TIDMSYME
RNS Number : 2895N
Supply @ME Capital PLC
29 January 2021
SUPPLY@ME CAPITAL PLC
(PREVIOUSLY ABAL GROUP PLC)
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIODED 30 JUNE 2020
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
COMPANY INFORMATION
Directors Enrico Camerinelli
Susanne Chishti
Dominic White
Alessandro Zamboni
Secretary MSP Corporate Services Limited
27/28 Eastcastle Street
London
W1W 8DH
Company number 03936915
Registered office 27/28 Eastcastle Street
London
W1W 8DH
Auditor Crowe UK LLP
55 Ludgate Hill
London
EC4M 7JW
Broker Stanford Capital Partners Ltd
15-17 Eldon Street
London
EC2M 7LD
Solicitors Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Bankers Metro Bank Plc
1 Southampton Row
Holborn
London
WC1B 5HA
Registrars Neville Registrars Limited
Neville House
Southampton
SO14 2JF
Public Relations Cicero/AMO
3 Pancras Square
London
N1C 4AG
Accountant Azets
Carnac Place
Cams Hall Estate
Fareham
PO16 8UY
Investor Relations Walbrook PR Ltd
4 Lombard Street
London
EC3V 9HD
Website www.supplymecapital.com
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CONTENTS
Chief Executive's report
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of changes in equity
Condensed consolidated statement of cash flows
Notes to the financial statements
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CHIEF EXECUTIVE'S REPORT
FOR THE 6 MONTH PERIODED 30 JUNE 2020
Current business activity
The Supply@ME platform ("Platform") aligns Client companies
(manufacturing and trading companies) seeking to monetise part of
their inventory for cash, with Inventory funders (banks, financial
institutions and investment funds). The Inventory funders invest
through the Platform into portfolios of inventory assets through
multiple funding routes including Securitisation Vehicles.
1. Inventory funding programme
The Company is developing three routes to funding its
monetisation service.
i) Open-Funding
Open-Funding is raising capital for Inventory Monetisation
through securitisation vehicles or other third-party financing
facilities.
Client Companies are sourced by Supply@ME via its commercial
partners.
There are currently two Open-Funding structures being
marketed.
The first Open-Funding structure is an inventory-backed
securitisation note programme, arranged and distributed by
StormHarbour Securities LLP. The second Open-Funding structure is a
Shariah compliant investment product. This widens the potential
investor base for the inventory monetisation platform to include
the Islamic Finance Industry.
The Open-Funding objective is to create an entirely new
Inventory Monetisation investment asset class that reflects best
practice operating and structuring principles in the securitisation
and Shariah markets, and more generally in the asset management
sector. This aims to deliver repeatable and scalable investment
products for subsequent rounds of inventory monetisation
transactions.
Separate announcements will be made, as appropriate, regarding
the final stage of the first securitisation transaction and the
first round of the Shariah funding..
ii) Captive-Funding
Captive-Funding is gathering financing through a strategic
"captive" relationship with a bank. The bank (the "Bank"), located
in Europe, is in the process of being acquired by a partnership
between the Company's shareholders, The AvantGarde Group S.p.A.
("Co-investor"), and Quadrivio Group and its institutional
investment fund "Industry 4.0" (the "Financial Partner").
Client Companies are sourced by Supply@ME, via its commercial
agreements, the Bank and potentially the wider network of Quadrivio
Group and its Partners.
The Bank will be owned by the Financial Partner and the
Co-investor and will be independent of Supply@ME. The Financial
Partner has committed to recapitalise the Bank. The Company will
not be a shareholder and has no costs relating to the transaction.
Supply@ME will, however, be the main beneficiary of the acquisition
which will provide funding through the Platform via a "banking as a
service" model.
iii) Self-Funding
Self-Funding is raising capital through banks and other
institutions ("Self-Funders") that also offer the Inventory
Monetisation service directly to their customers, such that the
banks and their client base can benefit from the systems,
assessment, and monitoring processes of Supply@ME's Platform.
Client companies are sourced by the Self-Funders.
The Company is now working with several Banks across the
jurisdiction it is now ready to serve (Italy, UK, UAE) in order to
design an integrated service model, and is also considering the
upcoming key role of the Captive Bank as anchor Inventory
funder.
Furthermore, discussions are in place with a number of Insurance
Companies in order to create:
-- a financial guarantee in favour of the Inventory Funders through the Platform;
-- a dedicated inventory insurance product aimed at generating a
new revenue stream for the Company.
The overall objective of the multiple funding channels is to
support a continuous inventory monetisation programme with monthly
transactions. In this regard, as well as completing the first
Open-Funding securitisation transaction, the Company expects to
have delivered on Captive-Funding and Self-Funding initiatives by
the end of the first quarter of 2021.
