020 GBP'000 GBP'000 Publishing Other Total
(Unaudited) GBP'000 GBP'000 GBP'000
============================= ========== ================ =========== ===================== ============
Gross revenue 907 1,711 1,247 326 4,191
Cost of sales (340) (271) (721) - (1,332)
---------- ---------------- ----------- --------------------- ------------
Net revenue 567 1,440 526 326 2,859
---------- ---------------- ----------- --------------------- ------------
Adjusted operating loss* (1,983) (322) (1,732) (1,149) (5,186)
Loss before tax (1,983) (322) (1,732) (1,422) (5,459)
Taxation (1) - - - (1)
Loss for the period (1,984) (322) (1,732) (1,422) (5,460)
========== ================ =========== ===================== ============
Total assets 20,328 9,846 15,665 12,605 58,444
Total liabilities (8,767) (1,714) (1,233) (1,532) (13,246)
---------- ---------------- ----------- --------------------- ------------
Net assets 11,561 8,132 14,432 11,073 45,198
---------- ---------------- ----------- --------------------- ------------
*adjusted operating loss excludes share-based payment
expense
Short term Payment services
finance
Year ended 31 December 2020 GBP'000 GBP'000 Publishing Other Total
(Audited) GBP'000 GBP'000 GBP'000
============================= ========== ================ =========== ===================== ============
Gross revenue 2,020 3,490 8,408 914 14,832
Cost of sales (730) (760) (5,022) - (6,512)
---------- ---------------- ----------- --------------------- ------------
Net revenue 1,290 2,730 3,386 914 8,320
---------- ---------------- ----------- --------------------- ------------
Adjusted operating loss* (3,318) (1,111) (2,458) (1,495) (8,382)
Loss before tax (3,318) (1,111) (2,458) (2,040) (8,927)
Taxation 42 (2,504) (14) - 2,476
Loss for the period (3,276) (3,615) (2,472) (2,040) (11,403)
========== ================ =========== ===================== ============
Total assets 22,7988 7,430 17.765 9,573 57,566
Total liabilities (1,276) (1,858) (3,559) (1,137) (17,830)
---------- ---------------- ----------- --------------------- ------------
Net assets 11,522 5,572 14,206 8,436 39,736
---------- ---------------- ----------- --------------------- ------------
*adjusted operating loss excludes share-based payment
expense
5. Staff costs
Analysis of staff costs:
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
============================================== ============================= ============== ============
Wages and salaries 4,609 4,885 9,311
Consulting costs 183 166 313
Social security costs 703 637 1,019
Pension costs arising on defined contribution
schemes 223 219 442
Share-based payment 70 273 545
Government grants (22) - (98)
----------------------------- -------------- ------------
5,766 6,180 11,532
============================= ============== ============
Consulting costs are recognised within staff costs where the
work performed would otherwise have been performed by employees.
Consulting costs arising from the performance of other services are
included within other operating expenses.
Average monthly number of persons (including Executive
Directors) employed:
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
================== ================== ============== ============
Management 16 19 17
Finance 7 8 8
Sales & marketing 32 30 33
Operations 54 39 37
Technology 43 64 54
------------------ -------------- ------------
152 160 149
================== ============== ============
Directors' emoluments
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
====================== ================== ============== ============
Combined remuneration 370 425 1,032
6. Employee share-based payment transactions
The employment share-based payment charge comprises:
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
======================================= ================== ============== ============
Performance Share Plan and Joint Share
Ownership Plan Founder Award 59 233 465
Performance Share Plan Market Value
Award 11 40 80
Performance Share Plan 2019 Award - - -
Performance Share Plan 2018 Award - - -
Total 70 273 545
================== ============== ============
Performance Share Plan and Joint Share Ownership Plan Founder
Award ("PSP and JSOP")
On 21 February 2018, 3,407,895 shares were granted to selected
founder members of senior management of which the share price at
date of grant was GBP1.90 per share. The awards are structured as a
Performance Share Plan and a Joint Share Ownership Plan. The
Performance Share Plan is structured as a nil cost option with no
performance conditions attached. The awards were also granted
subject to continued employment until February 2021. The Joint
Share Ownership Plan allows the employee to participate in the
growth in value over and above the grant price of GBP1.90. The
shares vest 25% on each anniversary of the grant date.
The first 25% of shares (851,973 shares) vested on 21 February
2019 when the share price was GBP1.98. As a result 817,550 shares
subject to the Joint Share Ownership Plan became fully owned by the
trustee of the Company's employee benefit trust (the "EBT") and
34,423 became fully owned by senior management.
