8 February 2024
TruFin
plc
("TruFin" or the "Company")
Trading
Update
Highlights
·
Revenue for the 12 months ended 31 December
2023 is expected to be no less
than £20.2m (FY221: £15.3m), representing
year-on-year growth in excess of 32%
·
Adjusted EBITDA loss2 is expected to be
ahead of prior expectations at no more than £(3.0)m, representing
an improvement of more than 47% year-on-year (FY221:
£(5.7)m)
·
Adjusted Loss Before Tax2 is expected
to be in line with market expectations, excluding the exceptional
loss on the sale of Vertus Capital Ltd ("Vertus"), at no more than
£(6.3)m (FY221: £(8.2)m)
·
Oxygen Finance Group Limited ("Oxygen") grew 2023
revenue by more than 18% to no less than £6.2m (FY22:
£5.3m)
·
Satago Financial Solutions Limited ("Satago") grew
2023 revenue by 72% to £3.8m (FY22: £2.2m)
·
Playstack Limited ("Playstack") is expected to be
EBITDA profitable during 2023, supported by the successful launch
of The Last Faith in Q4
2023
·
Cash at year end is no less than £9m, of which
unrestricted cash is no less than £5.5m, and the Group is fully
funded to profitability
Oxygen
Oxygen reinforced its number one
position in the market in 2023. It completed a planned investment
of more than £1.2m in its platform and people, with returns on this
investment expected to support scaling revenue and profitability in
2024 and beyond. It also acquired bidstats.uk, the UK's No 1 portal
for public sector tendering.
Revenue for 2023 is expected to be
no less than £6.2m (FY22: £5.3m). Core Early Payment revenue,
accounting for more than 65% of total revenue, grew in excess of
25%. These gains were tempered by flat revenue at its data
analytics arm Insight Solutions. This was caused by ongoing market
disruption and consolidation which Oxygen is set to benefit from in
the short to medium term.
Notwithstanding its planned
investment programme, Oxygen delivered another year of profitable
growth, generating EBITDA of no less than £1.3m (FY22:
£1.1m).
In addition to planned investment
and the purchase of bidstats.uk, Oxygen made its second cash
dividend payment to TruFin. This totalled £0.5m, up 100% on the
previous year (FY22: £0.25m).
By the end of FY23, 4,922 suppliers
had chosen to participate in Oxygen's Early Payment programmes,
transacting £1bn of invoices during the year. Additionally,
Oxygen's innovative FreePay programme saw 15,286 small suppliers
(FY22: 10,528) benefit from free early payments totalling £0.6bn.
This significantly boosted liquidity in Oxygen clients' local
economies.
Highlighting the strength of
Oxygen's client relationships and its cross-selling opportunities,
approximately half of Oxygen's Early Payment clients purchased two
or more products in 2023 (FY22: c17%). These factors, combined with
its market leading position and profitable growth trajectory,
underscore the Board's confidence in Oxygen's ability to deliver
significant value for shareholders and its attraction to potential
acquirers.
Oxygen has successfully integrated
bidstats.uk, which is performing in line with management
expectations.
Looking ahead, with a pipeline
exceeding 100 potential Early Payment clients (40 of which are in
the active engagement, commercial negotiation or documentation
stages) Oxygen's outlook is enviable.
Satago
2023 saw Satago continue to build
momentum and hit significant milestones. Notably, Lloyds Banking
Group (the "Bank") began migrating existing factoring clients onto
Satago's proprietary platform in H2 2023. Following this successful
test phase, a material portion of existing Bank clients are
expected to migrate during 2024.
Satago also delivered the next phase
of its platform in 2023, allowing the onboarding of the first 'new
to Bank' customer onto the platform. Satago will continue further
functionality development during 2024 in support of new client
onboarding and migration activities.
Looking ahead, Satago has attracted
significant interest in its digitised proposition both from UK and
overseas banks which it will foster whilst remaining focused on
developing its Lending as a Service ("LaaS") and Embedded Finance
solutions for existing clients.
During 2023, revenue increased more
than 70% to £3.8m (FY22: £2.2m). Growth was predominately driven by
Satago's successful rollout of its LaaS product and growing its
factoring book. This proprietary lending book continues to perform
well and is integral to the marketing of the overall product suite
for commercial partners.
Satago's subscription packages
performed strongly in 2023, with the number of paying subscribers
more than doubling to 967 (FY22: 430). Significant subscriber
growth is expected to continue in 2024 and beyond. The platform's
credit control and risk insights tools in particular are proving
transformational to customers.
Satago's strong performance in 2023
reflects its ongoing commitment to reducing late payment and
improving access to finance to an ever-growing pool of small and
medium-sized businesses.
Playstack
During 2023 Playstack
launched three critically acclaimed games,
The Last Faith,
AK-Xolotl and CityScapes: Sim Builder. It also
secured six platform deals across five separate titles,
demonstrating the broad appeal of its IP. Revenue for 2023 was no
less than £8.0m (FY22: £6.3m). This was short of expectations due
to platform deal delays.
Despite these delayed platform
deals, Playstack achieved its target of EBITDA profitability in
2023 after postponing some budgeted costs to mitigate the impact of
the revenue shortfall. Playstack remains in advanced negotiations
on the delayed platform deals.
In 2021, 85% of Playstack's revenue
was generated from one game; in 2023 Playstack generated 85% of its
revenue from eight games. With a healthy back catalogue and a
further six major games slated for release in 2024, this trend of
revenue diversification is set to continue.
Playstack is focusing its capital on
its core strengths - sourcing and publishing console games. Since
Playstack's inception, including all PC and console game
launches:
·
Average return on invested capital ("ROIC") on
PC/console game 'advances' to developers is 384% with a weighted
average internal rate of return ("IRR") per game of more than
300%
o Excluding the highest grossing game, the average ROIC in
PC/console game 'advances' to developers is 91%, with a weighted
average IRR per game of over 200%
o The
highest ROIC from a single game is currently more than
1,000%
·
Only one game published is expected to see
negative ROIC
o If
this game sold no more copies, Playstack would lose a total of £16k
on this title
Despite lower-than-expected
performance in Q4, Playstack's appealing returns profile -
underpinned by its disciplined and repeatable process for sourcing
and selecting games - gives the Board confidence that Playstack
will become meaningfully EBITDA profitable in 2024 and
beyond.
Notes
1 adjusted as if Vertus was sold on the corresponding date in
2022 ie 4 October
2 loss adjusted to remove share-based payment charges
implemented during 2023
For further
information, please contact:
TruFin
plc
James van den Bergh, Chief Executive Officer
Kam Bansil, Investor Relations
|
0203 743 1340
07779 229508
|
Liberum Capital
Limited (Nominated Adviser and Corporate
broker)
Chris Clarke
Edward Thomas
|
0203 100 2000
|
TruFin plc is the holding company of
an operating group comprising three growth-focused technology
businesses operating in niche markets: early payment provision,
invoice 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.