2. Client Company origination
The portfolio of Client Companies continues to grow and now
includes mid-cap and large-cap businesses from Italy, the UK and
MENA regions.
Gross origination of Client companies increased 30% between
September 2020 and end December 2020.
Value (Euro) 31.3.20 30.6.20 30.9.20 31.12.20
Gross origination (1) 1.22bn 1.43bn 1.64bn 2.13bn
-------- -------- -------- ---------
Number of client companies 82 97 142 165
-------- -------- -------- ---------
((1 ") Gross origination" includes all client companies that
have signed an NDA, a term sheet, or are in or have completed the
onboarding process)
According to the GICS classification (www.msci.com/gics) adopted
by the Company, the core key portfolio sectors are currently
Materials, Capital Goods, Retailing and Food, Beverage &
Tobacco.
The Client Company origination and on-boarding process is itself
a revenue stream for the Company, since it generates up-front due
diligence fees paid by eligible corporates whose inventory will be
part of the portfolio of inventory monetised.
3. Business expansion
UK
The Company is working to make the UK a key hub for its
Inventory Monetisation service as well as a "pivot" location for
cross-border monetisation operations (ideal for large corporates
with inventory in a number of global locations). The UK operating
subsidiary, Supply@Me Ltd, has recently been established from which
UK operations will be managed, including recruitment of a local
executive team, sourcing Client Companies and interfacing with
Inventory funders.
As announced on 30 November 2020, Supply@ME has signed
agreements with two "eco-system partners" SIA Group
(www.sia-group.co.uk) and ALTIMAPA Capital (www.altimapa.com). In
addition, given the international expansion of the Company, it has
agreed an on-going collaboration with one of the "Big Four"
professional services groups that is active in the development of
International Financial Reporting Standards (IFRS) relating to the
multi-jurisdictional themes of Inventory Monetisation.
In relation to the Inventory Monetisation programme for UK
companies, Supply@ME:
-- has agreed a Heads of Terms with a global asset manager for
an Inventory funding facility with a potential value up to EUR500m.
The Platform is arranging a first portfolio of UK corporates,
and
-- is negotiating a memorandum of understanding with a
specialised trade finance fund to benefit from synergies relating
to UK Client Company origination.
MENA regions
The Company announced on 20 January 2021 that the approval of
the Shariah compliant version of the Platform had been successfully
completed.
Supply@Me also announced in January that it had agreed a
co-operation agreement with Lenovo Financial Services, through
which it will offer its Inventory Monetisation service to potential
Client Companies in the region. The Company is keen to develop
further Client Company sourcing partnerships to ensure that as it
grows its multi-channel funding capability, it has developed in
parallel an ability to source high quality Client Company inventory
at volume.
Furthermore, the Company is continuing its dialogue with
government parties in the region with the objective of offering the
Inventory Monetisation process to certain of their sector holding
companies as an add-on to their existing digital warehouse
solutions.
The Company intends to establish a wholly owned subsidiary in
the UAE from which local operations will be managed.
US
The Company and The Trade Advisory are progressing with the
development of a first pilot Inventory Monetisation operation
within the retail sector and are evaluating an opportunity to
deliver an innovative inventory "in transit" monetisation model.
Supply@ME is evaluating potential operating partnerships with
international freight forwarding companies that could achieve this
outcome.
4. Other operational considerations
Digital workplaces
The Company now has operating offices in London and Milan.
To maximise productivity during COVID-19 the Group has activated
an integrated Microsoft productivity suite which allow employees,
contractors and partners to work digitally across the Platform
service model, including the digitised signing of contracts with
the Client companies.
Production management
The system architecture of the Platform is made of several
components that are managed in partnership with SIA:
-- software modules focussed on the management of inventory trading and monitoring activities;
-- productivity tools aimed at sharing information (data and documents) via cloud technology;
-- database infrastructure aimed at storing data, also use of blockchain technology.
The Company considers its partnership with SIA
(https://www.sia.eu/en) as a strategic asset, particularly
considering the recent merger between SIA and NEXI that will create
a EUR15 billion- payment giant and the largest blockchain service
provider in Europe (source: fintechfutures.com).
Intellectual Property
The Company continues to evaluate further forms of intellectual
property protection, in particular relating to its innovative
true-sales model and related legal contract framework.
Internet-of-things
The Company, as outlined in its business plan, is exploring
potential joint business alliances with Internet-of-things vendors
such that it can begin to develop a unique "Internet of Inventory"
tracking and monitoring product to enhance its offer.
Public relations activities
Since June 2020, in addition to Walbrook Financial PR the
Company engaged Cicero/ AMO (https://cicero-group.com) as
full-service communications and market research partner.
