TIDMTRU TIDMTRU
RNS Number : 9831S
TruFin PLC
15 March 2023
15 March 2023
TruFin plc
("TruFin" or the "Company" or together with its subsidiaries
"TruFin Group" or the "Group")
FINAL RESULTS FOR THE 12 MONTHSED 31 DECEMBER 2022
Full year results highlight direction of travel
TruFin is pleased to announce its audited results for the 12
months ended 31 December 2022. 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 grew 23% to GBP16.1m (2021: GBP13.1m) driven
by significant revenue growth from three out of four
subsidiaries
-- Recurring software and licensing fees represented 84% of revenue (2021: 87%)
-- Gross profit margin grew to 69% (2021: 53%)
-- Loss Before Tax ("LBT") was GBP8.0m (2021: GBP8.4m)
-- Cash and cash equivalents at year end totalled GBP10.3m ( GBP3.9m unrestricted)
Company Highlights
-- Oxygen Finance Limited ("Oxygen") EBITDA increased 62% to GBP1.1m (2021: GBP0.7m)
-- Satago Financial Solutions Limited ("Satago") grew revenues
by more than 350% to GBP2.2m (2021: GBP0.5m) after its platform was
chosen to support invoice factoring solutions for Lloyds Bank plc
("Lloyds Bank" or the "Bank") customers
-- Playstack Limited ("Playstack") acquired Magic Fuel Games
Inc. ("Magic Fuel") and signed a concurrent technology contract
with a global technology platform
-- Vertus Capital Limited ("Vertus") grew its loan book by 38%
and revenues by 61% to GBP2.2m (2021: GBP1.4m)
Current Trading and Prospects
-- Group revenues in January 2023 were not less than GBP0.98m
(unaudited), growing 26% compared to January 2022
-- Oxygen Q1 revenues to date have experienced double digit
growth when compared to the same period in 2022
-- Satago delivered the trial phase to Lloyds Bank for a
digitised end-to-end invoice finance solution
-- Playstack has secured more than 5 games for release throughout 2023
-- Vertus's pipeline remains strong. Despite early loan
settlements dragging on loan book growth, revenues in January 2023
were up 83% versus January 2022
James van den Bergh , TruFin CEO, said:
"2022 was a significant year for the Group. Satago secured a
landmark contract and GBP5m equity investment from Lloyds, and soon
after signed an embedded finance and package deal with Sage. To win
such headline contracts in just 12 months is testament to the
quality of the offering Sinead McHale and her team have built and
gives shareholders a taste of what the future holds.
Oxygen, managed by Ben Jackson, yet again grew its client base,
revenues and EBITDA. Oxygen's key internal initiatives include
helping clients to purchase multiple products; it is thus very
pleasing to note that more clients than ever chose to purchase two
or more products during 2023. We expect this trend to continue. At
the point of value crystallisation, given its significant and
growing embedded revenue base, we felt justified in rejecting the
unsolicited bid for Oxygen in December 2022.
Meanwhile, 2023 is an important year for Playstack. Company CEO
Harvey Elliot has secured an eye-catching and enviable line up of
games and is looking to demonstrate the embedded value he has
created in recent years.
As always, Vertus is benefitting from the IFA market trend for
consolidation and continues to be skilfully managed by Matt
Marais.
We are excited by the future and the opportunities that lie
ahead and look forward to another year of significant
progress."
Enquiries:
TruFin plc
James van den Bergh, Chief Executive Officer 0203 743 1340
Kam Bansil, Investor Relations 07779 229508
Liberum Capital Limited (Nominated Adviser and Corporate broker)
Chris Clarke
Edward Thomas 0203 100 2000
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
.
Chair's Statement
I have great pleasure in presenting this year's Annual Report
and Accounts. It has been another year of very positive
developments for the Group's businesses despite the unfavourable
macro-economic headwinds that have once again dominated the last 12
months.
After more than a decade of monetary accommodation and
historically low interest rates, there has been a sea change in the
economic and financial climate. The economic legacy of Covid-19 has
been high inflation, as recovering demand coincided with disrupted
supply chains - exacerbated by rapid commodity price rises due to
the war in Ukraine. In response, central banks have pushed up
interest rates and withdrawn or reversed quantitative easing.
Although the market environment is unlikely to get easier
anytime soon, I am proud to say that the Group is continuing on its
growth trajectory and I am certain that the commitment and
determination of our employees will enable the Group to skilfully
navigate this more unpredictable environment, just as 2021 and 2022
saw TruFin prosper.
As anticipated in my statement last year, 2022 has been a year
of considerable growth for three out of four of our subsidiaries,
alongside landmark contracts and consolidation across the Group. We
head into 2023 set for further progress across multiple fronts.
The foundations for the Group's success were laid in previous
years, with the Group's value-creating shareholder restructure
following the sale of Arrowgrass' stake, a successful pivot towards
recurring software sales and licensing fees and a sustained
relentless focus on exemplary client service. These accomplishments
paved the way for an ambitious set of goals in 2022, which I am
happy to report have in the main been met, and allowed us to set
ever more challenging goals for 2023 and beyond.
Chief among TruFin's aims for the year was to see Satago
selected by Lloyds Bank plc ("Lloyds Bank" or the "Bank") as vendor
of choice to support its delivery of invoice financing - this was
achieved by early March. The same month saw the Group fulfil a
second key goal: strengthening its balance sheet with an
oversubscribed placing. These achievements sit alongside organic
growth and development across our businesses, positioning us for a
profitable future and increased value creation for
shareholders.
Highlights for 2022 include:
-- Satago signing landmark contracts with Lloyds Bank, to help
deliver invoice financing, and Sage, the leading small and
mid-sized business software provider, to embed Satago services in
certain products in the UK and Ireland
-- Oxygen delivering another year of profitable growth and
making its first dividend payment (of GBP0.25m) to the Group
-- Playstack acquisition and successful integration of Magic
Fuel Games Inc ("Magic Fuel"), a remote games development studio
based in San Francisco, USA
-- Vertus recording its second full year of profitability whilst
growing its loan book to GBP21.4m and increasing its revenues by
60% to GBP2.2m.
-- TruFin raising GBP10m via an oversubscribed placing and open
offer to existing and new shareholders
As I look back over a turbulent few years, I am once again
struck by the remarkable resilience of TruFin and its subsidiaries
while facing a global pandemic and ongoing macro-economic
uncertainty. The Group itself saw revenues increase by more than
23% last year, evidencing solid fundamentals underpinned by robust
cost controls and significant strategic progression.
The close of 2022 saw perhaps the clearest demonstration yet of
the value of - and shareholder belief in - our proposition. In late
December, TruFin's Board rejected a GBP26m indicative offer for
Oxygen, judging that it undervalued the business and its prospects.
It is immensely satisfying to see the hard work, vision and
execution of the Group recognised in this way and I have no doubt
that we will see further similar demonstrations in 2023 and
beyond.
As ever, I look forward to updating shareholders on our
continued progress throughout the year and my thanks go to all our
employees and shareholders, new and old, for their continued
support.
Steve Baldwin
Chair
CEO's Review
As our Chair has highlighted, 2022 was a year of important
structural development for TruFin.
Despite the macroeconomic headwinds and challenging inflationary
pressures, our subsidiaries grew their customer bases
significantly, strengthened their partnerships and have positioned
themselves for an exciting 2023 and beyond.
At our inaugural Capital Markets Day in October, we laid out our
medium-term vision for growth and sustainable profitability. With a
medium-term revenue target of GBP80-100m coupled with attractive
EBITDA margins, we are confident we will deliver significant value
to our shareholders.
It is also important to highlight that a key Group objective is
to create a stable environment for our subsidiaries, never more so
than amid a global liquidity crisis and ongoing interest rate
uncertainty. The success of our GBP10m placing and open offer in
April 2022, supported by 17 institutional shareholders, emphasises
TruFin's strong institutional shareholder backing. This ensures
that our subsidiaries are enviably well-placed to consolidate their
market leading positions in the years ahead.
