TIDMTRU TIDMTRU
RNS Number : 7866J
TruFin PLC
29 April 2022
29 April 2022
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries
"TruFin Group" or the "Group")
FINAL RESULTS FOR THE 12 MONTHSED 31 DECEMBER 2021
Full year results highlight the transition to recurring revenue
sources
TruFin is pleased to announce its audited results for the 12
months ended 31 December 2021. TruFin's complete annual report and
accounts, which set out these results in full detail with
accompanying commentary, are now available on TruFin's website:
www.Trufin.com/investors .
Financial Highlights
-- Gross revenues were GBP13.1m for the 12 months ended 31
December 2021, representing a year-on-year decline of 12%, driven
by revenue from the de-emphasised lending strategy declining
35%
-- Loss Before Tax ("LBT") excluding share-based payment charge was GBP8.4m
-- 87% of 2021 revenue came from predictable recurring software and licencing fees
Operational Highlights
-- Oxygen Finance Limited ("Oxygen") recorded its first full year of EBITDA profit (GBP0.5m)
-- Satago Financial Solutions Limited ("Satago") extended its
six-month trial with Lloyds Bank plc ("Lloyds Bank" or the "Bank")
for their Lending-as-a-Service ("LaaS") offering
-- Playstack Limited ("Playstack") beta-launched its brand technology platform in November 2021
-- Vertus Capital Limited ("Vertus") closed GBP8.4m of new
facilities, an increase of 70% over the previous 12 months (2020:
GBP4.9m)
Current Trading and Prospects
-- Group revenues for Q1 2022 were not less than GBP2.5m
(unaudited), flat over the same period in 2021
-- Oxygen recorded revenue growth for Q1 2022 of over 25%, compared to the same period in 2021
-- Satago is seeing meaningful progress, with a growing pipeline
of potential LaaS customers in Europe and the UK
-- Playstack has extended its portfolio by three titles for
release during 2022. It has a strong pipeline of further titles for
2023 and beyond
-- Vertus closed GBP2.8m of new facilities in Q1 2022 and has
GBP8.4m of new facilities approved and submitted for legal
drafting
James van den Bergh, TruFin CEO, said:
"2021 was a transitional year for the TruFin Group. We welcomed
15 new institutional shareholders, repositioned our business to one
which now receives 87% of its revenue from recurring software and
licencing fees and we have significantly enhanced the Group's
prospects by building new and consolidating existing
partnerships.
We saw Group revenue fall as we focused on shifting to these new
sources of predictable revenue, in doing so laying the building
blocks for sustainable growth in 2022 and beyond.
Due to the work carried out during 2021, our significantly
diversified shareholder base and the successfully completed Placing
and Open Offer, we look forward to the current year with optimism
and believe we are well positioned for the future."
Enquiries:
TruFin plc
0203 743
James van den Bergh, Chief Executive Officer 1340
Kam Bansil, Investor Relations 07779 229508
Liberum Capital Limited (Nominated Adviser and
Corporate broker)
Chris Clarke
Edward Thomas
Lydia Zychowska 0203 100 2000
About TruFin plc:
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.
CHAIRMAN'S STATEMENT
When I wrote my Chairman's Statement last year, we had just
experienced a very difficult 12 months. The pandemic was still
causing significant disruption and the outlook was still highly
unpredictable for companies around the world. The Group's various
businesses responded amazingly well to unprecedented challenge, and
I am incredibly proud of our employees who navigated new working
environments and continued to drive the businesses forward.
I wrote last year that the Group was emerging from the pandemic
relatively unscathed and even better placed to prosper. I am
delighted to say that this has indeed been the case and we have
made great strides forward in 2021. Though the pandemic's impact
appears to be waning, we now face other challenges, such as rising
inflation resulting in increased interest rates and, no doubt,
further difficulties caused by the conflict in Ukraine. Despite
such challenges, TruFin is in great shape and I expect to be able
to report considerable growth in all our businesses through
2022.
The Group had three main objectives during 2021. Firstly, the
restructuring of the shareholder base to allow the Group to fully
capitalise on the inherent value it had already created, whilst
ensuring it remains a stable Group for employees, strategic
partners and other stakeholders. This successfully happened via two
oversubscribed sell-downs of our largest shareholder's position -
resulting in TruFin gaining many new, high quality institutional
shareholders.
Secondly, the Group sought to continue the transition from a
lending Group to one focused on recurring software sales and
licencing fees. It is therefore very pleasing to report that during
2021 the Group generated more than 87% of its revenue from these
sources.
Finally, the Group strived continuously to provide exemplary
service to its customers and give our 136 employees the opportunity
to continue the important work they do. As a result of their
efforts, TruFin is better positioned now than it has ever been.
This is no more evident than in the recent signing of a letter of
intent by Lloyds Bank plc ("Lloyds Bank" or the "Bank") and GBP5m
equity investment by Lloyds Banking Group ("LBG") in Satago
Financial Solutions Limited ("Satago") which was only possible
thanks to the collaborative and stellar work carried out by all
parties during 2021.
Highlights throughout 2021 include:
-- Oxygen Finance Limited ("Oxygen") recording its first full
year EBITDA profit
-- Satago extending its trial with Lloyds Bank and developing
further integration with the Bank's infrastructure
-- Playstack Limited's ("Playstack") beta launch of Interact,
their new brand offering which introduces real world brands into
the gaming space
-- Vertus Capital Limited ("Vertus") recording its first year of
profit whilst writing GBP8.4m of new facilities and experiencing
zero credit losses, yet again demonstrating the efficacy of its
underwriting
What is particularly pleasing is how significantly de-risked the
Group now is - both tactically and strategically - as a result of
the work carried out during the last 12 months.
The decision for Oxygen to demonstrate the operational leverage
in the business, whilst maintaining its leading market position,
has resulted in its first full year of EBITDA profit during 2021.
With 2022 expected to deliver the first year of cash generation,
this will end the need for financial support from TruFin.
Satago's focus on its Lending-as-a-Service ("LaaS") launch and
delivering on its strategic partnership with Lloyds Bank has
resulted in the Bank selecting it to provide invoice factoring
solutions to the Bank's customers. Alongside this recent landmark
announcement, it was also very pleasing to report that LBG made a
strategic investment of GBP5m in Satago.
Playstack's successful launch of their first major title has
resulted in the console portfolio being extended by three new
titles for release in 2022, with a strong pipeline of further
titles for 2023 and beyond. The existing back catalogue in mobile
and console, combined with these secured releases and Interact's
launch, ensures a balanced mix of revenue streams going forward for
this exciting gaming technology business.
As ever with Vertus, it has been pleasing to witness such a
robust credit performance and a first full year of
profitability.
TruFin's share price has risen by more than 400% since mid-2020.
This rise, I believe, is a result of the wholesale restructuring in
the shareholder register plus the excellent work done at subsidiary
level. This work, evidenced by demonstrable milestones, now ensures
that the Group's subsidiaries are moving from the 'venture' stage
to greater maturity. This reduces Group volatility whilst
increasing the inherent value of the subsidiaries and the Group's
ability to realise this value.
2022 meanwhile has started with two incredibly positive
developments: Satago's selection as the platform of choice by
Lloyds Bank and an oversubscribed GBP10m Placing and Open Offer.
The fundraise, together with the additional GBP5m invested in
Satago by LBG, positions the Group to accelerate growth and
capitalise on all the work undertaken to date.
I look forward to updating the market on our continued progress
over the course of the year and, as ever, I would like to thank all
our employees and shareholders, new and old, for their continued
support.
Steve Baldwin
Chairman
CEO'S REVIEW
As our Chairman highlighted, 2021 was a pivotal year for TruFin.
With our largest shareholder selling down their 73.82% position (to
15 institutional investors in two oversubscribed transactions) the
Group was effectively re-IPOd.
One of the key objectives for the Group is to create a stable
environment for our subsidiaries. As such it cannot be
underestimated how positively the news of our updated shareholder
structure was received by both employees and customers, alongside
our partners, suppliers and other stakeholders.
In addition, the Group continued to transition its revenue base
away from lending income towards recurring licence fee and software
revenues. Alongside these important strategic goals, the
subsidiaries grew their customer bases, strengthened their
partnerships and positioned themselves for an exciting 2022 and
beyond.
2021 Group Performance
When I became CEO in 2019, the Group's revenue was dominated by
lending income, with just 36% of revenues attributed to recurring
software and licencing fees. One of the Group's strategic
objectives was to reorientate income so that the majority came from
these more predictable sources. With 87% of 2021 revenues coming
from such fees we can say that this transition has occurred
successfully. Our new capital light model positions us perfectly to
generate the high EBITDA margins and return on equity that other
successful software-as-a-service ("SaaS") businesses enjoy.
The shift to recurring software and licencing fees has resulted
in the Group consolidating the significant revenue growth we
experienced in 2020; 2021 saw a modest 12% decline in revenues to
GBP13.1m, driven by lending earnings falling by 35%. With the split
between the various revenue streams now at a sustainable level, we
can look forward to the Group returning to meaningful growth in
2022 and beyond.
The Group ended the year with a cash balance of GBP7.6m
(including cash of GBP4.7m in Satago and GBP0.7 million in Vertus
which cannot be accessed at a Group level) and, following the
GBP10m fundraising post period end, is fully funded to achieve
profitability.
Oxygen
-- Revenue growth in the year and strong cost management
resulted in positive EBITDA generation for each quarter of 2021,
ensuring Oxygen delivered its first full year of EBITDA profit
(GBP0.5m)
-- Oxygen is now fully funded through to profitability and cash
generation and therefore no longer requires financial support from
the Group
-- New business continued to progress well with five new Early
Payment Programme clients and 23 new Insight Solutions clients.
Oxygen lost two Insight clients in the period (one of which
returned during the final quarter 2021) and as a result Oxygen had
120 unique clients at year end
-- Average Early Payment Programme client tenure, as at end of
2021, was 6.2 years. The average length of contract terms and
loyalty of the customer base amplifies the value of the recurring
revenue stream built up within Oxygen
-- Suppliers joined Oxygen's Early Payment Programmes at a
record rate, with a 43% increase in suppliers onboarded versus the
same period in 2020
-- Oxygen processed its 1,000,000(th) rebate in 2021
-- Oxygen successfully positioned itself as a financial
technology company delivering social value. As a result, 2021 saw
dramatic growth in its FreePay Programme, which allows small and
micro suppliers to benefit from early payment without charge, and
the development of a Carbon Reporting tool to provide local
authorities insight into their Scope 3 emissions
Satago
-- 2021 was the first full year of the LaaS proposition with a
focus on developing the offering for Lloyds Bank, culminating in
the March 2022 announcement. The work carried out with both Lloyds
Bank and other potential partners provides the foundation for
significant future growth
-- Satago expanded its product range, with whole book funding
launched during 2021
-- Government backed loans and Covid restrictions reduced demand
for Satago's financing products
-- New financing product providing funding against HMRC R&D
tax credit submissions
-- GBP5m revolving credit agreement signed in March 2020
continues to run well and the agreement remains in force
Playstack
-- Good progress during this transitional year, delivering
financial targets and setting the foundations for growth in 2022
and 2023
-- Back-book games portfolio contributed more than 50% of games
revenue in 2021, with strong catalogue management and platform
partnerships
-- Ongoing investment in Interact, the brand technology
platform, throughout 2021 ensuring a successful beta launch in
November 2021 and public launch in February 2022
Vertus
-- New facilities closed during 2021 increased by 70% to GBP8.4m
(2020: GBP4.9m), resulting in interest income increasing by 33% to
GBP1.3m (2020: GBP1.0m)
-- Active facilities increased from 15 to 21 (inclusive of two
early settlements)
-- Zero missed payments, defaults, or impairments across the
book for the fifth consecutive year
-- Renewal of creditor agreements for a further 36 months, on
improved terms
Current trading and prospects
After a transitional 2021 in which the Group reorientated
towards recurring software and licencing fee income, we expect
significant growth during 2022. Group revenues in the first quarter
of 2022 are expected to be more than GBP2.5m (unaudited), flat
versus revenues during the same period in 2021.
Following the recent oversubscribed Placing and Open Offer, the
Group is focused on delivering considerable growth, profitability
and value crystallisation.
Oxygen
-- Current trading in line with budget expectations for both
Early Payment Programmes and Insight Solutions, with both
delivering cumulative revenue growth for the first quarter of 2022
of over 25%, compared to the same period in 2021
-- Record monthly recurring revenues in March 2022
-- Strong pipeline for both Early Payment Programmes and Insight
Solutions clients with new product development allowing for the
release of the proprietary 'Carbon footprint Insights Solution'.
This new product is generating significant interest and
demonstrates Oxygen's ability to provide further product ranges to
their loyal customer base
-- Record supplier on-boarding of GBP102m in the first quarter
of 2022, representing an increase of 34% over the same period in
2021 and a 120% increase over the fourth quarter of 2021. The
supplier spend in Oxygen's Early Payment Programmes is expected to
reach GBP1bn during 2022
-- Unique client count exceeded 125
Satago
-- The first quarter of 2022 was dominated by continued work
with Lloyds Bank, culminating in confirmation of their intention to
enter into a commercial agreement with Satago
-- A GBP5m equity investment by LBG into Satago ahead of the
signing of the commercial agreement with Lloyds Bank
-- Meaningful progress with a growing pipeline of LaaS customers
in Europe and the UK interested in all or part of its technology
suite
-- Increased activity and demand for Satago's own loan book
offering
Playstack
-- Console portfolio extended by three new titles for release
during 2022, with a strong pipeline of titles for 2023 and
beyond
-- Interact brand technology publicly announced in February
2022, with significant interest from numerous developers and
brands
-- Increased mix of revenue sources for 2022 and beyond,
providing a more balanced mix across the company portfolio and
allowing the business expected to target profitability during
2023
Vertus
-- Ongoing consolidation in the IFA market is fuelling demand
for funding, positioning Vertus well for further growth
-- Lead times for closing facilities increased due to challenges
around FCA change of control processing times. We believe these
delays are temporary
-- New referral agreements and online campaigns are driving
increased applications. The first quarter of 2022 saw GBP2.8m of
new facilities closed and a further GBP8.4m of new facilities
approved and submitted for legal drafting
-- Zero missed payments, defaults or impairments
Outlook
In 2021 we remained focused on our technological advantages.