Walbrook and Cicero support the formal financial markets
reporting and wider marketing and brand development activities of
Supply@ME and are preparing an appropriate awareness campaign in
the UK and international media once the first securitisation
transaction has been completed.
Internal controls over financial reporting
In October 2020, the Company engaged with a specialised
headhunter to source and appoint a permanent CFO. A short list of
three highly qualified candidates hase been selected and each
candidate has been interviewed.A final decision is pending.
Future prospects
As well as completing the first Open-Funding securitisation
transactions, in 2021 the Company expects to launch and grow its
Captive Bank and Shariah funding routes. The multi-channel
Inventory funding opportunity widens the Platform's potential
investor base and therefore improves its fund- raising
potential.
As stated in the article "Global Supply Chains in a
Post-Pandemic World" (by Willy C. Shih, the Robert and Jane Cizik
Professor of Management Practice in Business Administration at
Harvard Business School), when the Covid-19 pandemic subsides, the
world is going to look markedly different. The supply shock that
started in China and the demand shock that followed as the global
economy shut down, exposed vulnerabilities in the production
strategies and supply chains of firms everywhere. As a consequence,
the article notes that manufacturers worldwide are going to be
under greater political and competitive pressures to increase their
domestic production, grow employment in their home countries,
reduce or even eliminate their dependence on sources that are
perceived as risky, and rethink their use of lean manufacturing
strategies that involve minimizing the amount of inventory held in
their global supply chains. In this regard, if alternate suppliers
are not immediately available, a company will need to determine how
much extra stock to hold in the interim, in what form, and where
along the value chain.
The expected timing of the completion of the first inventory
securitisation and growth of the multi-channel funding inventory
potential fits well with this economic outlook.
This new landscape and acknowledged growth in global inventories
post pandemic re-confirms the Company's belief in the large and
growing international market for its inventory funding services.
Supply@ME continues with its mission to become the leading global
fintech operator in the Inventory Monetisation sector.
Financial performance
Turnover in the 6 months to 30 June 2020 increased to GBP368k
(2019: GBP11k). This resulted in a gross profit of GBP368k (2019:
GBP11k). Exceptional listing costs of GBP1.369k have been written
off.
The material items on the consolidated statement of financial
position that merit comment include the following:
Prior to the completion of the reverse acquisition, the current
directors considered Supply@Me Capital plc did not meet the
definition of a business in accordance with IFRS 3. Consequently,
the reverse acquisition has not been accounted for as business
combination, but as a share-based payment.
On 23 March 2020, Supply@Me Capital plc completed the following
transactions, details of which are disclosed in the prospectus
dated 4 March 2020 (the Prospectus):
-- reverse acquisition of Supply@Me S.r.l., a company registered in Italy;
-- placing of 331,604,094 shares; and
-- admission to the Official List and trading on the London Stock Exchange's Main Market.
The transaction was effected by way of the issue of
consideration shares. Due to Supply@Me Capital plc effectively
having no substance, and that Supply@Me S.r.l. was acting as the
parent of the Group, the consolidated Group is accounted for as a
capital reorganisation rather than a business combination. These
interim financial statements have been prepared, in consultation
with the Company's accountants, on the basis that Supply@Me S.r.l.
is the accounting acquirer and Supply@Me Capital plc the accounting
acquiree.
As such, from an accounting perspective, the previous
comparatives, and any results prior to 23 March 2020 of Supply@Me
Capital plc have not been presented, and the assets and liabilities
of Supply@Me S.r.l. have been recorded in the consolidated
financial statements at their pre-combination amounts.
SYME has recently changed its accounting reference date to 31
December, as announced in a previous RNS.
Directors' Responsibility Statement
The Directors are responsible for preparing the interim
financial statements in accordance with applicable law and
regulations. A list of current directors is maintained on the
Group's website: https://www.supplymecapital.com.
The Directors confirm that, to the best of their knowledge, the
interim financial statements have been prepared in accordance with
IAS 34 as adopted by the European Union, and give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company, or the undertakings included in the
consolidation as a whole as required by DTR 4.2.4 R.
The Directors further confirm that the interim financial
statements include a fair review of the information required by DTR
4.2.7R and DTR 4.2.8R.
In accordance with the FCA's Disclosure and Transparency Rule
4.2.9(2), the Directors confirm that these interim condensed
consolidated financial statements have not been audited or reviewed
by auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.
The Directors have shared all the relevant working papers with
their advisers and auditors.