2022 Group performance
Another Group strategic objective is to reorientate income so
that the majority comes from predictable and repeatable sources. In
2022, 84% of Group revenues came from fee and recurring software
and licencing fees with our capital light model positioning us to
generate the high EBITDA margins and return on equity that other
software-as-a-service ("SaaS") businesses enjoy.
Overall Group revenues increased by 23% in 2022. Within this,
Satago enjoyed revenue growth of more than 350% as a result of
income generated from contract wins with Lloyds Bank and Sage.
Vertus and Oxygen also grew strongly - 61% and 28% respectively -
continuing to follow their profitable growth trajectory. Playstack
meanwhile consolidated its position during the year; revenues
declined 11% due to the previously announced delay of a key console
game release. The rescheduled game launch is not expected to impact
the financial support that Playstack requires from TruFin.
The Group ended the year with a cash balance of GBP10.3m
(including cash of GBP5.6m in Satago and GBP0.8m in Vertus which
are not 100% owned).
Current trading and prospects
TruFin has meaningful targets for 2023 and Group revenues for
January 2023 were not less than GBP0.98m (unaudited), a 26%
increase over the same period in 2022.
The Group remains focused on delivering growth, profitability
and value crystallisation and is excited by the significant
opportunities that lie ahead.
Outlook
During 2022 the Group successfully completed several key
transactions, positioning ourselves to weather the global
macroeconomic storms. In this environment, global liquidity has
dried up and other market participants are now acting more
rationally. As others are forced to scrutinise their business
models more carefully, TruFin will continue to plough its own
course. We have steered two of our four businesses towards
profitability, with a third anticipated to do the same during
2023.
The Board's rejection of an unsolicited offer for Oxygen is a
sign of TruFin's strength. As others realise the embedded value and
barriers to entry within our businesses we expect to see further
interest and at the appropriate time expect to be rewarding our
shareholders with value-creating transactions.
We have intentionally invested in building lasting relationships
with our partners and we are beginning to see the fruits of these
investments. We work closely with local councils, FTSE100 companies
and global technology platforms - delivering software, services and
products to help meet their strategic requirements. The investments
we have made are paying off and will generate significant
shareholder returns in the future.
My annual 'thank you' to our shareholders is made on behalf of
the Board, our employees, partners and all stakeholders for their
support and faith during these turbulent times. I would also like
to take the opportunity to welcome Anders Wilhelmsen as a
non-executive director. His presence and expertise have proved
invaluable additions to the Board since his appointment in February
2022.
As always, there is a lot to do and a pile of wood to chop in
2023, but we are brimming with confidence and look forward to the
opportunities that lie ahead.
James van den Bergh
Chief Executive Officer
OXYGEN REVIEW
2022 performance
Oxygen delivered revenues of GBP5.3m, up 28% (2021: GBP4.1m),
with the increase driven by strong performance across all principal
revenue streams. This helped increase EBITDA profits by 62% to
GBP1.1m (2021: GBP0.7m).
Strong trading and working capital controls enabled Oxygen to
generate positive free cashflow - with no Group funding required -
and subsequently pay TruFin a maiden dividend of GBP0.25m.
New business continued to progress well; combined trade-spending
by Oxygen's early payment clients increased by GBP0.3bn, totalling
a record GBP24bn. Oxygen's SaaS product portfolio also expanded,
with new products creating incremental revenue. Over 27% of
Oxygen's local authority Early Payment Programme clients also
committed to at least one Oxygen SaaS subscription.
The average Early Payment Programme client tenure, a measure of
customer loyalty and Oxygen's success in renewing contracts,
reached 6.6 years at the end of 2022 (2021: 5.8 years), adding to
Oxygen's recurring revenue streams.
Early Payment Programme clients committed GBP1.1bn in spending
to more than 4,000 suppliers during 2022 (2021: GBP878m). New spend
added during the year hit a record GBP330m (2021: GBP267m), 24%
higher than the prior year.
Oxygen's position as a financial technology company delivering
social value strengthened significantly. Throughout 2022 more than
8,000 small businesses within Oxygen clients' local communities
received over GBP0.5bn in early payments - at no cost to the
client. And together with EY, Oxygen continued to develop its
Carbon Reporting tool which helps councils understand the carbon
footprint of their supply chains.
Current trading and prospects
Indications from initial trading in 2023 are strong with double
digit growth for recurring revenue streams continuing.
Continued economic volatility makes Oxygen's products
increasingly attractive; early payment solutions are increasing
relevant to our clients and their suppliers. Similarly, business
development opportunities identified by our SaaS offer are
increasingly in demand from clients seeking public sector
insight.
Interest from new early payment clients is strong, with several
contracts expected to be signed in Q1 2023. Equally major new
client features added to SaaS products in the second half of 2022
are rated by existing clients and have generated strong market
interest.
SATAGO REVIEW
2022 performance
Following conclusion of a commercial pilot and competitive
process, Satago was selected by Lloyds Bank (the "Bank") to deliver
a new digitised invoice financing platform for its UK
customers..
Additionally, the Bank made a strategic investment of GBP5m in
Satago at a post-money valuation of GBP25m.
Satago hit numerous delivery milestones for the Lloyds Bank
contract throughout the year, culminating in completing the trial
phase of its fully digitised end-to-end invoice finance solution
for the Bank in early 2023. The Bank is now testing the digitised
proposition ahead of customer onboarding, expected in due
course.
In June Satago signed a Letter of Intent with Sage Group
("Sage") and Lloyds, introducing a significant partner to work
alongside Satago and the Bank.
These major contract wins coupled with a continued pivot towards
Lending-As-A-Service ("LaaS") saw revenues increase by over 350% to
GBP2.2m (2021 :GBP0.5m).
Current trading and prospects
Early 2023 has been dominated by continued work with existing
and prospective LaaS clients and Embedded Finance partnerships.
This has culminated in the delivery of the trial phase of Satago's
fully digitised end-to-end invoice finance solution with Lloyds
Bank.
Meaningful progress with the Embedded Finance offering has
resulted in a deepening of the relationship with Sage and a signed
statement of work to embed Satago's invoice finance service into
Sage 50, which launched in Q1 2023. Satago also extended the
agreement to provide Satago to certain Sage 50 users as part of a
subscription package offering to the Irish market. Further
extending Satago's core offerings of credit control and risk
insights to help SMEs better manage their debtor book.
Satago has a growing pipeline of LaaS and Embedded Finance
customers in the UK and Europe.
Demand for Satago's own loan book offering increased during the
first two months of 2023.
PLAYSTACK REVIEW
2022 performance
Alongside the acquisition of Magic Fuel Games Inc ("Magic
Fuel"), and the concurrent signing of a contract with a global
technology platform, Playstack announced a delay to a key console
game title which stunted the company's annual growth.
Despite the delay, Playstack's existing games portfolio once
again contributed more than 50% of games revenue in 2022, through
strong catalogue management and platform partnerships.
Given the success of 'Magnitude', a proprietary sourcing
technology, in supporting the discovery of new games, the Board has
focused resources on further developing this tool, which is now
surfacing over 80% of all new game titles.
Playstack launched two new titles during 2022: The Case of the
Golden Idol and The Entropy Centre. Both games have received
significant critical acclaim, with The Case of the Golden Idol
earning a BAFTA Nomination for best Debut Game, and also being
shortlisted for the prestigious Seumas McNally Grand Prize at the
annual Independent Game Festival Awards in San Francisco.
In 2023 Playstack is focusing on game ecosystems and will
publish two new games with an extended life well beyond their
launch. This strategy aims to extend revenue predictability and
establish new, longer-lasting partnerships with platform
holders.
Playstack is well-placed to expand its game portfolio in 2023
and beyond.
Current trading and prospects
Playstack's console portfolio will be further extended in 2023,
with expansions to existing games and two new titles set for
release, plus an increasingly strong pipeline of titles for 2024
and beyond.