This allowed us to expand our product offerings to new and existing
customers, the benefits of which we will see in 2022 and beyond.
Similarly, we expect our investments in building lasting
relationships with Lloyds Bank and our other partners to bear fruit
in the coming years.
With each subsidiary delivering on their strategic objectives
and having executed on an oversubscribed Placing and Open Offer,
the Group is now well positioned to focus on continued growth,
moving towards profitability and value creation.
It is with pride that I have seen first-hand how our Board has
acted to protect all shareholders over the last 24 months. We have
received unwavering support from new and existing shareholders who
have given us the time to develop the foundations for continued
growth. Crucially, we have also been trusted by our employees and
partners who have remained loyal despite our competitors attempting
to capitalise on our temporary instability.
So, alongside the habitual 'thank you' to our shareholders I
would like to thank all stakeholders for their support and
encouragement.
We have hit the ground running in 2022 and we look forward to
updating investors on TruFin's progress throughout the year.
James van den Bergh
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes 2021 2020
GBP'000 GBP'000
====================================== ======= ======================== =========
Interest income 3 1,681 2,578
Fee income 3 4,330 3,846
Publishing income 3 7,104 8,408
Interest, fee and publishing expenses (6,214) (6,512)
------------------------ ---------
Net revenue 6,901 8,320
======================== =========
Staff costs 5 (11,285) (11,532)
Other operating expenses (3,257) (4,927)
Depreciation & amortisation (794) (799)
Net impairment reversal on financial
assets 7 10 11
Share of profit from associates 3 -
------------------------ ---------
Loss before tax (8,422) (8,927)
------------------------ ---------
Taxation 2, 9 986 (2,476)
------------------------ ---------
Loss for the year (7,436) (11,403)
======================== =========
Other comprehensive income
Items that may be reclassified subsequently
to profit and loss
Exchange differences on translating
foreign operations (39) 85
Other comprehensive income for the
year, net of tax (39) 85
======================== =========
Total comprehensive loss for the year (7,475) (11,318)
======================== =========
Loss for the year attributable to:
Owners of TruFin plc (7,071) (10,971)
Non-controlling interests (365) (432)
------------------------ ---------
(7,436) (11,403)
======================== =========
Total comprehensive loss for the year
attributable to:
Owners of TruFin plc (7,112) (10,886)
Non-controlling interests (363) (432)
------------------------ ---------
(7,475) (11,318)
======================== =========
COMPANY STATEMENT OF COMPREHENSIVE INCOME
Notes 2021 2020
GBP'000 GBP'000
==================================== ======= ======================== =========
Revenue 3 2,126 2,192
======================== =========
Staff costs 5 (1,911) (1,920)
Other operating expenses (624) (975)
Depreciation & amortisation - (1)
Loss before tax (409) (704)
======================== =========
Taxation 9 - -
------------------------ ---------
Loss and total comprehensive income
for the year (409) (704)
======================== =========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes 2021 2020
GBP'000 GBP'000
================================= ======= ========================= =========
Assets
Non-current assets
Intangible assets 10 21,191 21,041
Property, plant and equipment 11 65 140
Deferred tax asset 9 303 43
Loans and advances 13 11,575 9,301
------------------------- ---------
Total non-current assets 33,134 30,525
========================= =========
Current assets
Cash and cash equivalents 7,608 17,728
Loans and advances 13 4,558 5,359
Interest in associate 3 -
Trade receivables 14 2,585 1,992
Other receivables 14 2,840 1,962
------------------------- ---------
Total current assets 17,594 27,041
========================= =========
Total assets 50,728 57,566
========================= =========
Equity and liabilities
Equity
Issued share capital 15 73,548 73,548
Retained earnings (17,731) (10,730)
Foreign exchange reserve 4 45
Other reserves (24,393) (24,395)
------------------------- ---------
Equity attributable to owners of
the company 31,428 38,468
------------------------- ---------
Non-controlling interest 19 1,023 1,268
------------------------- ---------
Total equity 32,451 39,736
========================= =========
Liabilities
Non-current liabilities
Borrowings 16 11,351 8,507
------------------------- ---------
Total non-current liabilities 11,351 8,507
========================= =========
Current liabilities
Borrowings 16 1,634 2,204
Trade and other payables 17 5,292 7,119
Total current liabilities 6,926 9,323
========================= =========
Total liabilities 18,277 17,830
========================= =========
Total equity and liabilities 50,728 57,566
========================= =========
COMPANY STATEMENT OF FINANCIAL POSITION
Notes 2021 2020
GBP'000 GBP'000
=================================== ======= ========================= =========
Assets
Non-current assets
Investments in subsidiaries 12 30,189 30,189
Amounts owed by group undertakings 46,919 47,066
------------------------- ---------
Total non-current assets 77,108 77,255
========================= =========
Current assets
Cash and cash equivalents 786 578
Trade and other receivables 14 144 658
------------------------- ---------
Total current assets 930 1,236
========================= =========
Total assets 78,038 78,491
========================= =========
Equity and liabilities
Equity
Issued share capital 15 73,548 73,548
Retained earnings (5,504) (5,165)
Other reserves 8,966 8,966
------------------------- ---------
Total equity 77,010 77,349
========================= =========
Liabilities
Current liabilities
Trade and other payables 17 1,028 1,142
Total current liabilities 1,028 1,142
========================= =========
Total liabilities 1,028 1,142
========================= =========
Total equity and liabilities 78,038 78,491
========================= =========
CONSOLIDATED 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 year - (7,071) - - (7,071) (365) (7,436)
Other comprehensive
income for the
year - - (41) - (41) 2 (39)
Total comprehensive
loss for the year - (7,071) (41) - (7,112) (363) (7,475)
-------- --------- --------- --------- -------- ------------ --------
Share based payment - 70 - - 70 - 70
Adjustment arising
from change in
non-controlling
interest - 4 - - 4 (4) -
Issuance of subsidiary
shares to employees - - - - - 19 19
Intragroup transfer
of subsidiary - - - 2 2 - 2
Issuance of shares
by subsidiary - (4) - - (4) 103 99
-------- --------- --------- --------- -------- ------------ --------
Balance at 31
December 2021 73,548 (17,731) 4 (24,393) 31,428 1,023 32,451
======== ========= ========= ========= ======== ============ ========
Balance at 1 January
2020 73,548 (63) (40) (24,395) 49,050 1,293 50,343
Loss for the year - (10,971) - - (10,971) (432) (11,403)
Other comprehensive
income for the
year - - 85 - 85 - 85
-------- --------- --------- --------- -------- ------------ --------
Total comprehensive
loss for the year - (10,971) 85 - (10,886) (432) (11,318)
-------- --------- --------- --------- -------- ------------ --------
Share based payment - 545 - - 545 - 545
Issuance of subsidiary
shares to employees - (322) - - (322) 488 166
Adjustment arising
from change in
non-controlling
interest - 81 - - 81 (81) -
Balance at 31
December 2020 73,548 (10,730) 45 (24,395) 38,468 1,268 39,736
======== ========= ========= ========= ======== ============ ========
Share capital
Share capital represents the nominal value of equity share
capital issued.
Retained earnings
The retained earnings reserve represents cumulative net gains
and losses.
Foreign exchange reserve
The foreign exchange reserve represents exchange differences
which arise on consolidation from the translation of the financial
statements of foreign subsidiaries.
Other reserves
Other reserves consist of the merger reserve and the share
revaluation reserve.
The merger reserve arose as a result of combining businesses
that are under common control. As at 31 December 2021 it was a
debit balance of GBP33,358,000 (2020: GBP33,360,000)
The share revaluation reserve arose from the share cancellation
that took place in February 2018. As at 31 December 2021 its
balance was GBP8,966,000 (2020: GBP8,966,000).
Non-Controlling Interest
The non-controlling interest relates to the minority interest
held in Bandana Media Limited, Playstack OY, Vertus Capital
Limited, Vertus SPV1 Limited, Satago Financial Solutions Limited,
Satago SPV1 Limited, Satago SPV2 Limited, Altlending Limited and
Satago z.o.o.
COMPANY STATEMENT OF CHANGES IN EQUITY
Share capital Retained earnings Other reserves Total equity
GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== =================== ================ ==============
Balance at 1 January
2021 73,548 (5,165) 8,966 77,349
Total comprehensive loss
for the year - (409) - (409)
Share based payment - 70 - 70
--------------- ------------------- ---------------- --------------
Balance at 31 December
2021 73,548 (5,504) 8,966 77,010
=============== =================== ================ ==============
Balance at 1 January
2020 73,548 (5,006) 8,966 77,508
Total comprehensive loss
for the year - (704) - (704)
Share based payment - 545 - 545
Balance at 31 December
2020 73,548 (5,165) 8,966 77,349
=============== =================== ================ ==============
CONSOLIDATED STATEMENT OF CASH FLOWS
2021 2020
GBP'000 GBP'000
========================================== ======================== =========
Cash flows from operating activities
Loss before tax (8,422) (8,927)
Adjustments for
Depreciation of property, plant and
equipment 96 128
Amortisation of intangible assets 1,571 1,209
Share based payments 70 545
Decrease in provision - (700)
Finance costs 656 412
Impairment of intangible assets - 222
Share of profit from associate (3) -
Loss on disposal of Fixed Assets 2 -
Loss on intragroup transfer of subsidiary 2 -
Working capital adjustments (6,028) (7,111)
Movement in Loans and advances (1,472) 13,045
(Increase)/decrease in trade and
other receivables (720) 30
(Decrease)/increase in trade and
other payables (1,831) 2,384
(4,023) 15,459
Tax paid (2) (17)
Interest and finance costs paid (716) (276)
------------------------ ---------
Net cash (used in)/from operating
activities (10,769) 8,055
======================== =========
Cash flows from investing activities:
Additions to intangible assets (1,779) (1,905)
Additions to property, plant and
equipment (24) (31)
Net cash used in investing activities (1,803) (1,936)
Cash flows from financing activities:
Issue of ordinary share capital of
subsidiary 148 166
New borrowings 16 2,353 4,382
Net cash generated from financing
activities 2,501 4,548
------------------------ ---------
Net (decrease)/increase in cash and
cash equivalents (10,071) 10,667
Cash and cash equivalents at beginning
of the year 17,728 6,971
Effect of foreign exchange rate changes (49) 90
------------------------ ---------
Cash and cash equivalents at end
of the year 7,608 17,728
======================== =========
COMPANY STATEMENT OF CASH FLOWS
2021 2020
GBP'000 GBP'000
=================================================== ======================== =========
Cash flows from operating activities
Loss before income tax (409) (704)
Adjustments for:
Depreciation of property, plant and equipment - 1
Interest income (2,008) (2,073)
Share based payments 70 545
Decrease in provision - (700)
------------------------ ---------
Working capital adjustments (2,347) (2,931)
Decrease/(increase) in trade and other receivables 513 (369)
Decrease in trade and other payables (114) (304)
------------------------ ---------
399 (673)
------------------------ ---------
Net cash generated used in operating activities (1,948) (3,604)
------------------------ ---------
Cash flows from investing activities
Cash received on intragroup loans 2,156 3,998
Net cash generated from investing activities 2,156 3,998
Net increase in cash and cash equivalents 208 394
------------------------ ---------
Cash and cash equivalents at beginning of the
year 578 184
------------------------ ---------
Cash and cash equivalents at end of the year 786 578
======================== =========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Statutory information
TruFin plc is a Company registered in Jersey and incorporated
under Companies (Jersey) Law 1991. The Company's ordinary shares
were listed on the Alternative Investment Market of the London
Stock Exchange on 21 February 2018. The address of the registered
office is 26 New Street, St Helier, Jersey, JE2 3RA.
1. Accounting policies
General information
The TruFin Group (the "Group") is the consolidation of TruFin
plc and the companies set out in the "Basis of consolidation"
(below).
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.
Basis of accounting
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS").
Prior to 29 November 2017 and before the incorporation of TruFin
plc and TruFin Holdings, the entities named above were under common
control and therefore, have been accounted for as a common control
transaction - that is a business combination in which all the
combining entities or businesses are ultimately controlled by the
same company both before and after the combination. IFRS 3 provides
no specific guidance on accounting for entities under common
control and therefore other relevant standards have been
considered. These standards refer to pooling of assets and merger
accounting and this is the methodology that has been used to
consolidate the Group.
After 29 December 2017, post the reorganisation, the entities
constitute a legal group and accordingly the consolidated financial
statements have been prepared by applying relevant principles
underlying the consolidation procedures of IFRS.
Basis of preparation
The results of the Group companies have been included in the
consolidated statement of comprehensive income. Where necessary,
adjustments have been made to the underlying financial information
of the companies to bring the accounting policies used into line
with those used by the Group. All intra-group transactions,
balances, income and expenses are eliminated on consolidation.
The consolidated financial statements contained in this document
consolidates the statements of total comprehensive income,
statements of financial position, cash flow statements, statements
of changes in equity and related notes for each of the companies
listed in the "Basis of consolidation" below, which have been
prepared in accordance with IFRS.