By Order of the Board
Alessandro Zamboni
Chief Executive Officer
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIODED 30 JUNE 2020
6 months 6 months
to to
30 June 2020 30 June 2019
Notes GBP '000 GBP '000
Revenue 4 368 11
Cost of sales - -
Gross profit 368 11
Administrative expenses (1,112) (124)
Exceptional costs 5 (1,369) -
Operating profit / (loss) (2,113) (113)
Finance costs - -
Profit / (loss) before tax (2,113) (113)
Taxation 6 (29) -
Profit / (loss) for the period / year (2,142) (113)
============== ==============
Loss per share (pence) 7 (0.01) n/a
6 months 6 months
to to
30 June 2020 30 June 2019
Notes GBP '000 GBP '000
Profit / (loss) for the period / year (2,142) (113)
Other comprehensive income
Foreign operations FX translation 4 (3)
Total comprehensive profit / (loss)
for the period / year (2,138) (116)
============== ==============
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
30 June 2020 30 June 2019
Notes GBP '000 GBP '000
Assets
Non-current assets
Intangible assets 8 1,054 321
Tangible assets 3 -
Investments - -
------------- -------------
1,057 321
Current assets
Trade and other receivables 2,159 302
Cash and cash equivalents 892 2
------------- -------------
3,051 304
------------- -------------
Total assets 4,108 625
============= =============
Equity and liabilities
Equity
Share capital 9 5,420 142
Reserves 10 (4,418) (104)
------------- -------------
1,002 38
Current liabilities
Trade and other payables 3,058 587
Derivative financial instruments 48 -
------------- -------------
3,106 587
------------- -------------
Total equity and liabilities 4,108 625
============= =============
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIODED 30 JUNE 2020
Merger Reverse Foreign
Share Share Other relief takeover currency Retained
capital premium reserves reserve reserve reserves earnings Total
GBP GBP '000 GBP '000 GBP GBP '000 GBP '000 GBP '000 GBP
'000 '000 '000
B/f as at
1 January
2019 142 - - - - - 12 154
FX translation - - - - - - - -
B/f as at
1 January
2019 post
FX translation 142 - - - - - 12 154
Loss for the
6 months - - - - - - (113) (113)
FX translation
differences - - - - - (3) - (3)
--------- --------- ---------- --------- ---------- ---------- ---------- --------
Total comprehensive
profit for
the year - - - - - (3) (113) (116)
C/f as at
30 June 2019 142 - - - - (3) (101) 38
FX translation (7) - - - - - (5) (12)
B/f as at
1 July 2019
post FX translation 135 - - - - (3) (106) 26
Profit for
the 6 months - - - - - - 321 321
FX translation - - - - - - - -
differences
--------- --------- ---------- --------- ---------- ---------- ---------- --------
Total comprehensive
loss for the
period - - - - - - 321 321
C/f as at
31 December
2019 135 - - - - (3) 215 347
FX translation 9 - - - - - 15 24
B/f as at
1 January
2020 post
FX translation 144 - - - - (3) 231 372
Loss for the
period - - - - - - (2,142) (2,142)
FX translation
differences - - - - - 5 - 5
--------- --------- ---------- --------- ---------- ---------- ---------- --------
Total comprehensive
loss for the
period - - - - - 5 (2,142) (2,137)
Placing shares 7 2,233 - - - - - 2,240
Reverse takeover
of Supply@Me
S.r.l. 5,269 9,252 50 223,831 (237,875) - - 527
C/f as at
30 June 2020 5,420 11,485 50 223,831 (237,875) 2 (1,911) 1,002
========= ========= ========== ========= ========== ========== ========== ========
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTH PERIODED 30 JUNE 2020
6 months 6 months
to to
30 June 2020 30 June 2019
GBP '000 GBP '000
Cash flows from operating activities
Profit / (loss) before income tax (2,113) (113)
FX translation of foreign entities 3 (3)
Amortisation 136 59
Deemed cost of listing 1,369 -
(Increase) /decrease in trade and other (877) -
receivables
Increase /(decrease) in trade and other
payables (3) (141)
Other decreases /(increases) in net
working capital 574 214
-------------- --------------
Cash flows from operations (911) 16
Income taxes paid - -
-------------- --------------
Net cash flows from operating activities (911) 16
Cash flows from investing activities
Cash from Abal plc 91 -
Purchase of tangible assets (2) -
Purchase of intangible assets (459) (8)
-------------- --------------
Cash flows from investing activities (370) (8)
Cash flows from financing activities
Decrease in short term bank loans - (2)
New loans 125 (6)
Net proceeds from issue of shares 1,896 -
Cash flows from financing activities 2,021 (8)
Net movement in cash and cash equivalents 740 -
Cash and cash equivalents as at 1 January 152 2
Cash and cash equivalents as at 30 June 892 2
============== ==============
SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIODED 30 JUNE 2020
1. Company information
Supply@Me Capital plc is a public limited liability company
incorporated in England and Wales. The address of its registered
office 27/28 Eastcastle Street, London, W1W 8DH, United Kingdom.