At the time of Distribution Finance Capital Ltd's ("DFC's")
demerger from the Group, there was a modification to the Founder
Award. The GBP1.90 price above which the employee was able to
participate in value growth under the Joint Share Ownership Plan
was adjusted proportionally by reference to the respective share
prices of DFC and TruFin to GBP0.85. This 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.
As part of the demerger, holders of Founder Awards also received
an award in respect of DFC shares which gave rise to an employer's
National Insurance liability of GBP419,000, which was paid in July
2019.
On 11 September 2019, in connection with his change of role, the
unvested Founder Awards in respect of 1,369,244 shares held by
Henry Kenner fully vested, the result of which was that all of the
relevant shares ceased to be subject to the Joint Share Ownership
Plan and instead become fully owned by the EBT. In addition,
1,369,244 shares subject to the Performance Share Plan ceased to be
subject to continued employment condition.
The second 25% of Founder Awards held by James van den Bergh
vested on 21 February 2020 when the share price was GBP0.26. As a
result, 395,560 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.
On 27 November 2020, Henry Kenner exercised his nil cost option
under the Performance Share Plan which resulted in 1,807,217 shares
being transferred from the EBT to Henry Kenner on 22 December 2020.
This gave rise to an Employer's National Insurance liability of
GBP82,000 which was paid in January 2021.
The third 25% of Founder Awards held by James van den Bergh
vested on 21 February 2021 when the share price was GBP0.78. As a
result, 395,560 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.
The grant of the DFC Market Value Award gave rise to an
employer's National Insurance liability for the Company of
GBP265,000 which was paid in July 2019.
Performance Share Plan 2018 Award ("PSP 2018")
On 21 February 2018, options to acquire 1,000,001 shares were
granted to the senior management team. The PSP 2018 Award is
structured as a nil cost option. The vesting of this award is
subject to the holder being in continued employment until February
2021 and the subsidiary companies achieving certain financial
metrics over a three--year period.
In order to reflect the impact of the demerger, and as the
performance condition relating to the business of DFC was deemed to
be achieved in full due to the demerger, the PSP 2018 Award was
adjusted as follows:
-- the award part vested and was satisfied by way of a cash
payment calculated by reference to 50% of the shares subject to the
award and a price of GBP1.90 per share. The cash payments were made
in September 2019; and
-- the awards have otherwise continued in respect of 100% of the
TruFin plc shares, but the performance condition now relates solely
to the business of the Oxygen Group.
In 2019, PSP 2018 Awards in respect of 736,843 shares lapsed
following members of senior management leaving the Group and
changing roles.
The remaining performance condition of this award has not been
met and as such no charge has been recognised (2020: GBPnil).
Performance Share Plan 2019 Award ("PSP 2019")
On 11 September 2019 an option to acquire 320,000 shares was
granted to James van den Bergh. The PSP 2019 Award is structured as
a nil cost option. The vesting of this award is subject to the
holder being in continued employment until September 2022 and
subsidiary companies achieving certain financial metrics over a
three--year period. It is highly improbable that the vesting
conditions will be met and as such there has been no charge in the
period (2020: GBPnil).
7. Issuance of subsidiary shares to employees
On 6 May 2021, 32,500 unallocated B ordinary shares in Oxygen
Finance Group Limited ("OFGL") were allocated to key Oxygen staff
as part of its Management Incentive Plan ("Oxygen MIP"). To date
115,000 B ordinary shares have been issued to Oxygen staff, which
is 11.6% of the issued and fully authorised share capital of
OFGL.
On 9 March 2020, Satago Financial Solutions Limited ("SFSL")
implemented its Management Incentive Plan ("Satago MIP"). Under the
Satago MIP key Satago managers were given the opportunity to
acquire new created ordinary shares in the capital of SFSL. 20%
(750,000 ordinary shares) of the fully diluted share capital has
been made available under the Satago MIP, and, to date, 590,625
ordinary shares have been issued to Satago managers.
