Interim Results

Finseta PLC
10 September 2024
 

Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.

 

10 September 2024

 

Finseta plc

("Finseta", the "Company" or the "Group")

 

Interim Results to 30 June 2024

 

Finseta (AIM: FIN), a foreign exchange and payments solutions company offering multi-currency accounts to businesses and individuals through its proprietary technology platform, is pleased to announce its unaudited interim results for the six months ended 30 June 2024 ("H1 2024").

 

Highlights

 

 

H1 2024

£m

H1 2023

£m

Change

Revenue

5.1

3.6

+£1.5m

Gross margin (%)

65.7%

61.0%

+4.7pps

Adjusted1 EBITDA

0.8

0.2

+£0.6m

Profit before tax

0.6

0.0

+£0.6m

Basic EPS (p)

0.79p

0.06p

+0.73p

Cash from operating activities

0.8

0.1

+£0.7m

 

·    Revenue increased by 40%, driven by on-going growth in active customers2 to 952 (H1 2023: 874) and an increase in average transaction value of 29% on H1 2023

·    Gross margin improvement of 470 basis points primarily driven by an increase in the proportion of revenue accounted for by direct clients to 100% (H1 2023: 91%), reflecting the strategic decision to offboard the historic white label business in prior years

·    Balance sheet further strengthened with cash and cash equivalents at 30 June 2024 of £2.8m (31 December 2023: £2.3m), resulting in net cash3 of £0.6m at 30 June 2024 (31 December 2023: £0.2m)

·    Continued strategic progress in the period:

New counterparty partnerships established to broaden the number of currencies and countries where the Group can transact - now able to pay out to over 165 countries in 140 currencies

Received regulatory approval to provide payment services in Canada; initial revenues expected in 2024

Signed agreement with Mastercard to launch corporate card scheme later in 2024

Adopted 'Finseta' as new company name to reflect differentiated offer and as part of strategic growth plan

·    The strong trading momentum in H1 2024 has continued into the second half, and the Group remains on track to report significant growth for full year 2024, in line with the Board's expectations

 

James Hickman, CEO of Finseta, said: "This has been a period of significant growth for Finseta, which builds on the work we commenced last year to execute on our renewed strategy. Through expanding our introducer network and payments capabilities, while maintaining a high level of customer service, we have increased the number of active customers and average transaction value. We also achieved strategic milestones that will be key drivers of future growth - most notably, signing an agreement with Mastercard to launch a corporate card scheme and receiving regulatory approval in Canada where we are in the process of launching a full-service office. 

 

"Looking ahead, the strong trading momentum that was experienced during the first six months of 2024 has been sustained into the second half and we are on track to report significant growth for full year 2024, in line with the Board's expectations. At the same time, with the excellent progress made in executing on our strategic priorities, we have strengthened our operations and the foundations to deliver long-term, sustainable growth. As a result, the Board continues to look to the future with great confidence."

 

Notes

1 Excluding share-based compensation, transaction costs, depreciation & amortisation charges, profit from the disposal of a subsidiary, other operating income related to interest on client balances and non-cash based accounting adjustments in respect of the Group's corporate premises

2 Defined as customers who traded through Finseta during the 12-month periods to 30 June 2024 and 2023 respectively

3 Defined as cash and cash equivalents less loan notes

 

 

Enquiries 

 

Finseta plc 

+44 (0)203 971 4865

James Hickman, Chief Executive Officer 

Judy Happe, Chief Financial Officer 

 

 

 

Shore Capital (Nominated Adviser and Broker) 

+44 (0)207 408 4090

Daniel Bush, Tom Knibbs (Corporate Advisory)

Guy Wiehahn (Corporate Broking)

 

 

 

Gracechurch Group (Financial PR) 

+44 (0)204 582 3500 

Harry Chathli, Claire Norbury, Henry Gamble

 

 

 

About Finseta

 

Finseta plc (AIM: FIN) is a foreign exchange and payments company offering multi-currency accounts and payment solutions to businesses and individuals. Headquartered in the City of London, Finseta combines a proprietary technology platform with a high level of personalised service to support clients with payments in over 165 countries in 140 currencies. With a track record of over 12 years, Finseta has the expertise, experience and expanding global partner network to be able to execute complex cross-border payments. It is fully regulated, through its wholly-owned subsidiaries, by the Financial Conduct Authority as an Electronic Money Institution and by the Financial Transactions and Reports Analysis Centre of Canada as a Money Services Business. www.finseta.com