The mobile portfolio centres on six key titles for 2023,
including the ongoing delivery of the technology contract by Magic
Fuel.
Back-book games remain a key component of future revenue
modelling, with an increased focus on higher quality,
longer-duration titles.
2023 is expected to be a transformative year for the business,
with expectations of profitability on a full-year basis with
revenue derived from a diverse range of games.
VERTUS REVIEW
2022 performance
New loan facilities closed during 2022 increased by 81% to
GBP15.2m (2021: GBP8.4m), resulting in interest income increasing
by 61% to GBP2.2m (2021: GBP1.4m).
Active facilities increased from 21 to 31 inclusive of two early
settlements. Overall loan book increased by 38% to GBP21.4m (2021:
GBP15.6m).
No defaults or impairments were recorded across the book for the
sixth consecutive year. Increased market demand for IFAs and
ongoing consolidation ensures the value of security over IFAs
remains strong.
Current trading and prospects
Ongoing consolidation in the IFA market is fuelling demand for
funding, positioning Vertus well for further growth, as the only
specialist capital provider to the IFA sector. Furthermore, IFAs
continue to experience new-client enquiries and organic growth,
improving their top-line performance. We expect the change in
strategy to lend whole-of-market to continue to benefit demand for
capital in the coming year.
Offsetting the secular consolidation trends, the impact of
higher interest rates and increased competition in the broader
market environment, has spilled over from 2022 into 2023,
challenging loan book growth.
Early settlements remain a risk to overall loan book growth,
driven by higher cost of capital, customers being sold to
consolidators and alternative lenders and banks entering the market
to fund larger deals. However, our focus remains on the smaller end
of the deal market and, although loan book growth may slow, we
still foresee steady demand to fund acquisitions and MBOs in this
space.
Lead times for closing facilities improved during the last
quarter, indicating a possible improvement in FCA processing times.
This will assist in reducing deal cycles and improving closing
rates in the pipeline.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes 2022 2021
GBP'000 GBP'000
====================================== ======= ======================== =========
Interest income 3 2,619 1,681
Fee income 3 7,183 4,330
Publishing income 3 6,317 7,104
Gross revenue 16,119 13,115
------------------------ ---------
Interest, fee and publishing expenses (5,075) (6,214)
------------------------ ---------
Net revenue 11,044 6,901
======================== =========
Staff costs 5 (12,609) (11,285)
Other operating expenses (4,810) (3,257)
Depreciation & amortisation (1,596) (794)
Net impairment on financial assets 7 (50) 10
Share of profit from associates 1 3
------------------------ ---------
Loss before tax (8,020) (8,422)
------------------------ ---------
Taxation 2, 9 1,214 986
------------------------ ---------
Loss for the year (6,806) (7,436)
======================== =========
Other comprehensive income
Items that may be reclassified subsequently
to profit and loss
Exchange differences on translating
foreign operations (65) (39)
Other comprehensive income for the
year, net of tax (65) (39)
======================== =========
Total comprehensive loss for the
year (6,871) (7,475)
======================== =========
Loss for the year attributable to:
Owners of TruFin plc (6,637) (7,071)
Non-controlling interests (169) (365)
------------------------ ---------
(6,806) (7,436)
======================== =========
Total comprehensive loss for the year
attributable to:
Owners of TruFin plc (6,704) (7,112)
Non-controlling interests (167) (363)
------------------------ ---------
(6,871) (7,475)
======================== =========
Earnings per Share
2022 2021
Notes pence pence
====================================== ======= ======================== =========
Basic and Diluted EPS 22 (7.3) (8.7)
COMPANY STATEMENT OF COMPREHENSIVE INCOME
Notes 2022 2021
GBP'000 GBP'000
==================================== ======= ======================== =========================
Revenue 3 2,293 2,126
======================== =========================
Staff costs 5 (1,673) (1,911)
Other operating expenses (660) (624)
Depreciation & amortisation (2) -
Loss before tax (42) (409)
======================== =========================
Taxation 9 - -
------------------------ -------------------------
Loss and total comprehensive income
for the year (42) (409)
======================== =========================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Notes 2022 2021
GBP'000 GBP'000
================================= ======= ========================= =========================
Assets
Non-current assets
Intangible assets 10 24,411 21,191
Property, plant and equipment 11 345 65
Deferred tax asset 9 250 303
Loans and advances 13 15,016 11,575
------------------------- -------------------------
Total non-current assets 40,022 33,134
========================= =========================
Current assets
Cash and cash equivalents 10,273 7,608
Loans and advances 13 9,145 4,558
Interest in associate 4 3
Trade receivables 14 2,149 2,585
Other receivables 14 3,899 2,840
------------------------- -------------------------
Total current assets 25,470 17,594
========================= =========================
Total assets 65,492 50,728
========================= =========================
Equity and liabilities
Equity
Issued share capital 15 85,706 73,548
Retained earnings (24,884) (17,731)
Foreign exchange reserve (63) 4
Other reserves (26,531) (24,393)
------------------------- -------------------------
Equity attributable to owners of
the company 34,228 31,428
------------------------- -------------------------
Non-controlling interest 19 5,876 1,023
------------------------- -------------------------
Total equity 40,104 32,451
========================= =========================
Liabilities
Non-current liabilities
Borrowings 16 16,764 11,351
------------------------- -------------------------
Total non-current liabilities 16,764 11,351
========================= =========================
Current liabilities
Borrowings 16 1,783 1,634
Trade and other payables 17 6,841 5,292
Total current liabilities 8,624 6,926
========================= =========================
Total liabilities 25,388 18,277
========================= =========================
Total equity and liabilities 65,492 50,728
========================= =========================
COMPANY STATEMENT OF FINANCIAL POSITION
Notes 2022 2021
GBP'000 GBP'000
=================================== ======= ========================= =========================
Assets
Non-current assets
Property, plant and equipment 11 4 -
Investments in subsidiaries 12 30,189 30,189
Amounts owed by group undertakings 54,835 46,919
------------------------- -------------------------
Total non-current assets 85,028 77,108
========================= =========================
Current assets
Cash and cash equivalents 2,260 786
Trade and other receivables 14 138 144
------------------------- -------------------------
Total current assets 2,398 930
========================= =========================
Total assets 87,426 78,038
========================= =========================
Equity and liabilities
Equity
Issued share capital 15 85,706 73,548
Retained earnings (6,042) (5,504)
Other reserves 6,828 8,966
------------------------- -------------------------
Total equity 86,492 77,010
========================= =========================
Liabilities
Current liabilities
Trade and other payables 17 934 1,028
Total current liabilities 934 1,028
========================= =========================
Total liabilities 934 1,028
========================= =========================
Total equity and liabilities 87,426 78,038
========================= =========================
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 2022 73,548 (17,731) 4 (24,393) 31,428 1,023 32,451
Loss for the year - (6,637) - - (6,637) (169) (6,806)
Other comprehensive
income for the
year - - (67) - (67) 2 (65)
Total comprehensive
loss for the year - (6,637) (67) - (6,704) (167) (6,871)
-------- --------- --------- --------- -------- ------------ --------
Issuance of shares 12,158 (496) - (2,138) 9,524 - 9,524
Issuance of shares
by subsidiary - (20) - - (20) 5,020 5,000
-------- --------- --------- --------- -------- ------------ --------
Balance at 31
December 2022 85,706 (24,884) (63) (26,531) 34,228 5,876 40,104
======== ========= ========= ========= ======== ============ ========
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
======== ========= ========= ========= ======== ============ ========
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, the share
revaluation reserve and shares issued at a discount.
The merger reserve arose as a result of combining businesses
that are under common control. As at 31 December 2022 it was a
debit balance of GBP33,358,000 (2021: GBP33,358,000 )
The share revaluation reserve arose from the share cancellation
that took place in February 2018. As at 31 December 2022 its
balance was GBP8,966,000 (2021: GBP8,966,000).