Non-controlling interests, presented as part of equity,
represent the portion of a subsidiary's profit or loss and net
assets that is not held by the Group. The Group attributes total
comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their
respective ownership interests.
Basis of consolidation
The consolidated financial statements include all of the
companies controlled by the Group, which are as follows:
Country Nature of % voting rights
Entities of Registered address the business and shares
incorporation held
========================== =============== =========================== ======================= ===================
TruFin Holdings Limited Jersey 26 New Street, Holding Company 100% of ordinary
("THL") St Helier, Jersey shares
JE2 3RA
========================== =============== =========================== ======================= ===================
Satago Financial UK 48 Warwick Street, Provision 85.1% of ordinary
Solutions London, United of short term shares*
Limited ("Satago") Kingdom, W1B 5AW finance
========================== =============== =========================== ======================= ===================
Satago SPV 1 Limited UK 48 Warwick Street, Provision 85.1% of ordinary
("Satago SPV 1") London, United of short term shares*
Kingdom, W1B 5AW finance
========================== =============== =========================== ======================= ===================
Satago SPV 2 Limited UK 48 Warwick Street, Provision 85.1% of ordinary
("Satago SPV 2") London, United of short term shares*
Kingdom, W1B 5AW finance
========================== =============== =========================== ======================= ===================
Satago z.o.o (Satago Poland 32-023 Krakow ul. Provision 85.1% of ordinary
Poland) Sw. Krzyza 19/6 of short term shares*
Poland finance
========================== =============== =========================== ======================= ===================
Oxygen Finance Group UK 1(st) Floor Enterprise Holding Company 88.4% of ordinary
Limited ("OFGL") House, shares**
(together 115 Edmund Street,
with OFL and OFAI) Birmingham, United
("Oxygen") Kingdom, B3 2HJ
========================== =============== =========================== ======================= ===================
Oxygen Finance Limited UK 1(st) Floor Enterprise Provision 88.4% of ordinary
("OFL") House, of early payment shares**
115 Edmund Street, services
Birmingham, United
Kingdom, B3 2HJ
========================== =============== =========================== ======================= ===================
Oxygen Finance Americas, USA Corporation Trust Provision 88.4% of ordinary
Inc ("OFAI") Center, 1209 Orange of early payment shares**
Street, City of services
Wilmington, County
of New Castle,
Delaware 19801,
USA
========================== =============== =========================== ======================= ===================
Porge Ltd ("Porge") UK Cathedral Place, Provision 84.4% of ordinary
*** 42-44 Waterloo of market shares**
Street, Birmingham, research information.
United Kingdom,
B2 5QB
========================== =============== =========================== ======================= ===================
TruFin Software Limited UK 48 Warwick Street, Provision 100% of ordinary
("TSL") London, United of technology shares
Kingdom, W1B 5AW services
========================== =============== =========================== ======================= ===================
AltLending UK Limited UK 48 Warwick Street, Provision 100% of ordinary
("AltLending") London, United of short term shares*
Kingdom, W1B 5AW finance
========================== =============== =========================== ======================= ===================
Vertus Capital Limited UK Building 1 Chalfont Provision 54% of ordinary
("Vertus Capital") Park, Gerrards of short term shares
(together Cross, United Kingdom, finance
with Vertus SPV 1 SL9 0BG
Limited)
("Vertus")
========================== =============== =========================== ======================= ===================
Vertus Capital SPV 1 UK Building 1 Chalfont Provision 54% of ordinary
Limited ("Vertus SPV Park, Gerrards of short term shares
1") Cross, United Kingdom, finance
SL9 0BG
========================== =============== =========================== ======================= ===================
Playstack Limited UK 56a Poland Street, Publishing 100% of ordinary
("Playstack")**** London United Kingdom, of computer shares
W1F 7NN games
========================== =============== =========================== ======================= ===================
Bandana Media Limited UK 56a Poland Street, Publishing 72% of ordinary
("Bandana")**** London United Kingdom, of computer shares
W1F 7NN games
========================== =============== =========================== ======================= ===================
PlayIgnite Ltd UK 56a Poland Street, Business and 100% of ordinary
("PlayIgnite")**** London United Kingdom, domestic software shares
W1F 7NN developer
========================== =============== =========================== ======================= ===================
Playstack z.o.o ("PS Poland Kamienna 21, 31-403 Publishing 100% of ordinary
Poland") **** Krakow, Poland activities shares
in the field
of computer
games
========================== =============== =========================== ======================= ===================
Playstack OY ("PS Finland Mikonkatu 17 B, Publishing 75% of ordinary
Finland")**** 00100 Helsinki, activities shares
Finland in the field
of computer
games
========================== =============== =========================== ======================= ===================
Playstack AB ("PS Sweden Solbergavägen Developing, 100% of ordinary
Sweden")**** 17, 17998 Färentuna, publishing shares - (80%
Sweden and selling until 8 October
electronic 2020)
games
========================== =============== =========================== ======================= ===================
Playstack Inc ("Playstack USA Gust Delaware, Publishing 100% of ordinary
USA")**** 16192 Coastal Hwy, of computer shares
Lewes, DE 19958 games
========================== =============== =========================== ======================= ===================
PlayIgnite Inc USA Cogency Global Business and 100% of ordinary
("PlayIgnite Inc, 850 New Burton domestic software shares
USA")**** Road, Suite 201, developer
Dover DE 19904
========================== =============== =========================== ======================= ===================
* Following the grant of the Satago Management Incentive Plan
("Satago MIP"), the effective economic ownership of these companies
is 94.1% based on their Statements of Financial Position at the
Reporting Date.
** Nominal ownership of these companies is 88.4% due to the
Oxygen Management Incentive Plan ("Oxygen MIP"). Effective economic
ownership is 100% based on their Statements of Financial Position
at the Reporting Date.
*** On 22 March 2022, Porge was dissolved.
**** The Playstack Group includes 4 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
-- A 27% interest in Storm Chaser Games Limited ("Storm Chaser
Games")
Principal accounting policies
The principal accounting policies adopted in the preparation of
the financial statements are set out below. These policies have
been applied consistently to all the financial periods
presented.
The consolidated financial statements have been prepared in
accordance with European Union Endorsed International Financial
Reporting Standards (IFRSs) and the IFRS Interpretations Committee
(formerly the International Financial Reporting Interpretations
Committee (IFRIC)) interpretations. These statements have been
prepared on a going concern basis and under the historical cost
convention except for the treatment of certain financial
instruments.
Going concern
The Group's forecasts and projections, taking into account
reasonable possible changes in trading performance, show that the
Group should be able to operate in the foreseeable future. As a
consequence, and following the fundraise post year end of c.GBP10m,
the Directors have a reasonable expectation that the Group will
have adequate resources to continue in operational existence for
the foreseeable future. Accordingly, the Directors have adopted the
going concern basis in preparing these financial statements. This
assessment takes into consideration the potential uncertainties
arising from Covid-19 mentioned earlier in the report.
Revenue recognition
Net revenue
Interest income and expense
Interest income and expense for all financial instruments except
for those classified as held for trading or measured or designated
as at Fair Value Through Profit and Loss ("FVTPL") are recognised
in "Net revenue" as "Interest income" and "Interest, fee and
publishing expenses" in the profit or loss account using the
effective interest method.
The Effective Interest Rate ("EIR") is the rate that exactly
discounts estimated future cash flows of the financial instrument
through the expected life of the financial instrument or, where
appropriate, a shorter period, to the net carrying amount of the
financial asset or financial liability. The future cash flows are
estimated taking into account all the contractual terms of the
instrument.
The calculation of the EIR includes all fees and points paid or
received between parties to the contract that are incremental and
directly attributable to the specific lending arrangement,
transaction costs and all other premiums or discounts.
The interest income/expense is calculated by applying the EIR to
the gross carrying amount of non-credit impaired financial assets
(that is, to the amortised cost of the financial asset before
adjusting for any expected credit loss allowance), or to the
amortised cost of financial liabilities.
For credit-impaired financial assets, as defined in the
financial instruments accounting policy, the interest income is
calculated by applying the EIR to the amortised cost of the
credit-impaired financial assets, that is, to the gross carrying
amount less the allowance for Expected Credit Losses ("ECLs").
Fee income
Fee income for the Group is earned from payments services fees
provided by Oxygen and subscription fees from Porge and Satago.
Payment services provided by Oxygen comprises the following
elements:
Early Payment Programme Services ("EPPS") contracts
Oxygen's EPPS generate rebates (i.e. discounts on invoice value)
for its clients by facilitating the early payment of supplier
invoices. Oxygen's single performance obligation is to make its
intellectual property and software platform available to its
clients for the duration of their contracts.
Oxygen bills its clients monthly for a contractually agreed
share of supplier rebates generated by their respective Early
Payment Programmes during the previous month. This revenue is
recognised in the month the rebates are generated.
Implementation fees
Oxygen Implementation fees
Implementation fees are charged to some clients in establishing
a client's technological access to the EPPS and in otherwise
readying a client to benefit from the Services. Establishing access
to the company's intellectual property and software platform does
not amount to a distinct service as the client cannot benefit from
the initial access except by the company continuing to provide
access for the contract period. Where an implementation fee is
charged, it is therefore a component of the aggregate transaction
price of the EPPS. Accordingly, such revenue is initially deferred
and then recognised in the statement of comprehensive income over
the life of the related EPPS.
Satago Implementation fees
Implementation fees have also been recognised by Satago in full
on the signing of new contracts with partners.
Consultancy fees
Oxygen provides stand-alone advisory services to clients.
Revenue is accrued as the underlying services are provided to the
client.
Subscription fees
Insight services subscription fees
The Insight Services offered by OFL (previously within Porge)
provide focussed public sector procurement data and analytics on a
subscription basis. Clients cover both the Private sector, enabling
them to improve and develop their engagement with the public
sector, and Public sector organisations, enabling them to make more
informed procurement decisions. Subscriptions are typically
received in advance and recognised over the length of the contract
as access to the database is provided.
Satago subscription fees
These are monthly fees for access to Satago's platform.
Subscriptions are received in advance and recognised during the
month the subscription relates to.
Fee expenses
Fee expenses are directly attributable costs, associated with
the Oxygen's EPPS. The expenses include amortisation arising from
capitalised contract costs incurred directly through activities
which generate fee income. Amortisation arising from other
intangible assets is recognised in depreciation and amortisation of
non-financial assets before operating profit/loss.
Publishing income
Publishing income for the Group is earned by companies in the
Playstack Group and comprises the following elements. Publishing
income is recognised at the fair value of consideration received or
receivable for goods and services provided and is shown net of VAT
and any other sales taxes. The fair value takes into account any
trade or volume discounts and commission retained.
In App Purchases (IAP) revenue
IAP revenue is earned on the sale of mobile games and features
within those games. It is recognised when the game or feature is
sold.
Advertising revenue
Advertising revenue is earnings from featuring third party
advertising within mobile games. It is recognised when these
advertisements are featured within the games.
Console revenue
Console revenue is earned on the sale of video games for
consoles. It is recognised when the game is sold.
Brand revenue
Brand revenue is when a mobile game player signs up to an
advertised brand in a mobile game. Revenue is recognised when the
brand has confirmed acquisition of the customer.
Publishing expenses
Publishing expenses are directly attributable costs, associated
with the Playstack Group's publishing income. These costs are
included at their invoiced value and are net of VAT and any other
sales tax.
Operating profit/loss
Operating profit/loss is net interest and fee income less staff
costs, depreciation and amortisation, impairment loss on financial
assets and other operating expenses.
Foreign currencies
The results and financial position of each group company are
expressed in Pounds Sterling, which is the functional currency of
the UK based members of the Group and the presentation currency for
the consolidated financial statements.
Transactions in foreign currencies are translated to the Group
companies' functional currency at the foreign exchange rate ruling
at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the foreign exchange
rate ruling at that date. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction.
Foreign exchange differences arising on translation are recognised
in the consolidated statement of comprehensive income.
In preparing the consolidated financial statements, the assets
and liabilities of the group's foreign operations are translated at
the exchange rate at the reporting date. Income and expense items
are translated at the average exchange rates for the year. Exchange
differences arising, are recognised in other comprehensive income
and are accumulated in the Foreign exchange reserve equity
section.
Property, plant and equipment
All property, plant and equipment is stated at historical cost
(or deemed historical cost) less accumulated depreciation and less
any identified impairment. Cost includes the original purchase
price of the asset and the costs attributable to bringing the asset
to its working condition for its intended use.
Depreciation is provided on all property, plant and equipment at
rates calculated to write each asset down to its estimated residual
value on a straight line basis at the following annual rates:
Leasehold improvements - 5 years
Fixtures and fittings - 3 years
Computer equipment - 3 -5 years
Useful economic lives and estimated residual values are reviewed
annually and adjusted as appropriate.
Intangible assets
Identifiable intangible assets are recognised when the Group
controls the asset, it is probable that future economic benefits
attributed to the asset will flow to the Group and the cost of the
asset can be reliably measured.
Intangible assets with finite lives are stated at acquisition or
development cost less accumulated amortisation and less any
identified impairment. The amortisation period and method is
reviewed at least annually. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits
embodied in the asset are accounted for by changing the
amortisation period or method, as appropriate and are treated as
changes in accounting estimates.
Computer software
Computer software which has been purchased by the Group from
third party vendors is measured at initial cost less accumulated
amortisation and less accumulated impairments.
Computer software also comprises internally developed platforms
and the costs directly associated with the production of these
identifiable and unique software products controlled by the Group.