 

Investor Presentation

 

James Hickman, CEO, and Judy Happe, CFO, will provide a live presentation via Investor Meet Company at 10.00am BST today. The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add to meet Finseta via: 

https://www.investormeetcompany.com/finseta-plc/register-investor



 

Strategic and Operational Review

 

Finseta delivered significant growth during the first half of 2024 as its expanded sales team and introducer network drove increases in active customer numbers and average transaction value. The Group also continued to enhance its products and services and execute on its strategy, with key initiatives being advanced that strengthen the foundations of the business and its ability to deliver sustained growth. In particular, the Group signed an agreement to launch a corporate card scheme with Mastercard and received regulatory approval in Canada, which both represent significant milestones for the business.    

 

Performance

 

The Group delivered substantial growth in revenue to £5.1m (H1 2023: £3.6m), which was driven by increases in active customers and average transaction value. Active customers increased to 952 compared with 874 for the first half of 2023 as the Group continued to expand its sales team and introducer network. Average transaction value increased by 29% over H1 2023 driven by an increased focus on providing an exceptional level of service to its corporate and high net worth individual ("HNWI") clients.

 

The Group completed its transition to only serving clients directly, with all revenue being generated by direct clients during the period (H1 2023: 91%). This contributed to a significant, 470 basis point, increase in gross margin in the period over the first half of 2023. By client type, there was an increase in revenue generated by both private clients (primarily HNWIs) and corporate accounts. The proportion of total revenue accounted for by private clients remained at 60% (H1 2023: 60%) with corporate accounts contributing 38% (H1 2023: 37%). For the majority of private client revenue, whilst the underlying transaction is with an individual, the relationship is via a corporate that provides services to the individual. In addition, the Group received £100k (H1 2023: £110k) in revenue, accounting for 2% of total revenue, as the final income generated under a licencing agreement with the acquirers of Avila House, a former subsidiary of the Group.

 

Strategy execution

 

The Group's growth strategy is founded on the three pillars of product, geography and people - Finseta made considerable progress against all three during the first half of 2024. This contributed to growth during the period, but also strengthened the drivers of growth for the years to come.   

 

Product

 

A core element of Finseta's strategy is to establish a global payments network that will enable clients to be able to pay in from, and pay out to, any jurisdiction (subject to regulatory restrictions) in any currency and via any payment method. While it is still relatively early days, a number of milestones in advancing towards this goal were achieved during the first half of the year.

 

Currencies & countries

 

The Group continued to expand its global payments network by establishing new counterparty partnerships. This enables the Group to broaden the number of currencies and countries where it can transact, as well as expanding the business sectors it can serve. The Group can now pay out to over 165 countries in 140 currencies compared with over 150 countries and 58 currencies this time last year.

 



 

Payment method

 

Finseta made significant progress in the period towards expanding its payment method offering with the signing of a long-term agreement with Mastercard to launch a corporate card scheme. The Group is on track to launch the scheme in the current year, when it will be able to issue commercial cards co-branded and supported by Mastercard for its corporate customers. This additional payment rail will provide greater choice and flexibility for clients in managing their business expenses and a further recurring income stream for Finseta as clients sign up to use the corporate card offering.

 

Service

 

A key differentiator of the Group's offer is the high level of personalised service provided to clients, along with the experience of Finseta's team and the strength of its compliance capabilities. The Group's Finseta Solutions offering, which was established in 2023 and is specifically focused on providing solutions to clients with more complex needs and require a higher level of service, made progress during the period. The Group has added further resource to this new offering as the number of customers and partners has continued to grow.

 

During the period, the Group undertook development work to enhance the functionality of the Finseta platform, which will further improve clients' experience. The Group expects to introduce the upgrades later this year.     

 

Geography

 

A core pillar of the Group's strategy is geography - that is, expanding its capabilities to enable clients to transact to and from anywhere in the world (subject to regulatory restrictions). This includes through establishing further counterparty relationships, as noted above, as well as expanding its own geographical footprint and regulatory capabilities.

