Final Results, Annual Report and Notice of AGM

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.

23 April 2025

Finseta plc

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

Final Results

Notice of AGM and Publication of Annual Report

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 final results for the year ended 31 December 2024. In addition, the Group gives notices of its annual general meeting ("AGM") and the publication of its annual report and accounts.

Financial Highlights

· Underlying1 revenue grew by 26% to £11.3m (2023: £8.9m) and reported revenue increased by 19% to £11.4m (2023: £9.6m)

· Gross margin improved to 65.7% (2023: 63.4%)

· Adjusted2 EBITDA of £2.0m (2023: £1.7m), an increase of 18%

· Profit before tax of £1.4m (2023: £1.3m)

· Cash generated from operations of £2.2m (2023: £2.0m)

· Cash and cash equivalents at 31 December 2024 were £2.6m (31 December 2023: £2.3m); net cash increased to £0.6m (31 December 2023: £0.2m)

Operational Highlights

· Growth in active customers3 to 1,059 (2023: 906); and completed strategic transition to wholly direct sales

· 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 150 currencies

· Received regulatory approval to provide payments services in Canada and, post year end, the United Arab Emirates ("UAE")

· Signed agreement with Mastercard and, post year end, launched corporate card scheme

· Implemented multiple platform enhancements, including introduction of mass payments feature

Current Trading and Outlook

· The Group has made a strong start to trading in the current financial year, driven by continued growth in active customers

· As 2025 progresses, the Group's new product offerings - in particular, the corporate card scheme and mass payments - as well as the Group's operations in Dubai and Canada, are expected to make an increasing contribution to revenue

· As a result, the Group is on track to report significant revenue growth for 2025, in line with the Board's expectations

· In the medium term, the Group's key strategic initiatives are set to substantially accelerate sales growth and increase profitability

James Hickman, CEO of Finseta, said: "2024 has been a landmark year for the business. We have continued to deliver strong growth while successfully executing on our strategy. We expanded our product offering - most notably with the launch of the Finseta Corporate Card and mass payments feature - and our geographical footprint with the receipt of regulatory approval to provide payments services in Canada and, post year end, the United Arab Emirates. These new initiatives have already commenced generating revenue, which we expect to ramp in the second half of 2025 and beyond. We have made a strong start to the new financial year, with continued growth in the number of active customers, and with the foundations of our business having been further enhanced, the Board remains confident in our ability to deliver sustained value for our shareholders. We look forward to reporting on our progress."

Enquiries 

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 150 currencies. With a track record of over 15 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; by the Financial Transactions and Reports Analysis Centre of Canada as a Money Services Business; and by the Dubai Financial Services Authority under a Category 3D licence. www.finseta.com  

Investor Presentation

James Hickman, CEO, and Judy Happe, CFO, will provide a live presentation via Investor Meet Company at 10.30am 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

Operational Review

This has been a milestone year for Finseta as the Group progressed several significant strategic initiatives while continuing to deliver strong growth. The Group has expanded its offering, its sales team and its introducer network, resulting in an increased number of active customers. This enabled the Group to achieve growth in all key financial metrics in 2024. At the same time, the agreement with Mastercard, establishing a presence in Canada and adopting 'Finseta' as the new company name have strengthened the business and its ability to deliver value.

Performance

The Group delivered another year of significant growth in revenue in 2024. Underlying1 revenue increased by 26% to £11.3m (2023: £8.9m) and reported revenue grew by 19% to £11.4m (2023: £9.6m). This growth was driven by an increase in active customers to 1,059 (2023: 906)3, reflecting the expansion of the sales team and introducer network and the Group's sustained focus on providing an exceptional level of service to its corporate and high net worth individual ("HNWI") clients.

The transition to only serving clients directly was completed, with all revenue being generated by direct clients during the year (2023: 95%). 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 was 59% (2023: 64%) with corporate accounts contributing 40% (2023: 34%). In respect of the majority of private client revenue, while 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 (2023: £220k) in revenue, accounting for 1% of total revenue (2023: 2%), as the final income generated under a licencing agreement with the acquirers of Avila House, a former subsidiary.

Strategic execution

Finseta's growth strategy continues to be founded on the three pillars of product, geography and people - and the Group made considerable progress on all three in 2024. This contributed to its growth during the year, but also strengthens the drivers of growth for the years to come.

Product

A core element of the Group'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 year.