They are probable of producing future economic benefits. They
primarily include employee costs and directly attributable
overheads.
Internally generated intangible assets are only recognised by
the Group when the recognition criteria have been met in accordance
with IAS 38: Intangible Assets as follows:
-- expenditure can be reliably measured;
-- the product or process is technically and commercially
feasible;
-- future economic benefits are likely to be received;
-- intention and ability to complete the development; and
-- view to either use or sell the asset in the future.
The Group will only recognise an internally-generated asset
should it meet all the above criteria. In the event of a
development not meeting the criteria it will be recognised within
the statement of profit or loss in the period incurred.
Capitalised costs include all directly attributable costs to the
development of the asset. Internally generated assets are measured
at capitalised cost less accumulated amortisation less accumulated
impairment losses. The internally generated asset is amortised at
the point the asset is available for use or sale. The asset is
amortised on a straight-line basis over the useful economic life
with the remaining useful economic life and residual value being
assessed annually.
Any subsequent expenditure on the internally generated asset is
only capitalised if the cost increases the future economic benefits
of the related asset. Otherwise all additional expenditure should
be recognised through the statement of profit or loss in the period
it occurs.
Contract assets
Contract assets 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.
Amortisation is charged to the statement of comprehensive income
over the estimated useful lives of intangible assets from the date
they are available for use, on a straight-line basis. The
amortisation basis adopted for each class of intangible asset
reflects the Group's consumption of the economic benefit from that
asset.
Estimated useful lives
The estimated useful lives of finite intangible assets are as
follows:
Computer software - 3 -5 years
Contract assets - Life of underlying contract (typically
5 years)
Goodwill
Goodwill arising on acquisition represents the excess cost of a
business combination over the fair values of the Group's share of
the identifiable assets and liabilities at the date of the
acquisition. When part of the consideration transferred by the
Group is deferred or contingent, this is valued at its acquisition
date fair value, and is included in the consideration transferred
in a business combination. Changes in the deferred or contingent
consideration, which occur in the measurement period, are adjusted
retrospectively, with corresponding adjustments to goodwill.
Goodwill is not amortised but is reviewed at least annually for
impairment. For the purpose of impairment testing, goodwill is
allocated to each Cash Generating Unit ("CGU"). Each CGU is
consistent with the Group's primary reporting segment. Any
impairment is recognised immediately through the income statement
and is not subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of profit or loss on disposal.
Assets classified as held for sale
Whilst assessing whether any assets should be classified as held
for sale, the management of the Group ensure that the status of the
asset satisfies all of the following criteria as set out within
IFRS 5:
-- the carrying amount of the asset will be recovered
principally through a sale transaction rather than through
continuing use;
-- the asset is available for immediate sale in its present
condition subject only to terms that are usual and customary for
sales of such assets;
-- its sale must be highly probable and within one year from the
date of classification;
-- management must be committed to a plan to sell the asset;
and
-- the asset is being actively marketed for sale at a sales
price reasonable in relation to its fair value.
In the event an asset satisfies the criteria, prior to
reclassification the asset should be valued in accordance with IFRS
accounting standards applicable to the asset in question.
At initial recognition the asset is measured at the lower of
carrying amount and fair value less costs to sell. Any unrealised
gains or losses are recognised in the profit and loss account.
Financial instruments
Initial recognition
Financial assets and financial liabilities are recognised in the
Group's statement of financial position when the Group becomes a
party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of the financial assets
and financial liabilities (other than financial assets and
financial liabilities at FVTPL) are respectively added to or
deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction
costs that are directly attributable to the acquisition of
financial assets and financial liabilities at FVTPL are recognised
immediately in profit or loss.
Financial assets
Classification and reclassification of financial assets
Recognised financial assets within the scope of IFRS 9 are
required to be classified as subsequently measured at amortised
cost, FVTOCI or FVTPL on the basis of both the Group's business
model for managing the financial assets and the contractual cash
flow characteristics of the financial assets.
Financial assets are reclassified if and only if, the business
model under which they are held is changed. There has been no such
change in the allocation of assets to business models in the
periods under review.
Loans and advances
Loans and advances are held within a business model whose
objective is to hold those financial assets in order to collect
contractual cash flows. The contractual terms of the loan
agreements give rise on specified dates to cash flows that are
solely payments of principal and interest or fees on the principal
amount outstanding.
After initial measurement, loans and advance to customers are
subsequently measured at amortised cost using the Effective
Interest Rate method (EIR) less impairment. Amortised cost is
calculated by taking into account any fees or costs that are an
integral part of the EIR. The EIR amortisation is included in
interest and similar income in the statement of comprehensive
income. The losses arising from impairment are recognised in the
statement of comprehensive income and disclosed with any other
similar losses within the line item "Net impairment losses on
financial assets".
Where cash flows are significantly different from the original
expectations used to determine EIR, but where this difference does
not arise from a modification of the terms of the financial
instrument, the Group revises its estimates of receipts and adjusts
the gross carrying amount of the financial asset to reflect actual
and revised estimated contractual cash flows. The Group
recalculates the gross carrying amount of the financial asset as
the present value of the estimated future contractual cash flows
discounted at the financial instrument's original EIR. The
adjustment is recognised in statement of comprehensive income as
income or expense.
Trade and other receivables
Trade receivables do not contain any significant financing
component and accordingly are recognised initially at transaction
price, and subsequently measured at cost less expected credit
losses.
Investments in equity shares
Prior to its disposal the Group's investment in the equity
shares of Zopa was not held for trading. The Group made an
irrevocable election to classify and subsequently measure the
investment at FVTOCI. Movements in the fair value of the investment
were recognised in the statement of other comprehensive income and
were not reclassified to profit on loss on derecognition.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less
impairment in the Company's financial statements.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and demand
deposits and short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
Impairment
The Group (and Company) recognises loss allowances for Expected
Credit Losses ("ECLs") on the following financial instruments that
are not measured at FVTPL:
-- Loans and advances;
-- Other receivables;
-- Trade receivables; and
-- Intercompany receivables
ECLs are measured through loss allowances calculated on the
following bases:
ECLs are a probability-weighted estimate of the present value of
credit losses. These are measured as the present value of the
difference between the cash flows due to the Group under the
contract and the cash flows that the Group expects to receive
arising from the weighting of future economic scenarios, discounted
at the asset's EIR within the current performing book.
The Group measures ECL on an individual basis, or on a
collective basis for portfolios of loans that share similar credit
risk characteristics. The loss allowance is measured as the present
value of the difference between the contractual cash flows and cash
flows that the Group expects to receive using the asset's original
EIR, regardless of whether it is measured on an individual basis or
a collective basis.
A financial asset that gives rise to credit risk, is referred to
(and analysed in the notes to this financial information) as being
in "Stage 1" provided that since initial recognition (or since the
previous reporting date) there has not been a significant increase
in credit risk, nor has it has become credit impaired.
For a Stage 1 asset, the loss allowance is the "12-month ECL",
that is, the ECL that results from those default events on the
financial instrument that are possible within 12 months from the
reporting date.
A financial asset that gives rise to credit risk is referred to
(and analysed in the notes to this financial information) as being
in "Stage 2" if since initial recognition there has been a
significant increase in credit risk but it is not credit
impaired.
For a Stage 2 asset, the loss allowance is the "lifetime ECL",
that is, the ECL that results from all possible default events over
the life of the financial instrument.
A financial asset that gives rise to credit risk is referred to
(and analysed in the notes to this financial information) as being
in "Stage 3" if since initial recognition it has become credit
impaired.
For a Stage 3 asset, the loss allowance is the difference
between the asset's gross carrying amount and the present value of
estimated future cash flows discounted at the financial asset's
original EIR. Further, the recognition of interest income is
calculated on the carrying amount net of impairment rather than the
gross carrying amount as for stage 1 and stage 2 assets.
If circumstances change sufficiently at subsequent reporting
dates, an asset is referred to by its newly appropriate Stage and
is re-analysed in the notes to the financial information.
Where an asset is expected to mature in 12 months or less, the
"12 month ECL" and the "lifetime ECL" have the same effective
meaning and accordingly for such assets the calculated loss
allowance will be the same whether such an asset is at Stage 1 or
Stage 2. However, the Group monitors significant increase in credit
risk for all assets so that it can accurately disclose Stage 1 and
Stage 2 assets at each reporting date.
Lifetime ECLs are recognised for all trade receivables using the
simplified approach.
Significant increase in credit risk - policies and procedures
for identifying Stage 2 assets
The Group compares the risk of a default occurring on the
financial instrument as at the reporting date with the risk of a
default occurring on the financial instrument as at the date of
initial recognition in order to determine whether credit risk has
increased significantly.
See note 18 for further details about how the Group assesses
increases in significant credit risk.
Definition of a default
Critical to the determination of significant increases in credit
risk (and to the determination of ECLs) is the definition of
default. Default is a component of the Probability of Default
("PD"), changes in which lead to the identification of a
significant increase in credit risk and PD is then a factor in the
measurement of ECLs.
The Group's definition of default for this purpose is:
-- a counterparty defaults on a payment due under a loan
agreement and that payment is more than 90 days overdue, or
-- within the core invoice finance proposition, where one or
more individual finance repayments are beyond 90 days overdue,
management judgement is applied in considering default status of
the client.
-- the collateral that secures, all or in part, the loan
agreement has been sold or is otherwise not available for sale and
the proceeds have not been paid to the lending company; or
-- a counterparty commits an event of default under the terms
and conditions of the loan agreement which leads the lending
company to believe that the borrower's ability to meet its credit
obligations to the lending company is in doubt.
The definition of default is similarly critical in the
determination of whether an asset is credit-impaired (as explained
below).
Credit-impaired financial assets - policies and procedures for
identifying Stage 3 assets
A financial asset is credit-impaired when one or more events
that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred. IFRS 9 states that evidence
of credit-impairment includes observable data about the following
events:
-- Significant financial difficulty of the borrower;
-- A breach of contract such as a default (as defined above) or
past due event, or
-- The Group, for economic or contractual reasons relating to
the borrower's financial difficulty, having granted to the borrower
a concession that the Group would not otherwise consider.
The Group assesses whether debt instruments that are financial
assets measured at amortised cost or at FVTOCI are credit-impaired
at each reporting date. When assessing whether there is evidence of
credit- impairment, the Group takes into account both qualitative
and quantitative indicators relating to both the borrower and to
the asset. The information assessed depends on the borrower and the
type of the asset. It may not be possible to identify a single
discrete event - instead, the combined effect of several events may
have caused financial assets to become credit-impaired.
See note 18 for further details about how the Group identifies
credit-impaired assets.
Presentation of allowance for ECL in the statement of financial
position
Loss allowances for ECL are presented in the statement of
financial position as follows:
-- For financial assets measured at amortised cost: as a
deduction from the gross carrying amount of the assets;
-- For loan commitments: as a provision; and
-- For debt instruments measured at FVTOCI: no loss allowance is
recognised in the statement of financial position as the carrying
amount is at fair value. However, the loss allowance is included as
part of the revaluation amount in the investment revaluation
reserve.
Modification of financial assets
A modification of a financial asset occurs when the contractual
terms governing a financial asset are renegotiated without the
original contract being replaced and derecognised and:
-- The gross carrying amount of the asset is recalculated and a
modification gain or loss is recognised in profit or loss;
-- Any fees charged are added to the asset and amortised over
the new expected life of the asset; and
-- The asset is individually assessed to determine whether there
has been a significant increase in credit risk.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
derecognised when the rights to receive cash flows from the asset
have expired. The Group also derecognises the assets if it has both
transferred the asset and the transfer qualifies for
derecognition.
A transfer only qualifies for derecognition if either
-- The Group has transferred substantially all the risks and
rewards of the asset; or
-- The Group has neither transferred nor retained substantially
all the risks and rewards of the asset but has transferred control
of the asset.
Write offs
Loans and advances are written off when the Group has no
reasonable expectation of recovering the financial asset (either in
its entirety or a portion of it). This is the case when the Group
determines that the borrower does not have assets or sources of
income that could generate sufficient cash flows to repay the
amounts subject to the write-off. A write-off constitutes a
derecognition event. The Group may apply enforcement activities to
financial assets written off. Recoveries resulting from the Group's
enforcement activities will result in impairment gains.
Debt securities
Debt securities are financial assets that are not held for
trading and are intended to be held within a business model to
collect contractual cash flows or sell. These are initially
measured at fair value plus transaction costs that are directly
attributable to the financial asset. Subsequently changes in the
fair value are recognised in other comprehensive income except for
interest calculated at the asset's EIR, foreign exchange and
impairment gains and losses.
Financial liabilities
Financial liabilities and equity
Debt and equity instruments that are issued are classified as
either financial liabilities or as equity in accordance with the
substance of the contractual arrangement.
A financial liability is a contractual obligation to deliver
cash or another financial asset or to exchange financial assets or
financial liabilities with another entity under conditions that are
potentially unfavourable to the Group or a non-derivative contract
that will or may be settled in a variable number of the Group's own
equity instruments, or a derivative contract over own equity that
will or may be settled other than by the exchange of a fixed amount
of cash (or another financial asset) for a fixed number of the
Group's own equity instruments.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recognised
as at the proceeds received, net of direct issue costs.
Distributions on equity instruments are recognised directly in
equity.
Financial liabilities
Financial liabilities are classified as either financial
liabilities at FVTPL or other financial liabilities.
Financial liabilities at Fair Value through Profit or Loss
Financial liabilities at FVTPL may include financial liabilities
held for trading. Financial liabilities are classified as held for
trading if they are acquired for the purpose of selling in the near
term.
During the period under review the Group has held no financial
liabilities for trading, nor designated any financial liabilities
upon initial recognition as at fair value through profit or
loss.