 

A significant milestone was achieved with the Group receiving a Money Services Business ("MSB") licence from the Financial Transactions and Reports Analysis Centre of Canada. This allows the Group to operate a payments company in Canada and provide payments services to Canadian businesses and individuals. Having previously received enquiries in Canada for its services through its existing network, the establishment of a regulated business will enable the Group to fully pursue such opportunities and leverage local payment rails and lower transaction costs.

 

Following the receipt of the MSB licence, the Group commenced the process of establishing a full-service office in Canada, which it expects to open in the current year. This will allow the Group to provide customers in Canada with the high-touch service-led approach that is core to the Finseta offering.

 

The Group also continued to make progress with the regulatory approval process in other jurisdictions where it can leverage opportunities through its existing network and thereby maximise its resources.

 

People

 

As a high-touch, service-led business, the strength of Finseta's people is crucial. A fundamental contribution to the Group's growth during the period was the enhancement of its sales team, which commenced in the prior year. To strengthen its offer and drive its future growth, the Group also expanded, post period, its Finseta Solutions team, as well as appointing a Country Manager for Canada.

 

In addition, with the Group's client acquisition being predominantly introducer-led, relationships are key to Finseta's ongoing growth. The Group continued to expand and deepen its network of introducers in order to continue to increase its active customer numbers and diversify payment flows across a broader range of currencies.

 

Brand identity

 

In recognition of the substantial strategic progress that the Group has made and the development of its business - with a fundamentally expanded offer, capabilities and geographic footprint - the Group decided to adopt a new name. The Group wanted a name that better aligned its brand identity with its mission, values and the comprehensive range of services it provides. In particular, the Group needed a unique name that reflected its differentiated offer. Accordingly, the Group underwent a renaming process that commenced in the prior year and completed during the period with the adoption of 'Finseta'.

 

Financial Review

 

Revenue for the six months to 30 June 2024 increased by 40% to £5.1m compared with £3.6m for the first half of the previous year. On an underlying basis, to exclude revenue generated by white label partners in H1 2023, the Group's revenue grew by 54% in H1 2024 over H1 2023. This significant growth reflects an increase in active customers and in average transaction value, reflecting the Group's expansion of its sales team and introducer network and an increased focus on providing an exceptional level of service to its clients.

 

Gross margin improved to 65.7% (H1 2023: 61.0%), which is primarily due to the Group no longer deriving revenue from white label partners following its strategic decision to manage down its historic white label business. The improvement in gross margin combined with the increased revenue resulted in substantial growth in gross profit to £3.3m (H1 2023: £2.2m).

 

Operating expenses were £2.8m in H1 2024 compared with £2.2m for the first half of the previous year. This primarily relates to additional sales team hires and increased performance-related bonuses commensurate with the Group's performance; higher depreciation as a result of the Group's move to a new leased corporate premises in the second half of 2023; and lower other operating income as described below. Operating expenses as a proportion of revenue improved to 55% for the first half of 2024 (H1 2023: 62%).

 

Thanks to the strong operating performance, there was a substantial improvement in adjusted EBITDA to £831k compared with £190k for H1 2023. Adjusted EBITDA is stated after the add-back of other operating income, share-based compensation, profit from the disposal of a subsidiary and transaction costs, and the rental cost of the Group's corporate premises (see the statement of comprehensive income for further detail).

 

The Group generated other operating income of £93k (H1 2023: £184k) based on interest on client cash balances (see note 3 to the financial statements). Profit from operations increased to £628k compared with £138k for H1 2023.

 

Net finance costs were £59k (H1 2023: £115k), which primarily reflects £45k of bank interest receivable during the period (H1 2023: £nil).

 

As a result of the increased profit from operations and reduced finance costs, profit before tax grew substantially to £569k in H1 2024 compared with £23k for the first half of the prior year.

 

The Group had a tax charge of £118k compared with a tax credit in the prior year period of £12k, principally reflecting the increased profitability of the Group. The tax charge was satisfied through the consumption of a deferred tax asset and, accordingly, was a non-cash expense.

 

Basic earnings per share increased to 0.79 pence (H1 2023: 0.06 pence), which was achieved despite an increase in the weighted average number of ordinary shares in issue to 57,417,101 (H1 2023: 55,791,324). On a fully diluted basis, earnings per share were 0.74 pence (H1 2023: 0.06 pence).