Shares issued at a discount arose from the share issuance that
took place in April 2022. As at 31 December 2022 its balance was
GBP2,138,000 (2021: GBPnil). See Note 15 for further
information.
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 Other reserves Total equity
GBP'000 earnings GBP'000 GBP'000
GBP'000
========================= =============== ========== ================ ==============
Balance at 1 January
2022 73,548 (5,504) 8,966 77,010
Total comprehensive loss
for the year - (42) - (42)
Issuance of shares 12,158 (496) (2,138) 9,524
--------------- ---------- ---------------- --------------
Balance at 31 December
2022 85,706 (6,042) 6,828 86,492
=============== ========== ================ ==============
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
=============== ========== ================ ==============
CONSOLIDATED STATEMENT OF CASH FLOWS
2022 2021
GBP'000 GBP'000
========================================== ======================== =========
Cash flows from operating activities
Loss before tax (8,020) (8,422)
Adjustments for
Depreciation of property, plant and
equipment 108 96
Amortisation of intangible assets 2,377 1,571
Share based payments - 70
Finance costs 974 659
Share of profit from associate (1) (3)
Loss on disposal of Fixed Assets - 2
Loss on intragroup transfer of subsidiary - 2
Working capital adjustments (4,562) (6,025)
Movement in Loans and advances (8,029) (1,472)
Increase in trade and other receivables (34) (720)
Increase/(Decrease) in trade and
other payables 60 (1,735)
Net payables on acquisition of subsidiary (67) -
(8,070) (3,927)
Tax credit received/(paid) 668 (2)
Interest and finance costs paid (777) (716)
------------------------ ---------
Net cash used in operating activities (12,741) (10,670)
======================== =========
Cash flows from investing activities:
Additions to intangible assets (3,159) (1,779)
Additions to property, plant and
equipment (113) (24)
Acquisition of subsidiaries (1,217) -
Cash on acquisition of subsidiary 19 -
Net cash used in investing activities (4,470) (1,803)
Cash flows from financing activities:
Issue of ordinary share capital 9,524 -
Issue of ordinary share capital of
subsidiary 5,000 148
Net borrowings 16 5,370 2,353
Lease payments (28) (99)
------------------------ ---------
Net cash generated from financing
activities 19,866 2,402
------------------------ ---------
Net increase/(decrease) in cash
and cash equivalents 2,655 (10,071)
Cash and cash equivalents at beginning
of the year 7,608 17,728
Effect of foreign exchange rate changes 10 (49)
------------------------ ---------
Cash and cash equivalents at end
of the year 10,273 7,608
======================== =========
COMPANY STATEMENT OF CASH FLOWS
2022 2021
GBP'000 GBP'000
================================================= ======================== =========
Cash flows from operating activities
Loss before income tax (42) (409)
Adjustments for:
Depreciation of property, plant and equipment 2 -
Interest income (2,166) (2,008)
Share based payments - 70
Working capital adjustments (2,206) (2,347)
Decrease in trade and other receivables 6 513
Decrease in trade and other payables (94) (114)
------------------------ ---------
(88) 399
------------------------ ---------
Net cash generated used in operating activities (2,294) (1,948)
------------------------ ---------
Cash flows from investing activities
Intragroup loans cash (advanced)/received (5,750) 2,156
Additions to property, plant and equipment (6) -
------------------------ ---------
Net cash generated (used in)/from investing
activities (5,756) 2,156
------------------------ ---------
Cash flows from financing activities
Issue of ordinary share capital 9,524 -
Net cash generated from financing activities 9,524 -
Net increase in cash and cash equivalents 1,474 208
------------------------ ---------
Cash and cash equivalents at beginning of the
year 786 578
------------------------ ---------
Cash and cash equivalents at end of the year 2,260 786
======================== =========
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".
The principal activities of the Group are the provision of niche
lending, early payment services and 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
Entities of Registered address the business rights
incorporation and shares
held
=============================== =============== =========================== =================== ==================
TruFin Holdings Limited Jersey 26 New Street, Holding Company 100% of ordinary
("THL") St Helier, Jersey shares
JE2 3RA
=============================== =============== =========================== =================== ==================
Satago Financial Solutions UK 120 Regent Street, Provision 72% of ordinary
Limited ("Satago") (together London, United of short term shares*
with Satago SPV 1, Satago Kingdom, W1B 5FE finance
SPV 2 and Satago Poland)
("Satago Group")
=============================== =============== =========================== =================== ==================
Satago SPV 1 Limited UK 120 Regent Street, Provision 72% of ordinary
("Satago SPV 1") London, United of short term shares*
Kingdom, W1B 5FE finance
=============================== =============== =========================== =================== ==================
Satago SPV 2 Limited UK 120 Regent Street, Provision 72% of ordinary
("Satago SPV 2") London, United of short term shares*
Kingdom, W1B 5FE finance
=============================== =============== =========================== =================== ==================
Satago z.o.o (Satago Poland 32-023 Krakow ul. Provision 72% of ordinary
Poland) Sw. Krzyza 19/6 of short term shares*
Poland finance
=============================== =============== =========================== =================== ==================
Oxygen Finance Group UK 1(st) Floor Enterprise Holding Company 88% of ordinary
Limited ("OFGL") (together House, shares**
with OFL and OFAI) ("Oxygen") 115 Edmund Street,
Birmingham, United
Kingdom, B3 2HJ
=============================== =============== =========================== =================== ==================
Oxygen Finance Limited UK 1(st) Floor Enterprise Provision 88% 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% of ordinary
Inc ("OFAI") Center, 1209 Orange of early payment shares**
Street, City of services
Wilmington, County
of New Castle,
Delaware 19801,
USA
=============================== =============== =========================== =================== ==================
TruFin Software Limited UK 120 Regent Street, Provision 100% of ordinary
("TSL") London, United of technology shares
Kingdom, W1B 5FE services
=============================== =============== =========================== =================== ==================
AltLending UK Limited UK 120 Regent Street, Provision 100% of ordinary
("AltLending") London, United of short term shares*
Kingdom, W1B 5FE finance
=============================== =============== =========================== =================== ==================
Vertus Capital Limited UK Building 1 Chalfont Provision 54% of ordinary
("Vertus Capital") (together Park, Gerrards of short term shares
with Vertus SPV 1 Limited) Cross, United Kingdom, finance
("Vertus") SL9 0BG
=============================== =============== =========================== =================== ==================
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")*** Finland Mikonkatu 17 B, Publishing 75% of ordinary
00100 Helsinki, activities shares
Finland in the field
of computer
games
=============================== =============== =========================== =================== ==================
Playstack AB ("PS Sweden")*** Sweden Solbergavägen Developing, 100% of ordinary
17, 17998 Färentuna, publishing shares
Sweden and selling
electronic
games
=============================== =============== =========================== =================== ==================
Playstack Inc ("Playstack USA Gust Delaware, Publishing 100% of ordinary
USA")*** 16192 Coastal Hwy, of computer shares
Lewes, DE 19958 games
=============================== =============== =========================== =================== ==================
PlayIgnite Inc ("PlayIgnite USA Cogency Global Business and 100% of ordinary
USA")*** Inc, 850 New Burton domestic software shares
Road, Suite 201, developer
Dover DE 19904
=============================== =============== =========================== =================== ==================
Magic Fuel Inc ("Magic USA 5424 Sunol Blvd Game developer 100% of ordinary
Fuel") Ste 10 PMB 1021, shares
Pleasanton, CA
94566-7705
=============================== =============== =========================== =================== ==================
*See Note 19 for the Group's effective economic ownership of the
Satago Group.
** Nominal ownership of these companies is 87.5% 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.
*** 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
(application to strike off made on 23 January 2023)
-- A 27% interest in Storm Chaser Games Limited ("Storm Chaser Games")
On 22 March 2022, Porge Ltd, a company 100% owned by OFGL was
dissolved.