Supply@Me Capital's shares are listed on the London Stock
Exchange.
The Interim Financial Statements have been approved for issue by
the Board of Directors on 28 January 2021.
2. Basis of preparation
Accounting convention
The Interim Financial Statements are for the 6 months ended 30
June 2020 and are presented in Sterling, which is the functional
currency of the Group. They have been prepared in accordance with
IAS 34 'Interim Financial Reporting'. They do not include all of
the information required in annual financial statements in
accordance with IFRS and should be read in conjunction with the
consolidated financial statements for the period ended 31 December
2019.
The Interim Financial Statements have been prepared in
accordance with the accounting policies adopted in the Group's most
recent annual financial statements for the period ended 31 December
2019, with the exception of the policies noted below.
Prior to the completion of the reverse acquisition, as disclosed
in note 3, the current directors considered Supply@Me Capital plc
did not meet the definition of a business in accordance with IFRS
3. Consequently, the reverse acquisition has not been accounted for
as business combination, but as share based payment.
As a result of the reverse takeover, the consolidated financial
statements for the period ended 31 December 2019 have not been
included as comparative information, as the Group's activities have
changed significantly and those results are not considered
comparable.
Significant changes in accounting policies
Revenue recognition
Revenues are recorded net of returns, discounts and rebates as
well as directly related taxes with the provision of the
services.
Revenues for services are recognised on the basis of the
performance and in accordance with the related contracts. Revenues
relating to contract work in progress are recognised
proportionately with the progress of the works.
Revenue is deferred where it relates to the provision of future
services and is subsequently recognised when key milestones are
reached.
Intangible assets
Intangible assets are recognised at their cost price plus any
associated costs of bringing the asset into use. Development costs
not meeting the criteria for capitalisation are expensed in the
period in which they are incurred.
Amortisation begins from the month the asset is brought into use
at the following rates:
Acquisition of company branch 20% straight line
Software development 20% straight line
Research and development 20% straight line
Legal project development 20% straight line
Website and marketing 20% straight line
At the end of each accounting period the Group assess the
recoverable amounts of intangible assets. Where there is an
indication of impairment, an impairment loss is recognised for the
amount by which the assets carrying value exceed its recoverable
amount. Impairment losses are recognised in the profit and
loss.
New and revised accounting standards and interpretations
IFRS 16 Leases became effective for annual periods beginning on
or after 1 January 2019. The directors have considered the impact
of this new standard in the preparation of these interim
statements. At this time, the group does not have any lease
arrangements and therefore no adjustments are considered necessary
as a result of this new standard.
3. Significant changes in the current reporting period
On 23 March 2020, Supply@Me Capital plc completed the following
transactions, details of which are disclosed in the prospectus
dated 4 March 2020:
-- reverse acquisition of Supply@Me S.r.l., a company registered in Italy;
-- 32,322,246,220 ordinary shares were issued as consideration;
-- placing of 331,604,094 shares; and
-- admission to the Official List and trading on the London
Stock Exchange's Main Market (Standard list).
The consideration shares were issued on the basis of an
independent professional valuation commissioned by the Board on
behalf of the Company that ascribes to such consideration shares an
issue price of GBP0.006945 per consideration share. The placing
shares were issued at the price of GBP0.006756 per placing
share.
The transaction was effected by way of the issue of
consideration shares. Due to Supply@Me Capital plc effectively
having no substance, and in fact Supply@Me S.r.l. was acting as the
parent of the Group, the consolidated Group is accounted for as a
capital reorganisation rather than a business combination. These
interim financial statements have been prepared on the basis that
Supply@Me S.r.l. is the accounting acquirer and Supply@Me Capital
plc the accounting acquiree.
As such, from an accounting perspective, the previous
comparatives, and any results prior to 23 March 2020 of Supply@Me
Capital plc have not been presented and the assets and liabilities
of Supply@Me S.r.l. have been recorded in the consolidated
financial statements at their pre-combination amounts.
Since the release of the interim results for the six months
ended 31 March 2020, our advisors and their technical teams have
amended the basis under which the consolidated accounts have been
prepared. The former interim results showed a write off of GBP225m
through the profit and loss account. Under the revised basis, this
amount of GBP225m has been taken directly to the consolidated
balance sheet reserves, as described in the Consolidated Statement
of Changes in Equity.
This technical change in accounting methodology for the
consolidation does not affect the net assets of the group nor does
it affect the underlying trading results of the group.
The revised deemed cost of the listing under IFRS 2 of GBP1,369k
has been charged directly to the profit and loss account as an
exceptional cost.
4. Revenue and operating segments
There is one continuing class of business, being the investment
in the financial technological sector. Given that there is only one
continuing class of business, operating within Italy no further
segmental information has been provided.