 

Cash generated from operating activities increased significantly to £782k (H1 2023: £114k) based on the improved trading performance. Cash used in investing activities was £204k (H1 2023: cash from investing activities of £85k), which primarily consists of the continued investment in developing the Group's proprietary platform and a deferred consideration payment in respect of the February 2022 acquisition of Capital Currencies. This was partly offset by the receipt of the proceeds from the disposal of Capital Currencies, a non-trading subsidiary with all of the customer and employment contracts acquired in February 2022 having previously been novated to the Group's main trading entity, Finseta Payment Solutions Limited. Cash used in financing activities was £153k compared with £66k for H1 2023, with the difference primarily reflecting lease payments associated with the move to the new corporate premises.

 

As a result, as of 30 June 2024, cash and cash equivalents had increased to £2.8m (31 December 2023: £2.3m), resulting in net cash of £0.6m at 30 June 2024 (31 December 2023: £0.2m).

 

Outlook

 

The strong trading momentum of the first six months of the year has been maintained into the second half. Accordingly, the Group remains on track to report significant growth for full year 2024, in line with the Board's expectations.

 

This growth is being driven by the continued increase in the number of active customers as a result of the ongoing expansion of the Group's introducer network and continued investment in various revenue generating teams within the Group. The Group is also looking forward to the launch of its corporate card scheme and of its Canadian offering, which are expected to occur in the second half of 2024 and make an initial contribution to revenue.

 

Looking further ahead, with the excellent progress that the Group made during the period in executing on its strategic priorities, the Group has strengthened its operations and established the foundations to deliver long-term, sustainable growth. As a result, the Board continues to look to the future with great confidence.


Consolidated Statement of Comprehensive Income

 



Unaudited 6 months to 30 June 2024

 

Unaudited     6 months to 30 June    2023


 Audited

12 months to

              31 Dec            2023


Notes

£


£


£

Revenue


5,059,757


3,601,842


9,649,233

Cost of sales


(1,733,605)


(1,405,919)


(3,533,897)

Gross profit


3,326,152


2,195,923


6,115,336



 





Share-based compensation

6

(169,007)


(172,679)


(333,061)

Further adjustments to adjusted EBITDA (see below)


(126,564)


(63,306)


(357,348)

Other administrative expenses


(2,495,486)


(2,005,647)


(4,415,113)

Total administrative expenses


(2,791,057)


(2,241,632)


(5,105,522)

 


 





Other operating income

3

92,683


183,506


350,143



 





Adjusted EBITDA


830,666


190,275


1,700,223

Stated after the add-back of:


 





- other operating income


(92,683)


(183,506)


(350,143)

- share-based compensation

6

169,007


172,679


333,061

- transaction costs


-


4,500


4,500

- profit on disposal of subsidiary

8

(150,000)


(207,480)


(207,480)

- amortisation of intangible assets

7

279,153


256,707


533,649

- IAS 17 rent reversal


(156,600)


-


(61,613)

- depreciation of property, plant and equipment


154,011


9,579


88,292



 





Profit from operations

2

627,778


137,797


1,359,957



 





Finance and other income

4

45,000


-


21,363

Finance costs

4

(103,507)


(114,550)


(90,635)

Profit before tax


569,271


23,247


1,290,685

 


 





Income tax


(117,983)


11,699


843,168

Profit for the financial period


451,288


34,946


2,133,853

 


 





Total comprehensive profit for the period


451,288


34,946


2,133,853



 





Profit per share from continuing operations:


 





Profit per ordinary share - basic (pence)

5

0.79


0.06


3.77

Profit per ordinary share - diluted (pence)

5

0.74


0.06


3.76



 

 

 

 

 

 

 

 

 

Consolidated Statement of Financial Position

 



Unaudited as at 30 June 2024


Unaudited

as at 30 June 2023


Audited

as at 31 Dec 2023


Notes

£


£


£

ASSETS


 





Non-current assets


 





Intangible assets and goodwill

7

1,642,763


2,180,104


1,514,519

Tangible assets


36,314


30,923


34,356

Right-of-use assets

12

651,680


-


796,498

Deferred tax

13

579,921


-


697,864

 