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, 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.
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 Oxygen 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 are in line with contractual agreements and
relate to Lending as a Service projects.
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 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.
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.
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.
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 advances 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 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.
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 CGU 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 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.
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
At the inception of a contract, the Group assesses if the
contract contains a lease. A contract contains a lease if the
contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
Reassessment is only required when the terms and conditions of the
contract are changed.
Right-of-use assets
The Group recognises a right-of-use asset and lease liability at
the date which the underlying asset is available for use.
Right-of-use assets are measured at cost which comprises the
initial measurement of lease liabilities adjusted for any lease
payments made at or before the commencement date and lease
incentives received. Any initial direct costs that would not have
been incurred if the lease had not been obtained are added to the
carrying amount of the right-of-use assets.
These right-of-use assets are subsequently depreciated using the
straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of
the lease term.
Right-of-use assets (except for those which meet the definition
of an investment property) are presented within "Property, plant
and equipment".
Right of use assets which meet the definition of property, plant
and equipment are presented with and accounted for in accordance
the this policy.
Lease liabilities
The initial measurement of a lease liability is measured at the
present value of the lease payments discounted using the interest
rate implicit in the lease, if the rate can be readily determined.
If that rate cannot be readily determined, the borrower shall use
its incremental borrowing rate.
Lease liabilities are measured at amortised cost using the
effective interest method. Lease liabilities shall be remeasured
when:
-- There is a change in future lease payments arising from changes in an index or rate;
-- There is a change in the Group's assessment of whether it
will exercise an extension option; or
-- There is a modification in the scope or the consideration of
the lease that was not part of the original term.
Lease liabilities are remeasured with a corresponding adjustment
to the right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
Short term and low value leases
The Group has elected to not recognise right-of-use assets and
lease liabilities for short-term leases that have lease terms of 12
months or less and leases of low value leases. Lease payments
relating to these leases are expensed to profit or loss on a
straight-line basis over the lease term.
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.
Note 18 presents the carrying amounts of the Expected Credit
Losses in further detail.
Impairment of Intangibles
The Group is required to test, whether intangible and tangible
assets have suffered any impairment based on the recoverable amount
of its CGUs, when there are indicators for impairment. Determining
whether an impairment has occurred requires an estimation of the
value in use of the CGU to which these assets are allocated. Key
sources of estimation uncertainty in the value in use calculation
include the estimation of future cash flows of the CGU affected by
expected changes in underlying revenues and direct costs, and
administration costs through the forecast period, the long-term
growth rates and a suitable discount rate to apply to the
aforementioned cash flows in order to calculate the net present
value. Further information regarding the assumptions used in the
calculations have been provided in Note 10.
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
2022 2021
Group GBP'000 GBP'000
======================== ======================= ========================
Revenue
Interest income 2,619 1,681
----------------------- ------------------------
Total interest income 2,619 1,681
----------------------- ------------------------
EPPS contracts 3,335 2,536
Consultancy fees 597 436
Implementation fees 1,644 70
Subscription fees 1,607 1,288
----------------------- ------------------------
Total fee income 7,183 4,330
----------------------- ------------------------
IAP revenue 342 428
Advertising revenue 453 378
Console revenue 5,521 6,285
Brand revenue 1 13
----------------------- ------------------------
Total publishing income 6,317 7,104
----------------------- ------------------------
Gross revenue 16,119 13,115
======================= ========================
2022 2021
Company GBP'000 GBP'000
============================= ======================= ========
Intercompany interest income 2,166 2,008
Intercompany fee income 118 118
Other interest income 9 -
----------------------- --------
Gross revenue 2,293 2,126
======================= ========
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 Payment
Year ended 31 December term services Publishing Other Total
2022 finance GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
=========================== ======== ========= ============ ========== =========
Gross revenue 4,469 5,311 6,330 9 16,119
Cost of sales (1,153) (889) (3,033) - (5,075)
-------- --------- ------------ ---------- ---------
Net revenue 3,316 4,422 3,297 9 11,044
-------- --------- ------------ ---------- ---------
Adjusted loss before tax* (3,879) (220) (1,569) (2,352) (8,020)
Loss before tax (3,879) (220) (1,569) (2,352) (8,020)
Taxation 218 395 601 - 1,214
(Loss)/profit for the year (3,661) 175 (968) (2,352) (6,806)
======== ========= ============ ========== =========
Total assets 34,200 8,258 20,407 2,627 65,492
Total liabilities (19,747) (1,792) (2,911) (938) (25,388)
-------- --------- ------------ ---------- ---------
Net assets 14,453 6,466 17,496 1,689 40,104
======== ========= ============ ========== =========
*adjusted loss before tax excludes share-based payment
expense
Short Payment
Year ended 31 December term services Publishing Other Total
2021 finance GBP'000 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
-------- --------- ------------ ---------- ---------
The majority of the Group's activities (98% of revenues) are
within the UK, with 2% earned in USA and 0% in Europe.
5. Staff costs
Analysis of staff costs:
Group Company
================== ==================
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
================================= ======== ======== ======== ========
Wages and salaries 10,365 9,011 1,384 1,440
Consulting costs 379 395 - 19
Social security costs 1,411 1,409 251 355
Pension costs arising on defined
contribution schemes 454 428 38 27
Share based payment - 70 - 70
Government grants - (28) - -
-------- -------- -------- --------
12,609 11,285 1,673 1,911
======== ======== ======== ========
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:
2022 2021
Number Number
================== ================== =======
Management 17 16
Finance 10 7
Sales & marketing 30 23
Operations 78 36
Technology 43 54
------------------ -------
178 136
================== =======
Directors' emoluments
The number of directors who received share options during the
year was as follows:
2022 2021
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 2022 2021
and Benefits Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
===================== ======== ======== ============= ======== ========
Executive Directors:
J v d Bergh 256 220 9 485 465
256 220 9 485 465
======== ======== ============= ======== ========
Salary Bonus Pension 2022 2021
and Benefits Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------- -------- ------------- -------- --------
Non-executive
Directors:
S Baldwin 100 - - 100 100
P Judd 70 - - 70 70
P Dentskevich 60 - - 60 50
A Wilhelmsen - - - - -
230 - - 230 220
======== ======== ============= ======== ========
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:
2022 2021
GBP'000 GBP'000
================================================= ======== ========
Performance Share Plan and Joint Share Ownership
Plan Founder Award - 59
Performance Share Plan Market Value Award - 11
Performance Share Plan 2019 Award - -
Performance Share Plan 2018 Award - -
Total - 70
======== ========
Performance Share Plan and Joint Share Ownership Plan Founder
Award ("Found Award")
The final 25% of Founder Awards held by James van den Bergh
vested on 22 February 2022 when the share price was GBP0.81. As a
result, 395,558 shares subject to the 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.
Performance Share Plan 2018 Award ("PSP 2018 Award")
The unvested performance conditions of this award had not been
met at the end of the vesting period.
Performance Share Plan 2019 Award ("PSP 2019 Award")
The performance conditions of this award had not been met at the
end of the vesting period .
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 2022 395,558 1,566,255 4,868,420
Granted during the year - - -
Vested during the year (395,558) - -
Exercised during the year - - -
------------ ----------- -----------
Outstanding at 31 December 2022 - 1,566,255 4,868,420
============ =========== ===========
Exercisable at 31 December 2022 1,566,255 -
=========== ===========
*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 2022 263,158 320,000
Granted during the year - -
Vested during the year - -
Exercised during the year - -
Cancelled during the year - -
----------- -----------
Outstanding at 31 December 2022 263,158 320,000
=========== ===========
Exercisable at 31 December 2022 - -
=========== ===========
No options expired during the year.
The weighted average remaining contractual life for the share
options outstanding as at 31 December 2022 was 5.21 years (2021:
6.21 years).