5. Exceptional costs
6 months 6 months
to to
30 June 2020 30 June 2019
GBP '000 GBP '000
Deemed cost of listing 1,369 -
============== ==============
As explained in note 2, the reverse acquisition of Supply@Me
S.r.l. does not meet the requirements of IFRS 3 Business
Combinations so has been accounted for under IFRS 2 Share Based
Payments. Under IFRS 2, the deemed costs of obtaining the listing
has been expensed to profit and loss.
6. Taxation
Income tax liabilities for the period to 31 March 2020 have been
estimated at the prevailing rates applicable in each
jurisdiction.
7. Earnings per share
The calculation of the Basic earnings per share (EPS) is based
on the loss attributable to equity holders of the parent for the
period of GBP2,142,000 divided by the weighted average number of
ordinary shares in issue of 21,389,239,785. No EPS comparative is
provided as the share capital of Supply@Me S.r.l. is not made up of
distributable shares.
8. Intangible assets
Acquisition of Software Legal project Website and
company branch development R&D development marketing Total
Cost
At 1 January 2020 378 194 162 90 27 851
Additions 52 3 - 369 34 458
At 30 June 2020 430 197 162 459 61 1,309
------------------- ------------------- ---- ------------------- ------------------- ------
Amortisation
At 1 January 2020 94 4 14 5 2 119
Charge for the year 45 20 17 48 6 136
At 30 June 2020 139 24 31 53 8 255
------------------- ------------------- ---- ------------------- ------------------- ------
Net book value
At 30 June 2020 291 173 131 406 53 1,054
=================== =================== ==== =================== =================== ======
At 30 June 2019 314 - - - 7 321
=================== =================== ==== =================== =================== ======
9. Share capital
Allotted, called up and fully paid shares
30 June 2020 30 June 2019
No. GBP '000 No. GBP '000
Ordinary shares
of GBP0.00002
each 32,754,944,590 655 - -
Deferred shares
of GBP0.04
each 63,084,290 2,523 - -
2018 deferred
shares of
GBP0.009998
each 224,193,710 2,241 - -
Capital of
Supply@Me S.r.l. - - - 142
Total 33,042,222,590 5,420 - 142
New shares allotted
On 23 March 2020, the Group completed a reverse acquisition
transaction with Supply@Me S.r.l. It was considered that Supply@Me
S.r.l. was the accounting acquirer in the transaction and so the
comparative share capital is that of Supply@Me S.r.l. Upon
completion of the transaction, the share capital of Supply@Me
Capital plc has been disclosed, to represent that of the legal
acquirer. 32,322,246,220 ordinary shares were issued as
consideration.
Also, on 23 March 2020, 331,604,094 ordinary shares were issued
through a placing which raised gross proceeds of GBP2,240,000.
10. Reserves
Analysis of the movement in reserves is disclosed in the
Statement of Changes in Equity on page 7.
11. Related party transactions
With reference to the RTO as detailed in the prospectus, the
following are treated as related parties:
The AvantGarde Group SpA
The AvantGarde Group currently holds 38.9 per cent of the shares
in Supply@Me Capital plc as announced on 24 December 2020.
Previous to the date of the RTO:
-- The AvantGarde Group SpA had provided a loan to Supply@Me
S.r.l. of GBP325,875. As at 30 June 2020 the amount due to The
AvantGarde Group SpA was GBP325,875 (2019 - GBPnil); and
-- The AvantGarde Group SpA had paid various costs on behalf of
Supply@Me S.r.l. As at 30 June 2020 the amount due to The
AvantGarde Group was GBP105,925 (2019 - GBP225,789).
At RTO, the shareholders of The AvantGarde Group SpA were as
follows:
-- iWEP Ltd, iWolf Ltd and White Amba LLP
iWEP controlled more than 20 per cent. of the share capital of
The AvantGarde Group and is wholly owned by iWolf and White Amba.
The beneficial owner of iWEP, iWolf and White Amba is Dominic
White.
-- Orchestra Group, AZ Company Srl and AvantGarde 4.0 Srl
Orchestra Group SpA controlled more than 20 per cent. of the
share capital of The AvantGarde Group SpA and is controlled by AZ
Company Srl and AvantGarde 4.0 Srl.
-- Finance Partners Group SpA
Finance Partners Group SpA owned 17.66 per cent of The
AvantGarde Group SpA.
On 24 December 2020 a reorganisation of shareholdings was
announced, resulting in Alessandro Zamboni becoming the sole
Beneficial Owner of The AvantGarde Group
Eight Capital Partners Plc
Eight Capital Partners Plc is a current small shareholder
(0.1per cent.) in the Company, holds a 28.6 per cent interest in
Finance Partners Group SpA and additionally has Dominic White on
its Board.