 

2,910,678


2,211,027


3,043,237

Current assets

 

 





Trade and other receivables

9

1,057,289


1,503,464


1,359,641

Cash and cash equivalents


2,768,005


816,176


2,343,417



3,825,294


2,319,640


3,703,058



 





TOTAL ASSETS

 

6,735,972


4,530,667


6,746,295

 

 

 





Equity


 





Share capital

6

574,171


574,171


574,171

Share premium


6,191,748


6,191,748


6,191,748

Share-based payment reserve


949,396


620,006


780,389

Merger relief reserve


5,557,645


5,557,645


5,557,645

Contingent consideration reserve


-


999,859


-

Reverse acquisition reserve


(3,140,631)


(3,140,631)


(3,140,631)

Retained earnings


(7,856,499)


(10,406,693)


(8,307,787)

TOTAL EQUITY


2,275,830


396,105


1,655,535

 


 





Non-current liabilities


 





Loan notes

11

2,000,000


2,172,578


2,000,000

Deferred tax liability


-


88,117


-

Obligations under leases

14

399,293


-


543,555

Deferred consideration

15

-


-


111,323

 


2,399,293


2,260,695


2,654,878

Current liabilities


 





Trade and other payables

10

1,475,854


1,873,867


1,882,771

Loan notes

11

172,578


-


172,578

Obligations under leases

14

280,009


-


263,357

Deferred consideration

15

132,408


-


117,176

 


2,060,849


1,873,867


2,435,882

 


 





TOTAL EQUITY AND LIABILITIES


6,735,972

 

4,530,667


6,746,295

 


 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

 

 


Share capital

Share premium

Share-based payment reserve

Merger relief reserve

Contingent consideration reserve

Reverse acquisition reserve

Retained earnings

Total


£

£

£

£

£

£

£

£









 

At 1 January 2023

480,362

5,496,829

1,489,765

5,557,645

950,920

(3,140,631)

(10,924,791)

(89,901)

Issue of shares

35,299

194,143

-

-

-

-

-

229,442

Deferred equity-based consideration

-

-

-

-

48,939

-

-

48,939

Share-based payments

-

-

172,679

-

-

-

-

172,679

Settlement of equity-based incentives

58,510

500,776

(1,042,437)

-

-

-

483,151

-

-

-

-

-

-

-

34,946

34,946

 

At 30 June 2023

 

574,171

6,191,748

620,007

5,557,645

999,859

(3,140,631)

(10,406,694)

396,105

Deferred equity-based consideration

-

-

-

-

(771,360)

-

-

(771,360)

Transfer to deferred consideration liability

-

-

-

-

(228,499)

-

-

(228,499)

Share-based payments

-

-

160,382

-

-

-

-

160,382

Other comprehensive income

-

-

-

-

-

-

2,098,907

2,098,907

At 31 December 2023

574,171

6,191,748

780,389

5,557,645

-

(3,140,631)

(8,307,787)

1,655,535









 

Share-based payments

-

-

169,007

-

-

-

-

169,007

Other comprehensive income

-

-

-

-

-

-

451,288

451,288

 

At 30 June 2024

 

574,171

6,191,748

949,396

5,557,645

-

(3,140,631)

(7,856,499)

2,275,830

 

 

 

 

 

 

 

 

 

 

Consolidated Cash Flow Statement

 



Unaudited

 six months

to 30 June 2024


Unaudited

 six months

to 30 June 2023


Audited

12 months

 to 31 Dec 2023



£


£


£

Profit before tax


569,271


23,247


1,290,685

Adjustments to reconcile profit before tax to cash generated from operating activities:


 





Other operating income


8,274


-


(27,167)

Finance income


(45,000)


-


(21,363)

Finance costs


103,507


114,550


90,635

Share-based compensation


169,007


172,679


333,061

Profit on disposal of subsidiary


(150,000)


(207,480)


(207,480)

Depreciation and amortisation


433,164


266,286


621,941

Write-off of property, plant and equipment


-


-


519

Loss on disposal of property, plant and equipment


656


-


-

Decrease / (increase) in trade and other receivables


303,152


(164,354)


67,344

Decrease in trade and other payables


(609,691)


(90,969)


(194,021)