7. Net impairment loss on financial assets
2022 2021
GBP'000 GBP'000
================================ ======================= ========================
At 1 January 4 10
Charge for impairment loss 50 (10)
Amounts written off in the year - 8
Amounts recovered in the year - (4)
At 31 December 54 4
======================= ========================
At 31 December 2022, the Group had an impairment balance of
GBP54,000 which was allocated against loans and advances. At 31
December 2021, all of the impairment balance was allocated against
loans and advances.
The net impairment charge on financial assets during the year
ended 31 December 2022 all related to loans and advances.
The net impairment charge on financial assets during the year
ended 31 December 2021 all related to loans and advances.
8. Loss before income tax
Loss before income tax is stated after charging:
2022 2021
GBP'000 GBP'000
============================================== ======================= ========
Depreciation of property, plant and equipment 108 96
Amortisation of intangible assets 2,377 1,571
Staff costs including share based payments
charge 12,609 11,285
2022 2021
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 82 45
Fees payable for the audit of the company's
subsidiaries 98 84
----------------------- --------
Total audit fees 180 129
======================= ========
Non audit services
Other assurance services 14 13
----------------------- --------
Total non-audit fees 14 13
======================= ========
9. Taxation
Analysis of tax charge recognised in the period
2022 2021
GBP'000 GBP'000
============================= ======================= ========
Current tax credit (1,267) (726)
Deferred tax charge/(credit) 53 (260)
----------------------- --------
Total tax credit (1,214) (986)
======================= ========
Reconciliation of loss before tax to total tax credit
recognised
2022 2021
Group GBP'000 GBP'000
================================================= ======================== ========================
Loss before tax (8,020) (8,422)
Loss before tax multiplied by the standard
rate of corporation tax in the UK of 19% (2021:
19%) (1,524) (1,600)
Tax effect of:
Expenses not deductible 15 (223)
Depreciation in excess of capital allowances 253 395
Capital allowances (318) (187)
Other short term timing differences 1 (5)
R&D tax credit (1,274) (733)
Deferred tax not recognised 1,633 1,367
Total tax charge (1,214) (986)
======================== ========================
2022 2021
Company GBP'000 GBP'000
================================================= ======================== ========================
Loss before tax (42) (409)
Loss before tax multiplied by the standard
rate of corporation tax in the UK of 19% (2021:
19%) (8) (78)
Tax effect of:
Expenses not deductible 24 32
Brought forward losses utilised (15) -
Other short term timing differences (1) -
Deferred tax not recognised - 46
Total tax charge - -
======================== ========================
In the Finance Bill 2022, the UK government 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 2022.
The deferred tax assets and liabilities at 31 December 2022 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
2022 2021
Group GBP'000 GBP'000
================================================== ======================= ========
Balance at start of the year 303 43
(Charge)/credit to the statement of comprehensive
income (53) 260
----------------------- --------
Balance at end of the year 250 303
======================= ========
Comprised of:
Losses 250 303
----------------------- --------
Total deferred tax asset 250 303
======================= ========
A deferred tax asset from losses in Vertus Capital Limited has
been recognised, and has been used in the year against profits in
Vertus Capital SPV 1 during the year. Unutilised tax losses in the
remainder of the Group as at the reporting date were GBP83,102,000
(2021:GBP77,124,000).
10. Intangible assets
Separately
Software identifiable
Client contracts licenses intangible
and similar Assets Goodwill Total
assets
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ================== ================== ============= ========== =======
Cost
At 1 January 2022 5,490 2,579 1,642 15,746 25,457
Additions 905 2,254 - - 3,159
On Acquisition - 3 1,595 823 2,421
Disposals - (75) - - (75)
Exchange differences 4 12 - - 16
-------------
At 31 December
2022 6,399 4,773 3,237 16,569 30,978
================== ================== ============= ========== =======
Amortisation
At 1 January 2022 (1,607) (1,181) (1,070) - (3,858)
Charge (889) (977) (511) - (2,377)
Disposals - 75 - - 75
Exchange differences - 1 - - 1
-------------
At 31 December
2022 (2,496) (2,082) (1,581) - (6,159)
================== ================== ============= ========== =======
Accumulated impairment
losses
At 1 January 2022 (408) - - - (408)
At 31 December
2022 (408) - - - (408)
================== ================== ============= ========== =======
Net book value
------------------ ------------------ ------------- ---------- -------
At 31 December
2022 3,495 2,691 1,656 16,569 24,411
================== ================== ============= ========== =======
At 31 December
2021 3,475 1,398 572 15,746 21,191
================== ================== ============= ========== =======
Separately
Software identifiable
Client contracts 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
================== ================== ============= ========== =======
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 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 2022 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 2022 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 2022 was GBP2,691,000 (2021: GBP1,398,000 ). This consists
of cost of GBP4,773,000 (2021: GBP2,579,000) and accumulated
amortisation of GBP2,082,000 (2021: GBP1,181,000 ). During the year
there were additions of GBP2,254,000 (2021: GBP757,000 ) and
amortisation of GBP977,000 (2021: GBP370,000 ).
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 (2021: GBP277,000) during the year. Net Book value of
these assets at 31 December 2022 was GBP162,000 (2021: GBP439,000).
Goodwill related to this transaction excluding these assets at 31
December 2022 was GBP1,372,000 (2021: 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 (2021: GBP51,000). Net Book value of these assets at 31
December 2022 was GBP81,000 (2021: GBP132,000). Goodwill related to
this transaction excluding these assets at 31 December 2022 was
GBP1,408,000 (2021: GBP1,408,000).
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.
Magic Fuel
On 6 June 2022, the Group acquired a 100% equity interest in
Magic Fuel Inc ("Magic Fuel"). Goodwill of GBP2,417,000 arose from
this transaction and was included within the publishing segment of
the business. Following the acquisition , separately identifiable
intangible assets of GBP1,595,000 relating to the Intellectual
Property of the Games in development by Magic Fuel were recognised.
These are being amortised over 5 years resulting in an amortisation
charge of GBP181,000 during the year. Further details of the
acquisition have been included in Note 20. Goodwill related to this
transaction excluding these assets at 31 December 2022 was
GBP823,000 (2021: GBPnil).
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 2027, a discount rate of 10% 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 2027, a discount rate
of 15% 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 2027, a discount
rate of 20% was used and terminal growth rate of 3%. Revenue growth
was a key assumption and was based on Playstack's pipeline of games
over the forecast period. This factors in a number of key projects
with platforms and streaming partners. In some instances, revenue
projections have been based on amounts outlined in agreed contracts
in place with customers, whilst others have been based on
progressive discussions with customers and historic sales for games
of a similar nature. The valuation of Playstack was greater than
the amount of goodwill and therefore the goodwill is not deemed to
be impaired.
Magic Fuel was valued using the discounted cash flow
methodology. It's net earnings along with revenues earned in the
rest of the group related to this acquisition were forecasted to
2027, a discount rate of 20% was used and a terminal growth rate of
3%. The valuation of this CGU was greater than the value of
goodwill and so was deemed not be impaired.
The impairment review of Playstack is most sensitive to a change
in the planned revenue growth. A 47% reduction in this growth rate
could give rise to an impairment charge.
No other reasonable change in the other assumptions set out in
this note would result currently in an impairment charge.