Other financial liabilities
Interest bearing borrowings are measured at amortised cost using
the effective interest rate method. Gains and losses are recognised
in the income statement when the liabilities are derecognised as
well as through the effective interest rate method (EIR). Amortised
cost is calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in "Interest and fee
expenses" in the profit and loss account.
Derecognition of financial liabilities
The Group derecognises financial liabilities when and only when,
the Group's obligations are discharged, cancelled or they
expire.
Impairment of non-financial assets
The carrying amounts of the entity's non-financial assets, other
than goodwill and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the asset's
recoverable amount is estimated. The recoverable amount of an asset
or cash-generating unit is the greater of its value in use and its
fair value less costs to sell. In assessing value in use, the
estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset.
For the purposes of impairment testing, assets that cannot be
tested individually are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups
of assets (the Cash-Generating Unit or "CGU").
Contract assets are reviewed for impairment based on the
performance of the underlying contract.
Goodwill is tested annually for impairment in accordance with
IFRS. The goodwill acquired in a business combination, for the
purpose of impairment testing is allocated to CGU that are expected
to benefit from the synergies of the combination. For the purpose
of goodwill impairment testing, if goodwill cannot be allocated to
individual CGUs or groups of CGUs on a non-arbitrary basis, the
impairment of goodwill is determined using the recoverable amount
of the acquired entity in its entirety, or if the acquired entity
has been integrated then the entire group of entities into which it
has been integrated.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the statement of comprehensive
income. Impairment losses recognised in respect of CGUs are
allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amounts of
other assets in the unit (or group of units) on a pro rata
basis.
An impairment loss is reversed if and only if the reasons for
the impairment have ceased to apply. An impairment loss recognised
for goodwill is not reversed.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indication that the loss has decreased
or no longer exists. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
Current and deferred income tax
Income tax on the result for the period comprises current and
deferred income tax. Income tax is recognised in the consolidated
statement of comprehensive income except to the extent that it
relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income for the period, using tax rates enacted or
substantively enacted at the reporting date and any adjustment to
tax payable in respect of previous periods.
Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The amount of deferred
tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using
tax rates enacted or substantively enacted at the reporting
date.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and
liabilities on a net basis.
Employee benefits - pension costs
A defined contribution plan is a post-employment benefit plan
under which the Group pays fixed contributions into a separate
entity and will have a legal or constructive obligation to pay
further amounts. Contributions to defined contribution schemes are
charged to the statement of comprehensive income as they become
payable in accordance with the rules of the scheme. Differences
between contributions payable in the year and contributions
actually paid are shown as either accruals or prepayments in the
statement of financial position.
Provisions for commitments and other liabilities
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (discounted at the
Group's weighted average cost of capital when the effect of the
time value of money is material).
When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognised as an asset only if it is virtually
certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
Merger reserve
Prior to 29 December 2017, the entities within the Group were
held by Arrowgrass Master Fund Limited. On 29 December 2017, these
entities were acquired by TruFin plc via TruFin Holdings Limited.
The consideration provided to Arrowgrass for the companies acquired
was in exchange for shares of TruFin plc based on the fair value of
the underlying companies. Upon consolidation of the group, the
difference between the book value of the entities and the amount of
the consideration paid was accounted through a merger reserve, in
accordance with relevant accounting standards relating to
businesses under common control.
Investments in associates
Associates are entities in which the Group has between 20% and
50% of the voting rights, or is otherwise able to exercise
significant influence, but which it does not control or jointly
control. Investments in associates are accounted for under the
equity method and are initially recognised at costs, including
goodwill. Subsequent changes in the carrying value reflect the
post-acquisition changes in the Group's share of net assets of the
associate. The Group's share of its associates profits or losses is
recognised in the consolidated income statement. However, when the
Group's share of losses in an associate equals or exceeds its
interest in the associate, the Group does not recognise further
losses, unless the Group is obliged to make further payments to, or
on behalf of the associate.
Segmental reporting
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions
with other components of the same entity) and whose operating
results are regularly reviewed by the Board of Directors in order
to make decisions about resources to be allocated to that component
and assess its performance and for which discrete financial
information is available.
For the purposes of the financial statements, the Directors
consider the Group's operations to be made up of four operating
segments: the provision of short term finance, payment services,
publishing and other operations.
The accounting policies of the reportable segments are
consistent with the accounting policies of the Group as a
whole.
Further details are provided in note 4.
Share based payments
Where the Group engages in share--based payment transactions in
respect of services received from certain of its employees, these
are accounted for as equity--settled share--based payments in
accordance with IFRS 2 'Share--based payments'. The equity is in
the form of ordinary shares.
The grant date fair value of a share--based payment transaction
is recognised as an employee expense, with a corresponding increase
in equity over the period that the employees become unconditionally
entitled to the awards. In the absence of market prices, the fair
value of the equity at the date of the grant is estimated using an
appropriate valuation technique
The amount recognised as an expense is adjusted to reflect the
actual number of awards for which the related services and
non--market vesting conditions are expected to be met such that the
amount ultimately recognised as an expense is based on the number
of awards that do meet the related service and non--market
performance conditions at the vesting date.
For share--based payment awards with market performance
conditions the grant date fair value of the award is measured to
reflect such conditions and there is no true--up for differences
between expected and actual outcomes.
Refer to note 6 for the amounts disclosed.
Leases
Leases are accounted for under IFRS 16. IFRS 16 distinguishes
leases and service contracts on the basis of whether an identified
asset is controlled by a customer. A model where a right-of-use
asset and a corresponding liability are recognised for all leases
by lessees (i.e. all on balance sheet) except for short term leases
and leases of low value assets.
The right-of-use asset is initially measured at cost and
subsequently measured at cost (subject to certain exceptions) less
accumulated depreciation and impairment losses, adjusted for any
remeasurement of the lease liability. The lease liability is
initially measured at the present value of the lease payments that
are not paid at that date. Subsequently, the lease liability is
adjusted for interest and lease payments, as well as the impact of
lease modifications, amongst others.
Government grants
Government grants are not recognised until there is reasonable
assurance that the group will comply with the conditions attaching
to them and that the grants will be received.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in profit or loss in the period in which they
become receivable. These grants are deducted from the expense that
the grant is related to.
2. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial information in accordance with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and reported
amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apart from other sources. The
estimates and underlying assumptions are reviewed on an ongoing
basis. Actual results may differ from these estimates.
The following are the critical judgements, apart from those
involving estimations (which are dealt with separately below), that
the directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in financial statements.
Critical accounting judgements
-- Early Payment Programme Services set up costs: the Group
capitalises the direct costs of implementing Early Payment
Programme Services contracts for clients. These costs are essential
to the satisfaction of the Group's performance obligation under
that contract and accordingly the Group considers that these costs
meet the applicable criteria for recognition as contract
assets.
The amount capitalised is disclosed in note 10.
-- Deferred tax asset: There is inherent uncertainty in
forecasting beyond the immediate future and significant judgement
is required to estimate whether future taxable profits are probable
in order to utilise the carried forward tax losses. Companies in
the Group have carried forward losses which will be utilised
against future taxable profits. However, a deferred tax asset has
not been recognised for these companies, except for Vertus Capital
Limited as there is uncertainty surrounding the timing of when
these losses will be used.
Refer to note 9 for more information on the deferred tax
asset.
-- The accounts of the trustee (the "EBT Trustee") of the
Company's Employee Benefit Trust ("EBT") have not been consolidated
as it is the Directors' opinion that the Company does not have
control over the EBT. The EBT is a discretionary trust, which means
that the EBT Trustee has discretion how to act, provided that the
action taken by the EBT Trustee is considered by the EBT Trustee to
be in the interest of one of more EBT beneficiaries (being
employees and former employees (and certain of their relatives) of
the Company and its subsidiaries.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting period that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed below:
Expected credit losses
-- Where an asset has a maturity of 12 months or less, the "12
month ECL" and the "lifetime ECL" have the same effective meaning
and accordingly for such assets the calculated loss allowance will
be the same whether such an asset is at stage 1 or stage 2.
-- The Probability of Default ("PD") is an estimate of the
likelihood of default over a given time horizon and is a key input
to the ECL calculation. The Group primarily uses credit scores from
credit reference agencies to calculate the PD for loans and
advances. The score is a 12-month predictor of credit failure and,
in the absence of internally generated loss history, the Group
believes that it provides the best proxy for the credit quality of
the loan portfolio.
-- Exposure At Default ("EAD") is an estimate of the exposure at
a future default date, taking into account expected changes in the
exposure after the reporting date, including repayments of
principal and interest, whether scheduled by contract or otherwise,
expected drawdowns on committed facilities and accrued interest
from missed payments.
-- Loss Given Default ("LGD") is an estimate of the loss arising
on default. It is based on the difference between the contractual
cash flows due and those that the lender would expect to receive,
in particular taking into account wholesale collateral values and
certain buy back options.
Measurement of fair values of level 3 instruments
In estimating the fair value of a financial asset or liability,
the Group uses market observable data to the extent that it is
available. Where such level 1 inputs are not available, the Group
uses valuation models to estimate the fair value of its financial
instruments.
3. Gross revenue
2021 2020
Group GBP'000 GBP'000
======================== ======================= ========
Revenue
Interest income 1,681 2,578
----------------------- --------
Total interest income 1,681 2,578
----------------------- --------
EPPS contracts 2,536 2,243
Consultancy fees 436 288
Implementation fees* 70 301
Subscription fees 1,288 1,014
----------------------- --------
Total fee income 4,330 3,846
----------------------- --------
IAP revenue 428 410
Advertising revenue 378 410
Console revenue 6,285 7,500
Brand revenue 13 88
----------------------- --------
Total publishing income 7,104 8,408
----------------------- --------
Gross revenue 13,115 14,832
======================= ========
*In 2020, Implementation fees also included fees recognised by
Satago in full on the signing of new contracts with partners.
2021 2020
Company GBP'000 GBP'000
============================= ======================= ========
Intercompany interest income 2,008 2,073
Intercompany fee income 118 118
Other interest income - 1
----------------------- --------
Gross revenue 2,126 2,192
======================= ========
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 distribution finance products and invoice
discounting. 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
Oxygen.
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 TSL, THL 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
Year ended 31 December finance GBP'000 Publishing Other Total
2021 GBP'000 GBP'000 GBP'000 GBP'000
========================== ========== ================ ============ ========== =========
Gross revenue 1,878 4,133 7,104 - 13,115
Cost of sales (832) (873) (4,509) - (6,214)
---------- ---------------- ------------ ---------- ---------
Net revenue 1,046 3,260 2,595 - 6,901
---------- ---------------- ------------ ---------- ---------
Adjusted loss before tax* (3,877) (548) (1,439) (2,488) (8,352)
Loss before tax (3,877) (548) (1,439) (2,558) (8,422)
Taxation 367 175 444 - 986
Loss for the year (3,510) (373) (995) (2,558) (7,436)
========== ================ ============ ========== =========
Total assets 24,607 8,331 16,774 1,016 50,728
Total liabilities (13,341) (1,747) (2,184) (1,005) (18,277)
---------- ---------------- ------------ ---------- ---------
Net assets 11,266 6,584 14,590 11 32,451
========== ================ ============ ========== =========
*adjusted loss before tax excludes share-based payment
expense
Short term Payment services
Year ended 31 December finance GBP'000 Publishing Other Total
2020 GBP'000 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 loss before tax* (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 year (3,276) (3,615) (2,472) (2,040) (11,403)
========== ================ ============ ========== =========
Total assets 22,798 7,430 17,765 9,573 57,566
Total liabilities (11,276) (1,858) (3,559) (1,137) (17,830)
---------- ---------------- ------------ ---------- ---------
Net assets 11,522 5,572 14,206 8,436 39,736
---------- ---------------- ------------ ---------- ---------
5. Staff costs
Analysis of staff costs:
Group Company
================== ==================
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
================================= ======== ======== ======== ========
Wages and salaries 9,011 9,311 1,440 1,327
Consulting costs 395 313 19 -
Social security costs 1,409 1,019 355 22
Pension costs arising on defined
contribution schemes 428 442 27 26
Share based payment 70 545 70 545
Government grants (28) (98) - -
-------- -------- -------- --------
11,285 11,532 1,911 1,920
======== ======== ======== ========
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:
2021 2020
Number Number
================== ================== =======
Management 16 17
Finance 7 8
Sales & marketing 23 33
Operations 36 37
Technology 54 54
------------------ -------
136 149
================== =======
Directors' emoluments
The number of directors who received share options during the
year was as follows:
2021 2020
Number Number
=========================== ================== =======
Long term incentive schemes - -
There were no directors who exercised share options during the
year.
The directors' aggregate emoluments in respect of qualifying
services were:
Salary Bonus Pension 2021 2020
and Benefits Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
===================== ======== ======== ============= ======== ========
Executive Directors:
J v d Bergh 256 200 9 465 735
S H Kenner* - - - - 97
256 200 9 465 832
======== ======== ============= ======== ========
* S H Kenner left the Group in June 2020
Salary Bonus Pension 2021 2020
and Benefits Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------- -------- ------------- -------- --------
Non-executive
Directors:
S Baldwin 100 - - 100 85
P Judd 70 - - 70 65
P Dentskevich 50 - - 50 50
220 - - 220 200
======== ======== ============= ======== ========
Key management
The Directors consider that key management personnel include the
Executive Director of TruFin plc. This individual has the authority
and responsibility for planning, directing and controlling the
activities of the Group.