Cash generated in operating activities


782,340


113,959


 1,954,154

 

Investing activities


 





Purchases of property, plant and equipment


(13,304)


(824)


(11,081)

Internally generated software development


(235,711)


(213,694)


(491,013)

Proceeds from disposal of subsidiary


150,000


300,000


300,000

Settlement of deferred consideration


(105,431)


-


-

Cash (used) / generated in investing activities

(204,446)

 

85,482


(202,094)

 

 

 




Financing activities


 





Interest and similar income


35,883


-


10,587

Interest and similar charges


(32,589)


(65,611)


(39,963)

Lease payments


(156,600)


-


(61,613)

Cash used in financing activities


(153,306)


(65,611)


(90,989)

 


 





Increase in cash and cash equivalents

424,588

 

133,830

 

1,661,071

 

Cash and cash equivalents at beginning of period

 

 

2,343,417


682,346


682,346

Cash and cash equivalents at end of period


2,768,005


816,176


2,343,417

 



 

Notes to the financial statements

 

1.         General information and basis of preparation

 

Finseta plc is a public limited company, incorporated and domiciled in England. The Company was admitted to trading on AIM, London Stock Exchange's market for small and medium size growth companies, on 6 April 2021. The registered office of the Company is 14-18 Copthall Avenue, London, EC2R 7DJ. Finseta plc is a foreign exchange and payments company offering multi-currency accounts to businesses and individuals using a proprietary cloud-based multi-currency payments platform.

 

The consolidated financial information contained within these financial statements is unaudited and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. While the financial figures included in this interim report have been prepared in accordance with IFRS applicable to interim periods, this interim report does not contain sufficient information to constitute an interim financial report as defined in IAS 34. Financial information for the year ended 31 December 2023 has been extracted from the audited financial statements for that year. The accounting policies applied by the Group in this consolidated interim financial report are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2023.

 

The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings. Entities are accounted for as subsidiary undertakings when the Group is exposed to or has rights to variable returns through its involvement with the entity and it has the ability to affect those returns through its power over the entity.

               

                Details of subsidiary undertakings and % shareholding:

                Finseta Payment Solutions Ltd                                    -              100% owned by the Company

                Cornerstone Middle East FZCO                                   -              100% owned by the Company

Pangea FX Limited                                                           -              100% owned by the Company

Finseta Payments Corp                                                  -              100% owned by the Company

 

On 4 June 2024 the Group completed the sale of Capital Currencies Limited. The results of Capital Currencies were consolidated up to the date of disposal.

 

Going concern

During the period ended 30 June 2024, the Group made a profit of £451,288. As at 30 June 2024 the Group's Statement of Financial Position showed cash and cash equivalents of £2,768,005. The trading position of the Group has strengthened during 2024 with continued revenue growth coupled with a strong focus on cost control. As a result, the Group expects to continue generating a net positive cash flow during the second half of 2024.

 

The Board continues to closely monitor the Group's performance and considers a range of risks that could affect the future performance and position of the Group. The Board considers the Group has a reasonable expectation that it has adequate resources to continue to operate for the foreseeable future and therefore the financial statements are prepared on a going concern basis.

 

 

 

 

 

 

 

2.         Profit from operations

 

 



Unaudited six months to 30 June 2024


Unaudited

six months to 30 June

2023


Audited

12 months to 31 Dec

2023



£


£


£

Profit from operations is stated after charging/(crediting):


 





Share-based compensation


169,007


172,679


333,061

Transaction costs


-


4,500


4,500

Expensed software development costs


36,117


33,189


58,792

Depreciation of property, plant and equipment


9,193


9,579


15,883

Depreciation of right-of-use assets


144,818


-


72,409

Amortisation of intangible assets


279,153


256,707


533,649

Profit on disposal of subsidiary


(150,000)


(207,480)


(207,480)

Short-term (2018 IAS 17 operating) lease                                       rentals


-


137,236


-

 

 

3.         Other operating income

 

 



Unaudited six months to 30 June 2024


Unaudited

six months

to 30 June 2023


Audited

12 months

to 31 Dec 2023



£


£


£

Interest receivable from client cash balances


92,683


183,506


350,143

 

Other operating income represents interest generated from client cash balances. The current interest rate environment means that these accounts can be interest bearing, whilst fulfilling regulatory safeguarding requirements. Under the terms of the Group's Electronic Money Licence, the Group is not able to pass any of the interest earned back to the clients.