8. Loss before income tax
Loss before income tax is stated after charging:
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
==================================== ============================= ============== ============
Depreciation of property, plant and
equipment 47 74 128
Amortisation of intangible assets 646 577 1,209
Staff costs including share-based
payments charge 5,766 6,180 11,532
Audit fees payable to the Group's
auditor 127 61 127
Non-audit fees payable to Group's
auditor 12 12 12
9. Taxation
Analysis of tax charge recognised in the period/year
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
==================== ============================= ============== ============
Current tax charge 4 1 16
Deferred tax charge 16 - 2,460
----------------------------- -------------- ------------
Total tax charge 20 1 2,476
============================= ============== ============
Deferred tax asset
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
======================================== ============================= ============== ============
Balance at start of the period/year 43 2,503 2,503
Debit to the statement of comprehensive
income (16) - (2,460)
----------------------------- -------------- ------------
Balance at end of the period/year 27 2,503 43
============================= ============== ============
Comprised of:
Losses 27 2,503 43
----------------------------- -------------- ------------
Total deferred tax asset 27 2,503 43
============================= ============== ============
A deferred tax asset was recognised in the prior year in respect
of Vertus Capital SPV 1 Limited, as it became profitable.
In the prior year, the deferred tax asset in respect of Oxygen
was derecognised.
10. Intangible assets
Client contracts Software Separately
licences identifiable
and similar intangible Goodwill Total
assets assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================ ================== ================ ============= ========== =======
Cost
At 1 January 2021 4,689 1,834 1,642 15,796 23,961
Additions 542 393 - - 935
Exchange differences (1) (6) - - (7)
-------------
At 30 June 2021 (unaudited) 5,230 2,221 1,642 15,796 24,889
================== ================ ============= ========== =======
Amortisation
At 1 January 2021 (956) (814) (742) - (2,512)
Charge (305) (177) (164) - (646)
Exchange differences - 1 - - 1
At 30 June 2021 (unaudited) (1,261) (990) (906) - (3,157)
================== ================ ============= ========== =======
Accumulated impairment
losses
At 1 January 2021 (408) - - - (408)
Charge - - - - -
------------------ ---------------- ------------- ---------- -------
At 30 June 2021 (unaudited) (408) - - - (408)
================== ================ ============= ========== =======
Net book value
------------------ ---------------- ------------- ---------- -------
At 30 June 2021 (unaudited) 3,561 1,231 736 15,796 21,324
------------------ ---------------- ------------- ---------- -------
At 31 December 2020 3,325 1,020 900 15,796 21,041
================== ================ ============= ========== =======
Client contracts Software Separately
licences identifiable
and similar intangible Goodwill Total
assets assets
Audited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=============== ================== ================== ============= ================== ==================
Cost
At 1 January
2020 3,574 1,109 1,642 15,796 22,121
Additions 1,180 725 - - 1,905
Disposals (61) - - - (61)
Exchange
differences (4) - - - (4)
-------------
At 31 December
2020 4,689 1,834 1,642 15,796 23,961
================== ================== ============= ================== ==================
Amortisation
At 1 January
2020 (479) (471) (414) - (1,364)
Charge (538) (343) (328) - (1,209)
Disposals 61 - - - 61
-------------
At 31 December
2020 (956) (814) (742) - (2,512)
================== ================== ============= ================== ==================
Accumulated
impairment
losses
At 1 January
2020 (186) - - - (186)
Charge (222) - - - (222)
------------------ ------------------ ------------- ------------------ ------------------
At 31 December
2020 (408) - - - (408)
================== ================== ============= ================== ==================
Net book value
------------------ ------------------ ------------- ------------------ ------------------
At 31 December
2020 3,325 1,020 900 15,796 21,041
================== ================== ============= ================== ==================
At 31 December
2019 2,909 638 1,228 15,796 20,571
================== ================== ============= ================== ==================
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 (or "set up") 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.