Epsion Capital Ltd
Epsion Capital, is a wholly owned subsidiary of Eight Capital
Partners Plc and conducted the placing for the RTO.
Dominic White
Dominic White holds directorships across companies that are
related parties (iWEP Ltd and its parent companies iWolf Ltd and
White Amba Investments LLP, and, Eight Capital Partners Plc).
Alessandro Zamboni
Alessandro Zamboni is the sole Director of The AvantGarde Group
SpA as well as holding numerous directorships across companies that
are related parties.
12. Dividends
During the 6 month period to 30 June 2020 the Company did not
pay a dividend (no dividend : 2019).
The Directors do not foresee a dividend being payable in the
next financial year as the Group will be concentrating on growing
its market share and enhancing its technology and capabilities.
13. Going Concern
These interim financial statements have been prepared on a going
concern basis following an assessment by the Directors.
The Directors have reviewed the forecast cashflows for the next
12 months and consider the Group to be a going concern.
The cashflow forecasts are based on the enlarged group following
the reverse acquisition in March 2020 and therefore relate to
cashflows arising from the group's Fin Tech platform that focusses
on inventory monetisation facilities. The Directors have prepared
the forecast using their best estimates however the company is in
its start-up phase.
On the basis of the above, the directors have a material
uncertainty in relation to its going concern status as noted in the
recently filed financial statements for the period ended 31
December 2019. The Directors have prepared scenario-based models
which include adjustments for the uncertainties noted and
additional cost saving measures that could be implemented if there
is a delay in the revenue generation. On the basis of these
scenarios and that they are in advanced negotiations with potential
investors and there has been significant interest in the product
the Directors consider it appropriate to prepare the financial
statements on a going concern basis. These interim financial
statements do not include any adjustments that may be required if
the going concern status was not considered appropriate.
The Board has also monitored closely the impact of COVID on
business operations.
Impact on Client companies
SYME's Client company customer base remains strong and that the
demand for inventory monetisation continues to grow. The number of
Client companies being originated by SYME has grown each quarter
since the Reverse Take Over in March 2020. Increasingly, following
COVID-19, many businesses are consciously choosing to build
inventory to avoid supply chain shortages and subsequent loss of
trade, rather than keep stock levels low. This is positive
development for SYME's business model as it expects that Client
companies globally will look to monetise these higher volumes of
stock held.
Impact on Inventory funders
The impact of COVID-19 on Inventory funders, that is the
investors in the securitisation notes backed by the inventory
portfolios, has been more difficult to interpret. Interest rates
are at historic lows which means that investors are getting lower
returns on capital compared to previous years when higher interest
rates were the norm. SYME's new inventory asset class will offer a
strong relative margin compared to interest rates on a risk
adjusted basis. However, investors are undoubtedly more cautious
and taking longer to make decisions. Time to close transactions,
not only in Inventory funding, but across the investment spectrum,
has increased.
The three to four month delay that SYME announced in July to its
initial end September forecast to complete the first Inventory
Monetisation has been the result. We are positive about the
performance of the Company in the coming months as the first
securitisation transaction closes, and the recently announced
Captive Bank and the Shariah investment structures launch. The
re-opening of the global economies as the uncertainty caused by
COVID-19 dissipates will undoubtedly also help.
14. Principal Risks and Uncertainties
Brexit impacts
During the period, following the British government's decision
to invoke Article 50 on 29 March 2017 (and consequent changes to
the exit date), the UK left the European Union on 31 January
2020.
At this stage, the nature of the future relationship between the
UK and the remaining European Union countries following Brexit has
yet to be agreed and negotiations with the European Union on the
terms of Brexit have demonstrated the difficulties that exist in
reaching such an agreement. Depending on the terms of the
negotiations, the UK could also lose access to the single European
Union market and to the global trade deals negotiated by the
European Union on behalf of its members. Such a decline in trade
could affect the attractiveness of the UK as a global investment
centre and, as a result, could have a detrimental impact on
economic growth in the country. Furthermore, regardless of the form
of any withdrawal agreement, there are likely to be changes in the
legal rights and obligations of commercial parties across all
industries following Brexit, and British regulatory requirements
once outside the European Union could be subject to significant
change.
Although the Group will not operate exclusively in Britain and,
accordingly, the Group's success could be offset by general
economic developments in other geographies, negative developments
in, or the general weakness of, the British economy may negatively
affect the financial conditions of the Group.
Covid-19 pandemic
Following the onset of the COVID-19 pandemic, the Group
implemented a number of business continuity measures. In
particular, following the UK Government announcement on 24 March
2020 that the public should not leave homes to travel to work if
they could work at home, office attendance was limited to short
visits by essential IT colleagues and other key workers necessary
to maintain the continuity of operations and systems. All other
staff support the business through remote home working. These
measures have continued uninterrupted and are still in place.