6. Employee share-based payment transactions
The employment share-based payment charge comprises:
2021 2020
GBP'000 GBP'000
================================================= ======== ========
Performance Share Plan and Joint Share Ownership
Plan Founder Award 59 465
Performance Share Plan Market Value Award 11 80
Performance Share Plan 2019 Award - -
Performance Share Plan 2018 Award - -
Total 70 545
======== ========
Performance Share Plan and Joint Share Ownership Plan Founder
Award ("Founder Award")
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")
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 Employers
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 Join Share Ownership Plan
became fully owned by 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 GBP0.68. As a
result, 395,560 shares subject to the Join Share Ownership Plan
became fully owned by 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
Award")
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
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 Award")
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 shares, but the performance condition now relates solely to
the business of Oxygen
In 2019, PSP 2018 Awards in respect of 736,843 shares lapsed
following members of senior management leaving the Group and
changing roles.
The fair value of the unvested part of the award as at 31
December 2021 was deemed to be nil as it is highly improbable that
the vesting conditions will be met.
Performance Share Plan 2019 Award ("PSP 2019 Award")
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. The fair value of the award as at 31 December
2021 was deemed to be nil as it is highly improbable that the
vesting conditions will be met.
Details of share based awards during the year:
JSOP Founder PSP Founder PSP Market
Award* Award* Value
-------------------------------- ------------ ----------- -----------
Type of instrument granted Shares (#) Options (#) Options (#)
Outstanding at 1 January 2021 791,118 1,566,255 4,868,420
Granted during the year - - -
Vested during the year (395,560) - -
Exercised during the year - - -
------------ ----------- -----------
Outstanding at 31 December 2021 359,558 1,566,255 4,868,420
============ =========== ===========
Exercisable at 31 December 2021 1,170,697 -
=========== ===========
*The JSOP Founder Awards and PSP Founder Awards will together
deliver, in aggregate, a maximum of 3,407,895 TruFin shares.
PSP 2018 PSP 2019
-------------------------------- ----------- -----------
Type of instrument granted Options (#) Options (#)
Outstanding at 1 January 2021 263,158 320,000
Granted during the year - -
Vested during the year - -
Exercised during the year - -
Cancelled during the year - -
----------- -----------
Outstanding at 31 December 2021 263,158 320,000
=========== ===========
Exercisable at 31 December 2021 - -
=========== ===========
No options expired during the year.
The weighted average remaining contractual life for the share
options outstanding as at 31 December 2021 was 6.21 years (2020:
7.21 years).
7. Net impairment loss on financial assets
2021 2020
GBP'000 GBP'000
================================ ======================= ========
At 1 January 10 123
Charge for impairment loss (10) (11)
Amounts written off in the year 8 (102)
Amounts recovered in the year (4) -
At 31 December 4 10
======================= ========
At 31 December 2021, the Group had an impairment balance of
GBP4,000 which was allocated against loans and advances. At 31
December 2020, all of the impairment balance was allocated against
loans and advances.
The net impairment charge on financial assets during the year
ended 31 December 2021 all related to loans and advances.
The net impairment charge on financial assets during the year
ended 31 December 2020 all related to loans and advances.
8. Loss before income tax
Loss before income tax is stated after charging:
2021 2020
GBP'000 GBP'000
============================================== ======================= ========
Depreciation of property, plant and equipment 96 128
Amortisation of intangible assets 1,571 1,209
Staff costs including share based payments
charge 11,285 11,532
Crowe LLP) (2018: Deloitte LLP)
2021 2020
Fees payable to the Group's auditor (Crowe GBP'000 GBP'000
U.K. LLP)
============================================= ======================= ========
Fees payable for the audit of the company's
annual accounts 45 44
Fees payable for the audit of the company's
subsidiaries 84 83
----------------------- --------
Total audit fees 129 127
======================= ========
Non audit services
Other assurance services 13 12
----------------------- --------
Total non-audit fees 13 12
======================= ========
9. Taxation
Analysis of tax charge recognised in the period
2021 2020
GBP'000 GBP'000
============================= ======================= ========
Current tax (credit)/charge (726) 16
Deferred tax (credit)/charge (260) 2,460
----------------------- --------
Total tax (credit)/charge (986) 2,476
======================= ========
Reconciliation of loss before tax to total tax credit
recognised
2021 2020
Group GBP'000 GBP'000
================================================= ======================== ========================
Loss before tax (8,422) (8,927)
Loss before tax multiplied by the standard
rate of corporation tax in the UK of 19% (2020:
19%) (1,600) (1,696)
Tax effect of:
Expenses not deductible (223) 161
Depreciation in excess of capital allowances 395 132
Capital allowances (187) (57)
Other short term timing differences (5) (129)
R&D tax credit (733) -
Deferred tax not recognised 1,367 4,064
Effect of different tax rates of subsidiaries
operating in other jurisdictions - 1
------------------------ ------------------------
Total tax charge (986) 2,476
======================== ========================
2021 2020
Company GBP'000 GBP'000
================================================= ======================== ========================
Loss before tax (409) (704)
Loss before tax multiplied by the standard
rate of corporation tax in the UK of 19% (2020:
19%) (78) (134)
Tax effect of:
Expenses not deductible 32 169
Other short term timing differences - (133)
Deferred tax not recognised 46 98
Total tax charge - -
======================== ========================
The UK Government enacted changes to the UK tax rate in 2020,
resulting in the rate remaining at 19% (instead of the previously
intended reduction from 19% to 17% from 1 April 2020). In the
Finance Bill 2021, the UK chancellor announced that legislation
would be proposed to increase the main rate of corporation tax to
25% from 1 April 2023, and this was substantively enacted on 24 May
2021.
The deferred tax assets and liabilities at 31 December 2021 have
been based on the rates substantively enacted at the reporting
date.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
Deferred tax asset
2021 2020
Group GBP'000 GBP'000
================================================== ======================= ========
Balance at start of the year 43 2,503
Credit/(charge) to the statement of comprehensive
income 260 (2,460)
----------------------- --------
Balance at end of the year 303 43
======================= ========
Comprised of:
Losses 303 43
----------------------- --------
Total deferred tax asset 303 43
======================= ========
A deferred tax asset from losses in Vertus Capital Limited was
recognised, to be used against profits in Vertus Capital SPV 1,
which became profitable in the prior year. Unutilised tax losses in
the remainder of the Group as at the reporting date were
GBP77,124,000 (2020:GBP69,496,000).
10. Intangible assets
Client contracts Separately
Software identifiable
licenses intangible
and similar Assets Goodwill Total
assets
Group 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 1,056 757 - (50) 1,763
Disposals (256) - - - (256)
Exchange differences 1 (12) - - (11)
-------------
At 31 December 2021 5,490 2,579 1,642 15,746 25,457
================== ================== ============= ========== =======
Amortisation
At 1 January 2021 (956) (814) (742) - (2,512)
Charge (873) (370) (328) - (1,571)
Disposals 222 - - - 222
Exchange differences - 3 - - 3
-------------
At 31 December 2021 (1,607) (1,181) (1,070) - (3,858)
================== ================== ============= ========== =======
Accumulated impairment
losses
At 1 January 2021 (408) - - - (408)
At 31 December 2021 (408) - - - (408)
================== ================== ============= ========== =======
Net book value
------------------ ------------------ ------------- ---------- -------
At 31 December 2021 3,475 1,398 572 15,746 21,191
================== ================== ============= ========== =======
At 31 December 2020 3,325 1,020 900 15,796 21,041
================== ================== ============= ========== =======
Client contracts Separately
Software identifiable
licenses intangible
and similar Assets Goodwill Total
assets
Group 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
================== ================== ============= ========== =======
The Company had no intangibles assets at the year end.
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.
The Group performed an impairment review at 31 December 2021 and
there was no impairment in relation to underperforming
contracts.
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.
The Group performed an impairment review at 31 December 2021 and
concluded no impairment was required.
The 'Software, licenses and similar assets' net book value
balance related to internally generated intangible assets at 31
December 2021 was GBP1,398,000 (2020: GBP1,020,000). This consists
of cost of GBP2,579,000 (2020: GBP1,834,000) and accumulated
amortisation of GBP1,181,000 (2020: GBP814,000). During the year
there were additions of GBP757,000 (2020: GBP725,000) and
amortisation of GBP370,000 (2020: GBP343,000).
Goodwill and "Separately identifiable intangible assets" arise
from acquisitions made by the Group.
Porge (now Insight Services within OFL)
Porge was acquired by OFGL in August 2018 and goodwill of
GBP2,759,000 that arose from this acquisition was included within
the payments services segment of the Group. Following the
acquisition, separately identifiable intangible assets of
GBP1,387,000 primarily relating to the value of the contracts in
the business at acquisition were recognised. These are being
amortised over 5 years resulting in an amortisation charge of
GBP277,000 (2020: GBP277,000) during the year. Net Book value of
these assets at 31 December 2021 was GBP439,000 (2020: GBP717,000).
Goodwill related to this transaction excluding these assets at 31
December 2021 was GBP1,372,000 (2020: GBP1,372,000).
On 31 August 2020, OFL purchased the Trade and Assets of Porge.
The purchase price was set at the Net book value of the assets
acquired at the time of the transaction.
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. 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
GBP51,000 (2020: GBP51,000). Net Book value of these assets at 31
December 2021 was GBP132,000 (2020: GBP183,000).
During the year, the Group increased its ownership of Vertus
Capital from 51% to 53.8%. ,This resulted in a GBP50,000 adjusted
to Goodwill related to Vertus (excluding the assets mentioned
above). Goodwill related to Vertus excluding these assets at 31
December 2021 was GBP1,409,000 (2020: GBP1,459,000).
Playstack
In September 2019, the Group converted into ordinary shares its
existing convertible loans with Playstack Ltd in full satisfaction
and discharge of the loans. This gave the Group ownership of
Playstack Ltd and the other companies within the Playstack
Group.
Goodwill of GBP12,965,000 arose from this transaction and has
been included within the publishing segment of the business.
Impairment testing of intangibles
An impairment review of goodwill was carried out at the year
end.
The insight services segment of OFL was valued using the
discounted cash flow methodology. Its net earnings were forecasted
to 2025, a discount rate of 12% was used and terminal growth rate
of 2%. This valuation was greater than the amount of CGU and
therefore the goodwill is not deemed to be impaired.
Vertus was valued using the discounted cash flow methodology.
The net earnings of Vertus were forecasted to 2030, a discount rate
of 12% was used and terminal growth rate of 3%. The valuation of
Vertus was greater than the amount of goodwill and therefore the
goodwill is not deemed to be impaired.
Playstack was valued using the discounted cash flow methodology.
The net earnings of Playstack were forecasted to 2030, a discount
rate of 20% was used and terminal growth rate of 3%. The valuation
of Playstack was greater than the amount of goodwill and therefore
the goodwill is not deemed to be impaired.
11. 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 2021 52 60 429 541
Additions 2 22 - 24
Disposals - (4) - (4)
Exchange differences (1) - (1)
At 31 December 2021 53 78 429 560
--------- ---------- ------------ -------
Depreciation
At 1 January 2021 (36) (26) (339) (401)
Charge (8) (20) (68) (96)
Disposals - 2 - 2
At 31 December 2021 (44) (44) (407) (495)
--------- ---------- ------------ -------
Net book value
--------- ---------- ------------ -------
At 31 December 2021 9 34 22 65
========= ========== ============ =======
At 31 December 2020 16 34 90 140
========= ========== ============ =======
Leasehold Fixtures Computer Right-of-Use
improvements & equipment Asset Total
fittings
Group 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
============= ========= ========== ============ =======
Computer equipment Right-of-use
asset Total
Company GBP'000 GBP'000 GBP'000
==================== ========================= =================== ===============
Cost
At 1 January 2021 3 167 170
Additions - - -
At 31 December 2021 3 167 170
------------------------- ------------------- ---------------
Depreciation
At 1 January 2021 (3) (167) (170)
Charge - - -
------------------------- ------------------- ---------------
At 31 December 2021 (3) (167) (170)
------------------------- ------------------- ---------------
Net book value
------------------------- ------------------- ---------------
At 31 December 2021 - - -
========================= =================== ===============
At 31 December 2020 - - -
========================= =================== ===============
Computer equipment Right-of-use
asset Total
Company GBP'000 GBP'000 GBP'000
==================== ========================= =================== =================
Cost
At 1 January 2020 3 167 170
Additions - - -
At 31 December 2020 3 167 170
------------------------- ------------------- -----------------
Depreciation
At 1 January 2020 (2) (167) (169)
Charge (1) - (1)
------------------------- ------------------- -----------------
At 31 December 2020 (3) (167) (170)
------------------------- ------------------- -----------------
Net book value
------------------------- ------------------- -----------------
At 31 December 2020 - - -
========================= =================== =================
At 31 December 2019 1 - 1
========================= =================== =================
The Right of use assets in the Group and Company relates to
leases for office buildings.
12. Investment in subsidiaries
Company GBP'000
=============================================== =======
Balance at 1 January 2021 and 31 December 2021 30,189
Balance at 1 January 2020 and 31 December 2020 30,189
13. Loans and advances
2021 2020
Group GBP'000 GBP'000
========================= ======================= ========
Total loans and advances 16,137 14,670
Less: loss allowance (4) (10)
16,133 14,660
======================= ========
The aging of loans and advances are analysed as follows:
2021 2020
GBP'000 GBP'000
============================== ======================= ========
Neither past due nor impaired 16,062 14,401
Past due: 0-30 days 32 254
Past due: 31-60 days 10 2
Past due: 61-90 days 28 -
Past due: more than 91 days 1 3
16,133 14,660
======================= ========
The Company had no loans and advances at the year end (2020:
GBPnil).