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 2022 53 78 429 560
Additions 86 27 276 389
Disposals - (9) (429) (438)
At 31 December
2022 139 96 276 511
--------- ---------- ------------ -------
Depreciation
At 1 January 2022 (44) (44) (407) (495)
Charge (16) (26) (66) (108)
Disposals - 9 429 438
At 31 December
2022 (60) (62) (44) (166)
--------- ---------- ------------ -------
Net book value
--------- ---------- ------------ -------
At 31 December
2022 79 34 232 345
========= ========== ============ =======
At 31 December
2021 9 34 22 65
========= ========== ============ =======
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
========= ========== ============ =======
Computer Right-of-use
equipment asset Total
Company GBP'000 GBP'000 GBP'000
==================== ================= =================== ===================
Cost
At 1 January 2022 3 167 170
Additions 6 - 6
Disposals - (167) (167)
At 31 December 2022 9 - 9
----------------- ------------------- -------------------
Depreciation
At 1 January 2022 (3) (167) (170)
Charge (2) - (2)
Disposals 167 167
----------------- ------------------- -------------------
At 31 December 2022 (5) - (5)
----------------- ------------------- -------------------
Net book value
----------------- ------------------- -------------------
At 31 December 2022 4 - 4
================= =================== ===================
At 31 December 2021 - - -
================= =================== ===================
Computer Right-of-use
equipment 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 - - -
================= =================== ===============
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 2022 and 31 December 2022 30,189
Balance at 1 January 2021 and 31 December 2021 30,189
13. Loans and advances
2022 2021
Group GBP'000 GBP'000
========================= ======================= ========================
Total loans and advances 24,215 16,137
Less: loss allowance (54) (4)
24,161 16,133
======================= ========================
The aging of loans and advances are analysed as follows:
2022 2021
GBP'000 GBP'000
============================== ======================= ========
Neither past due nor impaired 23,875 16,062
Past due: 0-30 days 129 32
Past due: 31-60 days 77 10
Past due: 61-90 days 41 28
Past due: more than 91 days 39 1
24,161 16,133
======================= ========
14. Trade and other receivables
Group Company
------------------ ------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Trade and other receivables 2,149 2,585 - -
Prepayments 455 467 44 52
Accrued Income 890 385 - -
VAT - - 11 33
Other debtors 2,554 1,988 - 5
Amounts due from Group
Undertakings - - 83 54
6,048 5,425 138 144
======== ======== ======== ========
Trade receivables above are stated net of a loss allowance of
GBPnil (2021: GBPnil). All receivables are due within one year.
The aging of trade receivables is analysed as follows:
Group Company
------------------ ------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Not yet due 1,960 2,182 - -
Past due: 0-30 days 117 96 - -
Past due: 31-60 days 6 88 - -
Past due: 61-90 days 9 13 - -
Past due: more than
91 days 57 206 - -
2,149 2,585 - -
======== ======== ======== ========
15. Share capital
Share Capital Total
Group and Company GBP'000 GBP'000
======================================= =============== =========
80,822,204 shares at GBP0.91 per share 85,706 85,706
On 12 April 2022, the Company issued 13,360,739 ordinary shares
through a Placing and an Open Offer. These were issued at GBP0.75
per share, raising gross proceeds of GBP10,021,000. This was a
discount to par value of GBP2,138,000, which has been included in
Other Reserves in the Statement of Changes of Equity.
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 2022.
16. Borrowings
2022 2021
Group GBP'000 GBP'000
=========================== ======================= ========================
Loans due within one year 1,783 1,634
Loans due in over one year 16,764 11,351
18,547 12,985
======================= ========================
Movements in borrowings during the year
The below table identifies the movements in borrowings during
the year.
Group GBP'000
============================ ========================
Balance at 1 January 2022 12,985
Funding drawdown 8,707
Interest expense 852
Fee amortisation 110
Repayments (3,337)
Interest paid (777)
Exchange differences 7
------------------------
Balance at 31 December 2022 18,547
========================
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
========================
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. 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.
-- 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
------------------ ------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 529 380 28 5
Accruals 3,867 3,949 622 670
Other payables 1,636 103 - -
Corporation tax - 9 - -
Other taxation and social
security 603 706 284 353
VAT 206 145 - -
-------- -------- -------- --------
6,841 5,292 934 1,028
======== ======== ======== ========
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 2022
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 24,161 24,161 - - 24,161
Trade
receivables 2,149 2,149 - - 2,149
Other
receivables 3,444 3,444 - - 3,444
Cash and
cash
equivalents 10,273 10,273 10,273 - -
=================== ================== =================== =================== ===================
40,027 40,027 10,273 - 29,754
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Borrowings 18,547 18,547 - - 18,547
Trade, other
payables
and
accruals 6,392 6,392 - - 6,392
=================== ================== =================== =================== ===================
24,939 24,939 - - 24,939
=================== ================== =================== =================== ===================
31 December 2021
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 2022
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 54,835 54,835 - - 54,835
Other
receivables 94 94 - - 94
Cash and cash
equivalents 2,260 2,260 2,260 - -
=================== ================== =================== =================== ===================
57,189 57,189 2,260 - 54,929
=================== ================== =================== =================== ===================
Financial liabilities not measured
at fair value
Trade, other
payables
and accruals 934 934 - - 934
=================== ================== =================== =================== ===================
934 934 - - 934
=================== ================== =================== =================== ===================
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
=================== ================== =================== =================== ===================
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
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 10,273 7,608 2,260 786
Loans and advances 24,161 16,133 - -
Amounts owed by group
undertakings - - 54,835 46,919
Trade and other receivables 5,593 4,958 138 144
======== ======== ======== ========
Maximum exposure to
credit risk 40,027 28,699 57,233 47,849
======== ======== ======== ========
Loans and advances:
Collateral held as security
Group Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
================================= ======== -------- -------- ========
Fully collateralised
Loan-to-value* ratio:
Less than 50% 800 2 - -
50% to 70% 271 83 - -
71% to 80% 500 192 - -
81% to 90% 701 142 - -
91% to 100% - - - -
======== ======== ======== ========
2,272 419 - -
======== ======== ======== ========
Partially collateralised
Collateral value relating
to loans over 100% loan-to-value - - - -
-------- -------- -------- --------
Unsecured lending 21,943 15,718 - -
======== ======== ======== ========
* 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.
2022 2021
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) 11,035 - - 11,035 5,274
Average (risk
rating
3-5) 10,615 - - 10,615 10,863
Below average
(risk
rating 6+) 1,041 1,481 43 2,565 -
------------------- ------------------- ------------------- ------------------ ---------------------
Gross
carrying
amount 22,691 1,481 43 24,215 16,137
------------------- ------------------- ------------------- ------------------ ---------------------
Loss
allowance (26) - (28) (54) (4)
------------------- ------------------- ------------------- ------------------ ---------------------
Carrying
amount 22,665 1,481 15 24,161 16,133
=================== =================== =================== ================== =====================
Stage 1 Stage 2 Stage 3 Total
Gross Carrying Amount GBP'000 GBP'000 GBP'000 GBP'000
====================== ==================== ==================== ==================== ====================
As at 1 January 2022 16,136 - - 16,136
Transfer to stage
1 (43) - 43 -
Transfer to stage
2 (957) 957 - -
Transfer to stage - - - -
3
Net Loans originated 8,079 524 - 8,079
As at 31 December
2022 22,691 1,481 43 24,215
==================== ==================== ==================== ====================
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 (2021: 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 2022 (2021:
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 3 months 1-5 >5 years
2022 Amount than months to 1 years
GBP'000 1 month GBP'000 year GBP'000 GBP'000
GBP'000 GBP'000
----------------------- --------- --------- --------- --------- --------- ---------
Financial Assets
Cash and cash
equivalents 10,273 10,273 - - - -
Trade and other
receivables 5,593 2,660 778 1,717 438 -
Loans and advances 24,161 2,785 1,020 3,616 15,954 1,249
40,027 15,718 1,798 5,333 16,392 1,249
========= ========= ========= ========= ========= =========
Financial Liabilities
Trade payables,
other payables
and accruals 6,392 1,053 3,127 2,009 234 -
Borrowings 18,547 128 12 79 12,628 5,700
--------- --------- --------- --------- --------- ---------
24,939 1,181 3,139 2,008 12,862 5,700
========= ========= ========= ========= ========= =========
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 54% (2021: 54%).