11. Property, plant and equipment
Fixtures Computer Right of Use
& fittings equipment Asset Total
GBP'000 GBP'000 GBP'000 GBP'000
===================== =========== =========== ============ =======
Cost
At 1 January 2021 52 60 429 541
Additions 1 9 - 10
Disposals - (4) - (4)
Exchange differences (1) - - (1)
At 30 June 2021
(Unaudited) 52 65 429 546
----------- ----------- ------------ -------
Depreciation
At 1 January 2021 (36) (26) (339) (401)
Charge (4) (9) (34) (47)
Disposals - 2 - 2
At 30 June 2021 (40) (33) (373) (446)
(Unaudited)
----------- ----------- ------------ -------
Net book value
----------- ----------- ------------ -------
At 30 June 2021 12 32 56 100
(Unaudited)
=========== =========== ============ =======
At 31 December
2020 16 34 90 140
=========== =========== ============ =======
Leasehold Fixtures Computer Right of Use
improvements & fittings equipment Asset Total
Audited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== ============= =========== =========== ============ =======
Cost
At 1 January 2020 44 247 36 429 756
Additions - 7 24 - 31
Disposals (44) (202) - - (246)
At 31 December
2020 - 52 60 429 541
------------- ----------- ----------- ------------ -------
Depreciation
At 1 January 2020 (36) (219) (9) (255) (519)
Charge (8) (19) (17) (84) (128)
Disposals 44 202 - - 246
At 31 December
2020 - (36) (26) (339) (401)
------------- ----------- ----------- ------------ -------
Net book value
------------- ----------- ----------- ------------ -------
At 31 December
2020 - 16 34 90 140
============= =========== =========== ============ =======
At 31 December
2019 8 28 27 174 237
============= =========== =========== ============ =======
12. Loans and advances
30 June 2021 31 December
2020
(Unaudited) (Audited)
GBP'000 GBP'000
========================= ============ ===========
Total loans and advances 14,884 14,670
Less: loss allowance (8) (10)
14,876 14,660
============ ===========
Past due receivables relating to loans and advances are analysed
as follows:
30 June 2021 31 December
2020
(Unaudited) (Audited)
GBP'000 GBP'000
============================== ============ ===========
Neither past due nor impaired 14,874 14,401
Past due: 0-30 days 2 254
Past due: 31-60 days - 2
Past due: 61-90 days - -
Past due: more than 91 days - 3
14,876 14,660
============ ===========
The financial risk management procedures disclosed in the 31
December 2020 audited financial statements have been and remain in
place for the period to 30 June 2021.
13. Share capital
Share Capital Total
GBP'000 GBP'000
======================================= =============== =========
80,822,204 shares at GBP0.91 per share
at 30 June 2021 (unaudited) 73,548 73,548
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 2021.
14. Borrowings
30 June 2021 31 December
2020
(Unaudited) (Audited)
GBP'000 GBP'000
=========================== ============= ===========
Loans due within one year 2,146 2,204
Loans due in over one year 9,916 8,507
12,062 10,711
============= ===========
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 2021 10,711
Funding drawdown 2,902
Interest expense 255
Origination fees paid (28)
Fees amortisation 69
Repayments (1,569)
Interest paid (252)
Loan written off (14)
Effect of foreign exchange rate changes (12)
Balance at 30 June 2021 (Unaudited) 12,062
========================
Balance at 1 January 2020 6,194
Funding drawdown 5,840
Interest expense 279
Origination fees paid (2)
Fees amortisation 133
Repayments (1,458)
Interest paid (275)
Balance at 31 December 2020 (Audited) 10,711
========================
15. Earnings per share
Earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period/year.
The calculation of the basis and adjusted earnings per share is
based on the following data:
6 months ended 6 months ended Year ended
30 June 2020 31 December
2020
30 June 2021 (Unaudited) (Audited)
(Unaudited) GBP'000 GBP'000
GBP'000
=============================================== ================ ================= ==============
Number of shares
At period/year end 80,822,204 80,822,204 80,822,204
Weighted average 80,822,204 80,822,204 80,822,204
Earnings attributable to ordinary shareholders GBP'000 GBP'000 GBP'000
Loss after tax attributable to the owners
of TruFin plc (5,033) (5,242) (10,971)
Adjusted earnings attributable to ordinary
shareholders
Loss for the period/year attributable
to the owners of TruFin plc (5,033) (5,242) (10,971)
Adjusted for:
Share-based payment 70 273 545
Adjusted loss after tax attributable
to the owners of TruFin plc (4,963) (4,969) (10,426)
Earnings per share* Pence Pence Pence
Basic and Diluted (6.2) (6.5) (13.6)
Adjusted(1) (6.1) (6.1) (12.9)
* All Earnings per share figures are undiluted and diluted.
Adjusted(1) EPS excludes share-based payment expense,
exceptional items and discontinued operations from loss after
tax
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.
16. Related party disclosures
Transactions with directors
Key management personnel disclosures are provided in notes 5 and
6.
17. Post balance sheet events
On 13 July 2021 TruFin Holdings invested GBP340,000 in Vertus
Capital Limited as part of a GBP500,000 capital injection with one
other existing shareholder, which increased its ownership
percentage in Vertus Capital Limited from 51% to 54%.
In September, Vertus renegotiated its existing facility
agreement with IntegraFin Holdings plc, increasing it from GBP7.5m
to GBP11.25m and extending the terms of debt to 31 August 2028
(from 31 March 2026).
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END
IR BVLLLFKLEBBZ
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