14. Trade and other receivables
Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade and other receivables 2,585 1,992 - -
Prepayments 467 421 52 39
Accrued Income 385 263 - -
VAT - - 33 15
Other debtors 1,988 1,278 5 7
Amounts due from Group
Undertakings - - 54 597
5,425 3,954 144 658
======== ======== ======== ========
Trade receivables above are stated net of a loss allowance of
GBPnil (2020: GBPnil). All receivables are due within one year.
The aging of trade receivables is analysed as follows:
Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Not yet due 2,182 1,411 - -
Past due: 0-30 days 96 121 - -
Past due: 31-60 days 88 92 - -
Past due: 61-90 days 13 50 - -
Past due: more than
91 days 206 318 - -
2,585 1,992 - -
======== ======== ======== ========
15. Share capital
Share Capital Total
Group and Company GBP'000 GBP'000
======================================= =============== =========
80,822,204 shares at GBP0.91 per share 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 year ended 31 December 2021.
16. Borrowings
2021 2020
Group GBP'000 GBP'000
=========================== ======================= ========
Loans due within one year 1,634 2,204
Loans due in over one year 11,351 8,507
12,985 10,711
======================= ========
Movements in borrowings during the year
The below table identifies the movements in borrowings during
the year.
Group GBP'000
============================ ========================
Balance at 1 January 2021 10,711
Funding drawdown 5,725
Interest expense 528
Origination fees paid (211)
Fee amortisation 141
Repayments (3,371)
Interest paid (506)
Loan written off (13)
Exchange differences (19)
------------------------
Balance at 31 December 2021 12,985
========================
Group GBP'000
============================ ========================
Balance at 1 January 2020 6,194
Funding drawdown 5,840
Interest expense 279
Origination fees paid (2)
Fee amortisation 133
Repayments (1,458)
Interest paid (275)
------------------------
Balance at 31 December 2020 10,711
========================
The primary borrowings of the Group are comprised of the
following:
-- A 24-month revolving facility agreement with a 12-month
term-out period, maturing in September 2024. This facility incepted
in September 2019 and was renewed in November 2021. Interest is
payable monthly with the principal balance rolled over monthly,
subject to ongoing compliance with the agreement. This facility is
secured by a debenture over all assets of Vertus Capital.
-- Unsecured interest bearing facility due in 2028, with
interest payable quarterly. This facility was renewed during the
current year with the maturity date extended from 2026 to 2028.
-- A revolving credit facility under which notice is given by
either the lender (3 months) or borrower (6 months). The facility
is secured by a fixed and floating charge over Satago SPV1 and
interest is payable monthly.
The Company had no borrowings during the period or at year
end.
17. Trade and other payables
Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 380 1,553 5 32
Accruals 3,949 4,179 670 569
Other payables 103 247 - 2
Corporation tax 9 1 - -
Other taxation and social
security 706 960 353 539
VAT 145 179 - -
-------- -------- -------- --------
5,292 7,119 1,028 1,142
======== ======== ======== ========
18. Financial instruments
The Directors have performed an assessment of the risks
affecting the Group through its use of financial instruments and
believe the principal risks to be: capital risk; credit risk, and
market risk including interest rate risk.
This note describes the Group's objectives, policies and
processes for managing the material risks and the methods used to
measure them. The significant accounting policies regarding
financial instruments are disclosed in note 1.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as going concerns while providing an
adequate return to shareholders.
The capital structure of the Group consists of borrowings
disclosed in note 16 and equity of the Group (comprising issued
capital, reserves, retained earnings and non-controlling interests
as disclosed in note 15 and note 19).
The Group is not subject to any externally imposed capital
requirements.
Principal financial instruments
The principal financial instruments to which the Group is party
and from which financial instrument risk arises, are as
follows:
-- Loans and advances, primarily credit risk and liquidity
risk;
-- Trade receivables, primarily credit risk and liquidity
risk;
-- Investments, primarily fair value or market price risk;
-- Cash and cash equivalents, which can be a source of credit
risk but are primarily liquid assets available to further business
objectives or to settle liabilities as necessary;
-- Trade and other payables; and
-- Borrowings which are used as sources of funds and to manage
liquidity risk.
Analysis of financial instruments by valuation model
There are no financial assets or liabilities included in the
statement of financial position at fair value.
31 December 2021
Financial assets and financial liabilities included in the
statement of financial position that are not measured at fair
value:
Carrying Fair
Group amount value Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============ =================== ================== =================== =================== ===================
Financial assets not measured
at fair value
Loans and
advances 16,133 16,133 - - 16,133
Trade
receivables 2,585 2,585 - - 2,585
Other
receivables 2,373 2,373 - - 2,373
Cash and
cash
equivalents 7,608 7,608 7,608 - -
=================== ================== =================== =================== ===================
28,699 28,699 7,608 - 21,091
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Borrowings 12,985 12,985 - - 12,985
Trade, other
payables
and
accruals 4,672 4,672 - - 4,672
=================== ================== =================== =================== ===================
17,657 17,657 - - 17,657
=================== ================== =================== =================== ===================
31 December 2020
Carrying Fair
Group amount value Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============ =================== ================== =================== =================== ===================
Financial assets not measured
at fair value
Loans and
advances 14,660 14,660 - - 14,660
Trade
receivables 1,992 1,992 - - 1,992
Other
receivables 1,541 1,541 - - 1,541
Cash and
cash
equivalents 17,728 17,728 17,728 - -
=================== ================== =================== =================== ===================
35,921 35,921 17,728 - 18,193
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Borrowings 10,711 10,711 - - 10,711
Trade, other
payables
and
accruals 6,578 6,578 - - 6,578
=================== ================== =================== =================== ===================
17,289 17,289 - - 17,289
=================== ================== =================== =================== ===================
31 December 2021
Carrying Fair
Company amount value Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============= =================== ================== =================== =================== ===================
Financial assets not measured at fair
value
Amounts owed
by group
undertakings 46,919 46,919 - - 46,919
Other
receivables 92 92 - - 92
Cash and cash
equivalents 786 786 786 - -
=================== ================== =================== =================== ===================
47,797 47,797 786 - 47,011
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Trade, other
payables
and accruals 1,028 1,028 - - 1,028
=================== ================== =================== =================== ===================
1,028 1,028 - - 1,028
=================== ================== =================== =================== ===================
31 December 2020
Carrying Fair
Company amount value Level 1 Level 2 Level 3
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============= =================== ================== =================== =================== ===================
Financial assets not measured at fair
value
Amounts owed
by group
undertakings 47,066 47,066 - - 47,066
Other
receivables 619 619 - - 619
Cash and cash
equivalents 578 578 578 - -
=================== ================== =================== =================== ===================
48,263 48,263 578 - 47,685
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Trade, other
payables
and accruals 1,142 1,142 - - 1,142
=================== ================== =================== =================== ===================
1,142 1,142 - - 1,142
=================== ================== =================== =================== ===================
Fair values for level 3 assets and liabilities were calculated
using a discounted cash flow model and the Directors consider that
the carrying amounts of financial assets and liabilities recorded
at amortised cost in the financial statements approximate to their
fair values.
Loans and advances
Due to the short-term nature of loans and advances and/or
expected credit losses recognised, their carrying value is
considered to be approximately equal to their fair value.
Trade and other receivables, borrowings, trade and other
payables, and accruals
These represent short term receivables and payables and as such
their carrying value is considered to be equal to their fair
value.
Financial risk management
The Group's activities and the existence of the above financial
instruments expose it to a variety of financial risks.
The Board of Directors has overall responsibility for the
determination of the Group's risk management objectives and
policies. The overall objective of the Board of Directors is to set
policies that seek to reduce ongoing risk as far as possible
without unduly affecting the Group's competitiveness and
flexibility.
The Group is exposed to the following financial risks:
-- Credit risk
-- Liquidity risk
-- Market risk
-- Interest rate risk
Further details regarding these policies are set out below.
Credit risk
Credit risk is the risk that a customer or counterparty will
default on its contractual obligations resulting in financial loss
to the Group. One of the Group's main income generating activities
is lending to customers and therefore credit risk is a principal
risk. Credit risk mainly arises from loans and advances. The Group
considers all elements of credit risk exposure such as counterparty
default risk, geographical risk and sector risk for risk management
purposes.
Credit risk management
The credit committees within the wider Group are responsible for
managing the credit risk by:
-- Ensuring that it has appropriate credit risk practices,
including an effective system of internal control;
-- Identifying, assessing and measuring credit risks across the
Group from an individual instrument to a portfolio level;
-- Creating credit policies to protect the Group against the
identified risks including the requirements to obtain collateral
from borrowers, to perform robust ongoing credit assessment of
borrowers and to continually monitor exposures against internal
risk limits;
-- Limiting concentrations of exposure by type of asset,
counterparty, industry, credit rating, geographical location;
-- Establishing a robust control framework regarding the
authorisation structure for the approval and renewal of credit
facilities;
-- Developing and maintaining the risk grading to categorise
exposures according to the degree of risk of default. Risk grades
are subject to regular reviews; and
-- Developing and maintaining the processes for measuring
Expected Credit Loss (ECL) including monitoring of credit risk,
incorporation of forward-looking information and the method used to
measure ECL.
Significant increase in credit risk
The Group continuously monitors all assets subject to Expected
Credit Loss as to whether there has been a significant increase in
credit risk since initial recognition, either through a significant
increase in Probability of Default ("PD") or in Loss Given Default
("LGD").
The following is based on the procedures adopted by the
Group:
Granting of credit
The Business Development Team prepare a Risk Summary which sets
out the rationale and the pricing for the proposed loan facility
and confirms that it meets the Group's product risk and pricing
policies. The Application will include the proposed counterparty's
latest financial information and any other relevant information but
as a minimum:
-- Details of the limit requirement e.g. product, amount, tenor,
repayment plan etc.;
-- Facility purpose or reason for increase;
-- Counterparty details, background, management, financials and
ratios (actuals and forecast);
-- Key risks and mitigants for the application;
-- Conditions, covenants & information (and monitoring
proposals) and security (including comments on valuation);
-- Pricing;
-- Confirmation that the proposed exposure falls within risk
appetite; and
-- Clear indication where the application falls outside of risk
appetite.
The Credit Risk Department will analyse the financial
information, obtain reports from credit reference agencies,
allocate a risk rating and make a decision on the application. The
process may require further dialogue with the Business Development
Team to ascertain additional information or clarification.
Each mandate holder and Committee is authorised to approve loans
up to agreed financial limits provided that the risk rating of the
counterparty is within agreed parameters. If the financial limit
requested is higher than the credit authority of the first reviewer
of the loan facility request, the application is sent to the next
credit authority level with a recommendation.
The Executive Risk Committee reviews all applications that are
outside the credit approval mandate of the mandate holder due to
the financial limit requested or if the risk rating is outside of
policy but there is a rationale and/or mitigation for considering
the loan on an exceptional basis.
Applications where the counterparty has a high-risk rating are
sent to the Executive Risk Committee for a decision based on a
positive recommendation from the Credit Risk department. Where a
limited company has such a risk rating, the Executive Risk
Committee will consider the following mitigants:
-- Existing counterparty which has met all obligations in time
and in accordance with loan agreements,
-- Counterparty known to Group personnel who can confirm
positive experience,
-- Additional security, either tangible or personal guarantees
where there is verifiable evidence of personal net worth,
-- A commercial rationale for approving the application,
although this mitigant will generally be in addition to at least
one of the other mitigants.
Identifying significant increases in credit risk
The Group measures a change in a counterparty's credit risk
mainly on payment, on updated from credit reference agencies and
adverse changes with a counterparty's debtors. The Group views a
significant increase in credit risk as:
-- A two-notch reduction in the Group's counterparty's risk
rating since origination, as notified through the credit rating
agency;
-- A counterparty defaults on a payment due under a loan agreement;
-- Late contractual payments which although cured, re-occur on a regular basis;
-- Evidence of a reduction in a counterparty's working capital
facilities which has had an adverse effect on its liquidity; or
-- Evidence of actual or attempted sales out of trust or of
double financing of assets funded by the Group.
-- Deterioration in the underlying business (held as part of the
security package) indicated through significant loss of revenue and
higher than average client attrition.
An increase in significant credit risk is identified when any of
the above events happen after the date of initial recognition.
Default
Identifying loans and advances in default and credit
impaired
The Group's definition of default for this purpose is:
-- A counterparty defaults on a payment due under a loan
agreement and that payment is overdue on its terms, or
-- The collateral that secures, all or in part, the loan
agreement has been sold or is otherwise not available for sale and
the proceeds have not been paid to the lending company, or
-- A counterparty commits an event of default under the terms
and conditions of the loan agreement which leads the lending
company to believe that the borrower's ability to meet its credit
obligations to the lending company is in doubt.
Exposure at default
Exposure at default ("EAD") is the expected loan balance at the
point of default and, for the purpose of calculating the Expected
Credit Losses ("ECL"), management have assumed this to be the
balance at the reporting date.
Expected Credit Losses
The ECL on an individual loan is based on the credit losses
expected to arise over the life of the loan, being defined as the
difference between all the contractual cash flows that are due to
the Group and the cash flows that it actually expects to
receive.
This difference is then discounted at the original effective
interest rate on the loan to reflect the disposal period of
underlying collateral.
Regardless of the loan status stage, the aggregated ECL is the
value that the Group expects to lose on its current loan book
having assessed each loan individually.