Whilst the increased interest stream is a positive boost for the Group and a natural by-product of its increasingly diversified product offering, the Group is mindful that aspects of its dynamics are driven by macroeconomics beyond its control. The Group has therefore chosen to recognise interest income on client balances as 'other operating income', not revenue on the face of the Consolidated Statement of Comprehensive Income. For the same reason, interest income has been excluded from the presentation of adjusted EBITDA.

Interest earned on Finseta's own cash is recognised within finance and other income in the Consolidated Statement of Comprehensive Income.



 

4.         Interest and similar items

 

 



Unaudited six months to 30 June 2024


Unaudited

six months

to 30 June 2023


Audited

12 months

to 31 Dec 2023



£


£


£

Total finance and other income


 





Bank interest receivable


45,000


-


21,363

 

Total finance costs


 





Unwinding / (release) of discount


9,340


48,939


(56,459)

Loan note interest


65,177


65,129


130,306

Other interest payable and charges


-


482


483

Interest on lease liabilities


28,990


-


16,305



 

103,507

 


 

114,550


90,635

 

 

5.         Earnings per share

 

 



Unaudited six months to 30 June 2024


Unaudited

six months

to 30 June 2023


Audited

12 months

to 31 Dec 2023



£


£


£

Statutory profit


451,288


34,946


2,133,853



 





Weighted average number of shares used in basic EPS


57,417,101


55,791,324


56,613,145

Effect of dilutive share options


3,444,861


-


161,510



 





Weighted average number of shares used in diluted EPS


60,861,962


55,791,324


56,774,655



 





Earnings per share (pence)


 







 





Statutory total earnings per share


 





Basic


0.79


0.06


3.77

Diluted


0.74


0.06


3.76

 



 

6.         Share capital

 

Allotted, called up and fully paid


                                 Ordinary shares

 

        Share capital


No.

 

£


 

 

 

Ordinary shares of £0.01 each at 30 June 2024, 31 December 2023 and 30 June 2023

 

57,417,101

 

 

574,171

 

 

 

 

 

 

 

 

 

Options

 

On 22 February 2024, the Company granted 470,000 options under its equity-settled share-based remuneration schemes for employees with a weighted average exercise price of £0.32 and a vesting period between 1 and 3 years. 

 

The Black-Scholes model was used for calculating the cost of options. The model inputs for the options issued were:

 

Share price at grant date               - £0.31

Risk-free rate                                     - 4.2%

Expected Volatility                            - 117.5%

Contractual life                                  - 5 years

 

During the period 20,000 options were forfeited (H1 2023: 248,360) at a weighted average exercise price of £0.12 per share.  No warrants expired during the period (H1 2023: 63,114).

 

Share-based compensation charge

The Group's share-based compensation charge for the period ended 30 June 2024 of £169,007 (H1 2023: £172,679) consists of £64,172 (H1 2023: £49,115) in respect of warrants (including the impact of warrant expirations) and £104,835 (H1 2023: £123,564) in respect of share options granted under the Company's share option scheme (including the impact of option forfeitures.

 



 

7.         Intangible assets

 


Internally developed software

£


 

Software costs

£


 

Customer relationships

£


Goodwill

£


Trademarks

£


Total

£

COST












As at 1 January 2024

1,515,097


15,611


615,756


420,300


46,114


2,612,878

Additions

396,423


-


-


-


10,974


407,397

At 30 June 2024

1,911,520

 

15,611

 

615,756

 

420,300

 

57,088

 

3,020,275













AMORTISATION












As at 1 January 2024

869,189


15,611


213,559


-


-


1,098,359

Charge for the period

217,578


-


61,575


-


-


279,153

As at 30 June 2024

1,086,767

 

15,611

 

275,134

 

-

 

-

 

1,377,512













NET BOOK VALUE












At 30 June 2024

824,753

 

-

 

340,622

 

420,300

 

57,088

 

1,642,763

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2023

630,069


-


463,773


1,086,262


-


2,180,104













At 31 December 2023

645,908


-


402,197


420,300


46,114


1,514,519













 

 

8.         Disposal of Capital Currencies Limited

 

On 4 June 2024, the Group completed the sale of Capital Currencies Limited to Universe Payments Ltd and received £150,000 in cash consideration following the receipt of regulatory approval for the transaction from the FCA. The only asset held in Capital Currencies Ltd at the date of sale was an API licence with a £nil net book value. The profit on disposal recognised by the Group upon the sale of Capital Currencies Limited was therefore £150,000.