The pandemic has created many uncertainties and we have adapted
the business rapidly to reflect the sudden change in its risk
profile. This has resulted in changes to our operational risk
profile. However, in other respects the key risks and uncertainties
associated with our strategic objectives remain broadly the same.
An overview of those risks, along with the associated risk
management and controls, follows:
- Increased operational risk
The remote working of staff and the inaccessibility of the
Group's normal offices in Italy and London presents heightened
operational risks. The extent of use of remote IT access has
increased threat of external fraud and cyber-attack. Our critical
business services have been reviewed and, in some instances, it has
been necessary to amend the usual routines and procedures.
- Early-stage business
Although the Company has progressed its client company
onboarding and funding activities significantly, Supply@ME is still
at an "early stage". The generation of revenues is difficult to
predict and there is no guarantee that the Group will generate
significant revenues in the foreseeable future. There are a number
of operational, strategic and financial risks associated with
early-stage companies. Supply@ME faces risks frequently encountered
by smaller, growing companies seeking to bring new products and
services to the market. There can be no assurance that the
prospective agreements being discussed with potential funders will
complete at the expected level or at all, which would materially
and adversely affect Supply@ME's ability to provide its inventory
monetisation service, or even if such funding were to be
forthcoming, there can be no assurance that sufficient numbers of
corporate customers would use the service to assure Supply@ME's
growth or viability in the future.
If the Group is unable to maintain or increase originations
through its Platform or if existing customers or funders do not
continue to participate on its Platform, its business, results of
operations, financial condition or prospects will be adversely
affected.
To grow its business, the Group must increase originations
through its Platform by attracting and retaining new and existing
trading and manufacturing companies who meet its working capital
needs in the different territories where the Group intends to
operate, as well as new and existing funders interested in
investing through Supply@ME's multiple funding routes including
securitisation notes and Shariah compliant products.
The Group's operations are reliant on sufficient investor
funding. The Group's ability to attract funders to its Platform and
secure sufficient funding from investors depends on, among other
things, its ability to provide attractive investor returns,
corresponding appropriate liquidity, and compliance with the terms
and conditions of funding agreements with investors.
Any of these events could have a material adverse effect on the
Group's business, results of operations, financial condition, or
prospects.
The Group's success and future growth depend significantly on
its successful marketing efforts, increasing its brand awareness,
and its ability to attract new funders and customers.
Supply@ME's current business model involves the substantial
majority of its funders and customers being acquired via direct and
indirect channels. The Group's success and future growth therefore
depend significantly on its marketing and sales efforts and its
ability to attract new customers to the Platform. The Group intends
to dedicate significant resources to its marketing efforts,
particularly as it continues to grow and expand into new
territories. The Group's ability to attract funders and customers
(trading and manufacturing companies) depends in large part on the
success of these marketing efforts and the success of the marketing
channels the Group uses to promote its Platform.
The supply chain financing market is competitive and
evolving.
Although Supply@ME provides an alternative platform focused on
inventory monetisation (the innovation is that, for customers the
transaction is not, strictly speaking, a financing transaction),
the Group competes with lenders and lending platforms, as well as
financial products, that attract borrowers, investors, or both.
With respect to borrowers, the Group primarily competes with
traditional financial institutions, such as banks, asset-based
lenders, online platforms and captive networks. With respect to
investors, the Group primarily competes with other investment
vehicles and asset classes offered by a large number of financial
and other institutions.
15. Contacts
Dominic White, Non-Executive, Chairman
investors@supplymecapital.com
Alessandro Zamboni, CEO investors@supplymecapital.com
Paul Vann, Walbrook PR Limited +44 (0)20 7933 8780
supplyme@walbrookpr.com
Brian Norris, Cicero/AMO +44 (0)20 7947 5317
16. Cautionary Statement
These Interim Results have been prepared in accordance with the
requirements of English Company Law and the liabilities of the
Directors in connection with these Interim Results shall be subject
to the limitations and restrictions provided by such law.
These Interim Results are prepared for and addressed only to the
Company's shareholders as a whole and to no other person. The
Company, its Directors, employees, agents, or advisers do not
accept or assume responsibility to any other person to whom these
Interim Results are shown or into whose hands it may come, and any
such responsibility or liability is expressly disclaimed.
These Interim Results contain forward looking statements, which
are unavoidably subject to risk and uncertainty because they relate
to events and depend upon circumstances that will occur in the
future. It is believed that the expectations set out in these
forward-looking statements are reasonable, but they may be affected
by a wide range of variables which could cause future outcomes to
differ from those foreseen. All statements in these Interim Results
are based upon information known to the Company at the date of this
report. Except as required by law, the Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
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END
IR DDGDBBUDDGBI
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