Statement of Vertus Capital Vertus SPV1
Financial
Position
------------------------------------------------ ----------------------------------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
================ ----------------------- ----------------------- ====================== ======================
Current assets 5,559 5,005 21,718 15,740
Non-current
assets 69 5 - -
Current
liabilities (373) 94 (21,725) (15,746)
Equity
attributable to
owners of the
Company 2,828 2,747 (3) (3)
Non-controlling
interests 2,426 2,357 (3) (3)
Income Statement Vertus Capital Vertus SPV1
------------------------------------------------ ----------------------------------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
================ ----------------------- ----------------------- ====================== ======================
Revenue 743 522 2,214 1,380
Expenses (593) (343) (2,214) (1,193)
Profit after tax 150 86 - 187
Profit after tax
attributable
to owners of
the Company 81 46 - 100
Profit after tax
attributable
to the
non-controlling
interests 69 40 - 87
Cash Flow Statement Vertus Capital Vertus SPV1
------------------------------------------------ ----------------------------------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
==================== ----------------------- ----------------------- ====================== ======================
Net cash used in
operating
activities (385) (520) (5,296) (2,922)
Net cash generated
from
investing
activities 302 224 - -
Net cash generated
from
financing
activities - 488 5,425 2,839
----------------------- ----------------------- ---------------------- ----------------------
Net
(decrease)/increase
in cash and cash
equivalents (83) 192 129 (83)
======================= ======================= ====================== ======================
Non-controlling Vertus Capital Vertus SPV1
interest
------------------------------------------------ -----------------------------------------------
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
================ ----------------------- ----------------------- ====================== =======================
Balance at 1
January 2,357 2,220 (3) (95)
Share of profit
for the
year 69 40 - 87
Change in NCI
due to
share issuance
in the
year - 97 - 5
Balance at 31
December 2,426 2,357 (3) (3)
======================= ======================= ====================== =======================
The Group had a 72% ownership share of Bandana during the
year.
Statement of Financial Position Bandana
============================================= ================================================
2022 2021
GBP'000 GBP'000
============================================= ======================= =======================
Current assets 1 45
Current liabilities (5,465) (5,258)
Equity attributable to owners of the Company (3,955) (3,773)
Non-controlling interests (1,510) (1,440)
Income Statement Bandana
=================================================== ================================================
2022 2021
GBP'000 GBP'000
=================================================== ======================= =======================
Revenue - -
Expenses (251) (981)
Loss after tax (251) (981)
Loss after tax attributable to owners of the
Company (182) (710)
Loss after tax attributable to the non-controlling
interests (69) (271)
Cash Flow Statement Bandana
----------------------------------------- ------------------------------------
2022 2021
GBP'000 GBP'000
----------------------------------------- ------------------------ --------
Net cash from operating activities - -
------------------------ --------
Net increase in cash and cash equivalents - -
======================== ========
Non-controlling interest Bandana
--------------------------- --------------------------------------------------
2022 2021
GBP'000 GBP'000
--------------------------- ------------------------ ------------------------
Balance at 1 January (1,440) (1,169)
Share of loss for the year (69) (271)
------------------------ ------------------------
Balance at 31 December (1,509) (1,440)
======================== ========================
The Group's effective ownership share of Satago Financial
Solutions Limited ("Satago") at the reporting date is based on the
net assets of the Satago Group at the reporting date, and the
ownership waterfall following Lloyds Banking Group's GBP5m
investment in Satago in April 2022.
Statement of Financial Position Satago
============================================= ================================================
2022 2021
GBP'000 GBP'000
============================================= ======================= =======================
Current assets 10,397 1,748
Non-current assets 617 631
Current liabilities (927) (291)
Equity attributable to owners of the Company 5,061 1,985
Non-controlling interests 5,026 103
Income Statement Satago
2022 2021
GBP'000 GBP'000
=================================================== ======================= =======================
Revenue 1,860 198
Expenses (3,926) (3,284)
Loss after tax (2,001) (3,086)
Loss after tax attributable to owners of the
Company 1,910 (2,905)
Loss after tax attributable to the non-controlling
interests (91) (181)
Cash Flow Statement Satago
----------------------------------------------------- ----------------------------------
2022 2021
GBP'000 GBP'000
----------------------------------------------------- ------------------------ --------
Net cash used in operating activities (3,035) (3,965)
Net cash (used in)/generated from investing
activities (2,498) 189
Net cash generated from financing activities 7,360 2,731
------------------------ --------
Net increase/(decrease) in cash and cash equivalents 1,827 (1,044)
======================== ========
Non-controlling interest Satago
------------------------------------------------ --------------------------------------------------
2022 2021
GBP'000 GBP'000
------------------------------------------------ ------------------------ ------------------------
Balance at 1 January 103 294
Share of loss for the year (91) (181)
Arising from change in non-controlling interest 14 (10)
Equity Raise 5,000 -
------------------------ ------------------------
Balance at 31 December 5,026 103
======================== ========================
20. Acquisition of Subsidiaries
Magic Fuel
On 6 June 2022, the Group acquired a 100% equity interest in
Magic Fuel Inc ("Magic Fuel").
Magic Fuel's financial year end date is 31 December 2022. Its
results have been consolidated from the date of acquisition to 31
December 2022, in line with the Group's financial year end. The
profit for the period from acquisition consolidated in the Group's
accounts was GBP678,000. Had the acquisition taken place on 1
January 2022, the loss from Magic Fuel consolidated in the Group
would have been GBP114,000. This amount includes transactions with
other Group companies during the year.
Details of the consideration paid, the assets acquired and
liabilities assumed, the non-controlling interest recognised and
the effects on the cash flows of the Group, at the acquisition, are
as follows:
GBP'000
=================================================== =======
Net liabilities at acquisition (47)
TruFin share of net liabilities (47)
Goodwill arising on acquisition
Total consideration 2,371
Less: fair value of identifiable net liabilities
acquired (47)
-------
2,417
-------
Separately identifiable intangible assets 1,595
Goodwill net of separately identifiable intangible
assets 822
Consideration satisfied by:
Deferred consideration 1,196
Cash 1,175
In accordance with IFRS 3, we have recognised and measured the
separately identifiable intangible assets acquired as part of the
transaction. These have been valued at GBP1,595,000.
21. 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 2022 25
Lease recognised in year 276
Interest 12
Payments (28)
---------
Balance at 31 December 2022 285
=========
Group GBP'000
============================================= =========
Lease liability recognised at 1 January 2021 120
Interest 3
Payments (99)
---------
Balance at 31 December 2021 25
=========
22. 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:
2022 2021
=============================================== =================== ==========
Number of shares (#)
At year end 94,182,943 80,822,204
Weighted average 90,485,862 80,822,204
Earnings attributable to ordinary shareholders GBP'000 GBP'000
Loss after tax attributable to the owners of
TruFin plc (6,637) (7,071)
Adjusted earnings attributable to ordinary
shareholders
Loss after tax attributable to the owners of
TruFin plc (6,637) (7,071)
Adjusted for share-based payment - 70
Adjusted loss after tax attributable to the
owners of TruFin plc (6,637) (7,001)
Earnings per share* Pence Pence
Basic and Diluted (7.3) (8.7)
Adjusted(1) (7.3) (8.7)
* All Earnings per share figures are undiluted and diluted.
Adjusted1 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.
23. Related party disclosures
Transactions with Directors
Transactions with Directors, or entities in which a Director or
recent Director is also a Director or partner:
2022 2021
GBP'000 GBP'000
------------------------------------------------ -------- --------
Consultancy services provided by an ex-Director - 21
Key management personnel disclosures are provided in Notes 5 and
6.
During the year, Playstack 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
GBP525,000 (2021: GBP148,000).
24. Events after the Reporting Period
Since the year end, Satago has agreed to extend its agreement
with Sage. Initially, Satago services were offered to UK based Sage
50 packages only, but this extension is to now include certain
packages in Ireland.
Additionally, Satago signed a statement of work to embed
Satago's invoice finance service into Sage 50 and the solution was
launched during Q1 2023.
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END
FR EAFDLFLNDEAA
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