 

9.         Trade and other receivables

 



Unaudited

as at 30 June 2024


Unaudited

as at 30 June 2023


Audited

 as at 31 Dec 2023



£


£


£



 





Trade receivables


308,410


347,655


347,491

Prepayments and accrued income


344,389


152,238


152,281

Derivative financial assets at fair value


184,660


674,424


340,241

Other receivables


145,359


52,523


147,536

Taxes and social security


74,471


276,624


372,092



 





Total trade and other receivables


 

1,057,289

 


 

1,503,464


 

1,359,641

 

10.      Trade and other payables

 

 

 


Unaudited

as at 30 June 2024


Unaudited

as at 30 June 2023


Audited

as at 31 Dec 2023



£


£


£



 





Trade payables


412,134


216,298


248,493

Derivative financial liabilities at fair value


468,653


767,557


279,097

Other taxes and social security


165,986


391,513


480,612

Other payables and accruals


429,081


498,499


874,569



 





Total trade and other payables


 

1,475,854

 


 

1,873,867


 

1,882,771

 

 

11.      Loan Notes

 

 

 


Unaudited

as at 30 June 2024


Unaudited

as at 30 June 2023


Audited

as at 31 Dec 2023



£


£


£

CURRENT

Convertible loan notes


172,578


-


172,578

 

NON-CURRENT

Loan notes


2,000,000


2,172,578


2,000,000

 

 

The non-current non-convertible loan notes comprise £2,000,000 issued to Robert O'Brien, a major shareholder in the Company and employee of the Group, repayable on 31 July 2026 and £172,578 of deferred consideration in relation to the acquisition of Pangea FX Limited. The Pangea FX Limited loan note is payable contingent upon achieving future revenue targets over a period of two years from the acquisition date. These targets were achieved at the end of the measurement period ended 31 August 2024 and the loan note will be repaid in full in September 2024.

 

Both loan notes have a 6% coupon rate payable quarterly in arrears.

 

 

 

 

 

 

 

 

12.      Right-of-use assets

 

 

 


Leasehold property




£


COST


 


At 1 January 2024 and 30 June 2024


868,907




 


AMORTISATION


 


At 1 January 2024


72,409


Charge for the period


144,818


At 30 June 2024


217,227




 


NET BOOK VALUE


 


At 30 June 2024


651,680




 


At 30 June 2023


-




 


At 31 December 2023


796,498


 

 

13.      Deferred tax

 


Acquired intangibles

£


 

Fixed asset and other temporary differences

£


Tax losses

 

£


Total

£









As at 1 January 2024

(100,549)


(19,748)


818,161


697,864

Utilised during the period

-


-


(153,773)


(153,773)

Credit during the period

15,394


20,436


-


35,830

At 30 June 2024

(85,155)

 

688

 

664,388

 

579,921














Current


525,888






Non-current


54,033









At 30 June 2023

(115,943)


27,826


-


(88,117)

 








 





Current


-

 





Non-current


(88,117)

 

 

 

 

 

14.      Obligations under leases

 

 

 


Leasehold property




£




 


At 1 January 2024


806,912


Finance costs


28,990


     Payments


(156,600)


At 30 June 2024


697,302




 


Current


280,009


Non-current


399,293




 




 


At 30 June 2023


-




 


 

15.      Deferred consideration

 


£



 


At 1 January 2024


228,499


Finance costs


9,340


     Payments


(105,431)


At 30 June 2024


132,408




 


Current


132,408


Non-current


-




 


At 30 June 2023


-




 


 

16.      Related party transactions

 

In addition to the transaction included in Note 11, as at 30 June 2024, an amount of £8,750 was due from Terry Everson, a former director of Finseta Payment Solutions Limited and a shareholder in the Company (30 June 2023: £8,750).

 

17.      Events after the reporting date

 

None

 

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