To calculate the ECL on a loan, the Group considers:
1. Counterparty PD; and
2. LGD on the asset
whereby: ECL = EAD x PD x LGD
Maximum exposure to credit risk
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 7,608 17,728 786 578
Loans and advances 16,133 14,660 - -
Amounts owed by group
undertakings - - 46,919 47,066
Trade and other receivables 4,958 3,532 144 658
======== ======== ======== ========
Maximum exposure to
credit risk 28,699 35,920 47,849 48,302
======== ======== ======== ========
Loans and advances:
Collateral held as security
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
================================= ======== -------- -------- ========
Fully collateralised
Loan-to-value* ratio:
Less than 50% 2 - - -
50% to 70% 83 75 - -
71% to 80% 192 163 - -
81% to 90% 142 2,185 - -
91% to 100% - - - -
======== ======== ======== ========
419 2,423 - -
======== ======== ======== ========
Partially collateralised
Collateral value relating
to loans over 100% loan-to-value - - - -
-------- -------- -------- --------
Unsecured lending 15,718 12,247 - -
======== ======== ======== ========
* Calculated using wholesale collateral values
Concentration of credit risk
The Group maintains policies and procedures to manage
concentrations of credit at the counterparty level and industry
level to achieve a diversified loan portfolio.
Credit quality
An analysis of the Group's credit risk exposure for loan and
advances per class of financial asset, internal rating and "stage"
is provided in the following tables. A description of the meanings
of stages 1, 2 and 3 is given in the accounting policies set out in
note 1.
2021 2020
Risk rating Stage 1 Stage 2 Stage 3 Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============= ------------------- ------------------- ------------------- ------------------ ---------------------
Above average
(risk
rating 1-2) 5,274 - - 5,274 6,360
Average (risk
rating
3-5) 10,863 - - 10,863 6,675
Below average
(risk
rating 6+) - - - - 1,635
------------------- ------------------- ------------------- ------------------ ---------------------
Gross
carrying
amount 16,137 - - 16,137 14,670
------------------- ------------------- ------------------- ------------------ ---------------------
Loss
allowance (4) - - (4) (10)
------------------- ------------------- ------------------- ------------------ ---------------------
Carrying
amount 16,133 - - 16,133 14,660
=================== =================== =================== ================== =====================
Total
Stage 1 Stage 2 Stage 3 GBP'000
Gross Carrying Amount GBP'000 GBP'000 GBP'000
====================== ==================== ==================== ==================== ====================
As at 1 January 2021 14,665 - 5 14,669
Transfer to stage
1 5 - (5) -
Transfer to stage - - - -
2
Transfer to stage - - - -
3
Net Loans originated 1,467 - - 1,468
As at 31 December
2021 16,137 - - 16,137
==================== ==================== ==================== ====================
Trade receivables
Status at reporting date
The Group has assessed the trade and other receivables in
accordance with IFRS 9 and determined that, at the balance sheet
date, the lifetime ECL is GBPnil (2020: GBPnil).
The contractual amount outstanding on financial assets that were
written off during the reporting period and are still subject to
enforcement activity is GBPnil at 31 December 2021 (2020:
GBPnil).
Liquidity risk
Liquidity risk is the risk that the Group does not have
sufficient financial resources to meet its obligations as they fall
due or will have to do so at an excessive cost. This risk arises
from mismatches in the timing of cash flows which is inherent in
all banking operations and can be affected by a range of Group
specific and market-wide events.
Liquidity risk management
Group Finance performs treasury management for the Group, with
responsibility for the treasury for each business entity being
delegated to the individual subsidiaries. However, in line with the
wider Group governance structure, Group Finance performs an
important oversight role in the wider treasury considerations of
the Group. The primary mechanism for maintaining this oversight is
a formal requirement that subsidiaries' Finance teams notify all
material Treasury matters to Group Finance.
The main Group responsibilities are to maintain banking
relationships, manage and maximise the efficiency of the Group's
working capital and long-term funding and ensure ongoing compliance
with banking arrangements. The Group currently does not have any
offsetting arrangements.
Liquidity stress testing
The Group regularly conducts liquidity stress tests, based on a
range of different scenarios to ensure it can meet all of its
liabilities as they fall due.
Maturity analysis for financial assets and financial
liabilities
The following maturity analysis is based on expected gross cash
flows.
As at 31 December Carrying Less 1-3 months 3 months 1-5 years >5 years
2021 Amount than GBP'000 to 1 GBP'000
GBP'000 1 month year GBP'000
GBP'000 GBP'000
----------------------- --------- --------- ----------- --------- ---------- ---------
Financial Assets
Cash and cash
equivalents 7,608 7,608 - - - -
Trade and other
receivables 4,958 2,717 690 392 1,159 -
Loans and advances 16,133 740 660 3,158 11,197 378
28,699 11,065 1,350 3,550 12,356 378
========= ========= =========== ========= ========== =========
Financial Liabilities
Trade payables,
other payables
and accruals 4,672 1,203 2,414 1,055 - -
Borrowings 12,985 48 - 1,602 7,835 3,500
--------- --------- ----------- --------- ---------- ---------
17,657 1,251 2,414 2,657 7,835 3,500
========= ========= =========== ========= ========== =========
Market risk
Market risk is the risk that movements in market factors, such
as foreign exchange rates, interest rates, credit spreads, equity
prices and commodity prices will reduce the TruFin Group's income
or the value of its portfolios.
Market risk management
The TruFin Group's management objective is to manage and control
market risk exposures in order to optimise return on risk while
ensuring solvency.
The core market risk management activities are:
-- The identification of all key market risk and their
drivers,
-- The independent measurement and evaluation of key market
risks and their drivers,
-- The use of results and estimates as the basis for the TruFin
Group's risk/return-oriented management, and
-- Monitoring risks and reporting on them.
Interest rate risk management
The TruFin Group is exposed to the risk of loss from
fluctuations in the future cash flows or fair values of financial
instruments because of the change in market interest rates.
Interest rate risk
Interest rates on loans and advances are charged at competitive
rates given current market condition. Should rates fluctuate, this
will be reviewed and pricing will be adjusted accordingly.
Vertus's has interest income that is variable in relation to the
Bank of England base rate, and interest expense variable to both
LIBOR and the Bank of England base rate.
19. Non-controlling interests
The summarised financial information below represents financial
information for each subsidiary that has non-controlling interest
that are material to the Group. The amounts disclosed for each
subsidiary are before intragroup eliminations.
The Group's ownership share Vertus Capital and Vertus SPV1 at
the reporting date was 53.8% (2020: 51.0%).
Statement of Vertus Capital Vertus SPV1
Financial
Position
------------------------------------------------ ----------------------------------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
================ ----------------------- ----------------------- ====================== ======================
Current assets 5,005 4,670 15,740 12,538
Non-current
assets 5 5 - -
Current
liabilities 94 (144) (15,746) (12,731)
Equity
attributable to
owners of the
Company 2,747 2,311 (3) (98)
Non-controlling
interests 2,357 2,220 (3) (95)
Income Statement Vertus Capital Vertus SPV1
------------------------------------------------ ----------------------------------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
================ ----------------------- ----------------------- ====================== ======================
Revenue 522 469 1,380 1,018
Expenses (436) (623) (1,193) (940)
Profit/(loss)
after tax 86 (154) 187 78
Profit/(loss)
after tax
attributable to
owners
of the Company 46 (79) 100 40
Profit/(loss)
after tax
attributable to
the
non-controlling
interests 40 (75) 87 38
Cash Flow Statement Vertus Capital Vertus SPV1
------------------------------------------------ ----------------------------------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
==================== ----------------------- ----------------------- ====================== ======================
Net cash used in
operating
activities (520) (390) (2,922) (2,035)
Net cash used in
investing
activities 224 331 - -
Net cash generated
from
financing
activities 488 - 2,839 2,043
----------------------- ----------------------- ---------------------- ----------------------
Net
increase/(decrease)
in cash and cash
equivalents 192 (59) (83) 8
======================= ======================= ====================== ======================
Vertus Capital Vertus SPV1
------------------------------------------------ -----------------------------------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
============= ----------------------- ----------------------- ====================== =======================
Balance at 1
January 2,220 2,295 (95) (134)
Share of loss
for the
year 40 - 87 -
Change in NCI
due to
share
issuance in
the
year 97 (75) 5 39
Balance at 31
December 2,357 2,220 (3) (95)
======================= ======================= ====================== =======================
The Group had a 72% ownership share of Bandana Media Ltd during
the year.
2021 2020
Bandana Media Ltd GBP'000 GBP'000
============================================= ======================= =======================
Current assets 45 61
Current liabilities (5,258) (4,293)
Equity attributable to owners of the Company (3,773) (3,063)
Non-controlling interests (1,440) (1,169)
2021 2020
Bandana Media Ltd GBP'000 GBP'000
=================================================== ======================= =======================
Revenue - -
Expenses (981) (824)
Loss after tax (981) (824)
Loss after tax attributable to owners of the
Company (710) (596)
Loss after tax attributable to the non-controlling
interests (271) (228)
2021 2020
Bandana Media Ltd GBP'000 GBP'000
------------------------------------------ ------------------------ --------
Net cash used in operating activities - 1
------------------------ --------
Net decrease in cash and cash equivalents - 1
======================== ========
2021 2020
Bandana Media Ltd GBP'000 GBP'000
--------------------------- ------------------------ ------------------------
Balance at 1 January (1,169) (941)
Share of loss for the year (271) (228)
------------------------ ------------------------
Balance at 31 December (1,440) (1,169)
======================== ========================
The Group had a 94.1% effective economic ownership share of
Satago Financial Solutions Limited at the reporting date (2020:
93.7%).
2021 2020
Satago Financial Solutions Ltd GBP'000 GBP'000
============================================= ======================= =======================
Current assets 1,748 5,256
Non-current assets 631 631
Current liabilities (291) (713)
Equity attributable to owners of the Company 1,985 4,880
Non-controlling interests 103 294
2021 2020
Satago Financial Solutions Ltd GBP'000 GBP'000
=================================================== ======================= =======================
Revenue 198 591
Expenses (3,284) (3,508)
Loss after tax (3,086) (2,916)
Loss after tax attributable to owners of the
Company (2,905) (2,787)
Loss after tax attributable to the non-controlling
interests (181) (129)
2021 2020
Satago Financial Solutions Ltd GBP'000 GBP'000
------------------------------------------ ------------------------ --------
Net cash used in operating activities (3,965) (751)
Net cash used in investing activities 189 (305)
Net cash used in financing activities 2,731 -
------------------------ --------
Net decrease in cash and cash equivalents (1,044) (1,056)
======================== ========
2021 2020
Satago Financial Solutions Ltd GBP'000 GBP'000
------------------------------------------------ ------------------------ ------------------------
Balance at 1 January 294 -
NCI on grant of Satago MIP - 496
Share of loss for the year (181) (129)
Arising from change in non-controlling interest (10) (73)
------------------------ ------------------------
Balance at 31 December 103 294
======================== ========================
20. Leases
The carrying amounts of the right-of-use assets recognised and
the movements during the period are shown in note 11.
The lease liability and movement during the period were:
Group GBP'000
============================================= =========
Lease liability recognised at 1 January 2021 120
Interest 3
Payments (99)
---------
Balance at 31 December 2021 25
=========
21. 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 year.
The calculation of the basis and adjusted earnings per share is
based on the following data:
2021 2020
=============================================== =================== ==========
Number of shares (#)
At year end 80,822,204 80,822,204
Weighted average 80,822,204 80,822,204
Earnings attributable to ordinary shareholders GBP'000 GBP'000
Loss after tax attributable to the owners of
TruFin plc (7,071) (10,971)
Adjusted earnings attributable to ordinary
shareholders
Loss after tax attributable to the owners of
TruFin plc (7,071) (10,971)
Adjusted for share-based payment 70 545
Adjusted loss after tax attributable to the
owners of TruFin plc (7,001) (10,426)
Earnings per share* Pence Pence
Basic and Diluted (8.7) (13.6)
Adjusted(1) (8.7) (12.9)
* All Earnings per share figures are undiluted and diluted.
Adjusted(1) EPS excludes share-based payment expense and loss
from 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 years presented as the Group is loss making.
22. Related party disclosures
Transactions with Directors
Transactions with Directors, or entities in which a Director or
recent Director is also a Director or partner:
2021 2020
GBP'000 GBP'000
------------------------------------------------ -------- --------
Payment to an ex-Director - 359
Consultancy services provided by an ex-Director 21 29
Other related parties - 2
Key management personnel disclosures are provided in note 5 and
6.
During the year, the company 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
GBP148,000 (prior period: GBPNil).
23. Post balance sheet events
On 12 April 2022 the Company successfully completed a Placing
and Open offer resulting in 13,360,739 new ordinary shares being
issued in the Company at GBP0.75 per share, raising gross proceed
of c.GBP10m. Following issue of the new shares, the total number of
voting rights in the Company is 94,182,943.
Since the year end Lloyds Banking Group ("LBG") has completed an
investment of GBP5m of new equity capital in Satago, at a pre-money
valuation of GBP20m. 937,501 newly created B ordinary shares, with
a par value of GBP0.001 per share, were allotted for GBP5m cash
from LBG, representing 20% of the fully diluted share capital.
On 9 March 2022 TruFin agreed to vary the terms of an existing
GBP3 million loan to Satago so that it is convertible into equity
capital in Satago at the same valuation as the LBG investment or,
if a further funding round takes place, the valuation implied by
the funding round. Assuming conversion based on the GBP20 million
valuation (and assuming LBG does not subscribe for its pro rata
entitlement to shares), TruFin would hold approximately 68% of
Satago (on a fully diluted basis).
In addition on 9 March 2022 LBG confirmed its intention to enter
into a commercial agreement to licence Satago's software platform
for its Single Invoice Finance and whole of book Invoice Factoring
customers. Satago and LBG have signed a letter of intent.
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END
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