Currencies & countries

The Group continued to expand its global payments network by establishing new counterparty partnerships. This enabled 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 150 currencies compared with over 150 countries and 58 currencies this time last year.

Payment method

The Group made significant progress during the year towards expanding its payment method offering with the signing of a long-term agreement with Mastercard to launch a corporate card scheme. The Finseta Corporate Card, which was launched post year end, is available to businesses as virtual or physical cards, has multi-currency capability and can be used in over 210 countries. This new offering will provide the Group with an additional, high-margin, repeatable revenue stream from business customers and will expand its addressable target market. The Group has commenced generating initial revenues from the corporate card scheme from existing customers, which it expects to ramp in the second half of 2025.

The introduction of a corporate card scheme is a key element of the Group's strategy to diversify its product offering. As a customer-first business, Finseta aims to remove all barriers to expenditure - enabling customers to make payments wherever, whenever and however they want. This additional offering enhances the service that the Group can provide to its existing customers and expands its target market to corporates where the primary requirement is a corporate card scheme.

Service

Finseta continued to undertake development work to enhance the functionality of its platform, which will further improve clients' experience. This included improving the customer onboarding process, which has decreased onboarding times. The Group implemented real-time transaction monitoring utilising artificial intelligence to allow it to scale and create efficiencies, which is particularly relevant for card payments where the number of transactions are much higher and more instantaneous than in the regular payments business. In the second half of the year, the Group introduced a mass payments feature, which enables clients to make up to 1,000 multi-currency, multi-market payments in a single transaction. This feature has been well received - making an initial contribution to 2024 revenue - with the number of clients using it continuing to increase.

A key differentiator of the Group's offer at Finseta is the high level of personalised service provided to clients, along with the experience of the team and the strength of the Group's 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 which require a higher level of service, made good progress during the year. The Group has added further counterparty capability to this new offering and has also added further resource as the number of customers and partners has continued to grow.

Geography

A core pillar of the Group's strategy is geography - that is, expanding the Group's 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 Finseta's own geographical footprint and regulatory capabilities.

A significant milestone was achieved when Finseta was awarded a Money Services Business ("MSB") licence from the Financial Transactions and Reports Analysis Centre of Canada, which enables it to operate a payments company in Canada and provide payments services to Canadian businesses and individuals. With the Group having previously received enquiries in Canada for its services through its existing network, the establishment of a regulated business will allow Finseta to fully pursue such opportunities while leveraging local payment rails to benefit from faster, more efficient transaction processing and lowering transaction costs. Following the receipt of the MSB licence, the Group commenced the process of establishing a full-service office, which was launched post year end, to provide clients in Canada with the high-touch service-led approach that is core to the Finseta offering.

During the year, the Group continued to progress through the approval process with the Dubai Financial Services Authority and was granted, post year end, a Category 3D licence that authorises Finseta to provide payment services within the UAE. This will enable the Group to significantly expand its existing activities in the UAE by now being able to service corporate and professional clients as well as to benefit from local payment rails. Dubai is one of the world's top financial centres and represents a significant opportunity for Finseta. The Group's introducer-led go-to-market approach is also particularly well-suited to this business environment with international professional services and advisory firms having a substantial presence. The potential of this market is significant and we are investing in our UAE business to take advantage of this growth opportunity.

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 the Group's resources.

People

As a high-touch, service-led business, the strength of Finseta's people is crucial. The Group continued to invest in its workforce with a fundamental contribution to its growth during the year being the enhancement of the sales team. The Group also expanded the Finseta Solutions team and appointed a Country Manager for Canada. Finseta understands that the strength of its business is also the strength of its people and, as such, remains committed to continuing to foster excellence in its workforce as it looks to continue to expand its headcount through 2025.

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

Financial Review

2024 was another year of strong trading performance for Finseta, with growth achieved across all key financial metrics.

Revenue for the 12 months to 31 December 2024 grew by 19% to £11.4m (2023: £9.6m). On an underlying basis1, revenue for FY 2024 increased by 26% to £11.3m compared with £8.9m for the previous year. This growth was primarily a result of an increase in active customers, reflecting the expansion of the Group's sales team and introducer network.

Gross margin improved to 65.7% (2023: 63.4%), which primarily reflects the strategic decision to offboard the historic white label business in prior years. The improvement in gross margin combined with the increased revenue resulted in a 21% increase in gross profit to £7.5m (2023: £6.2m).

Operating expenses were £6.3m in 2024 compared with £5.1m for the previous year. This primarily relates to additional sales team hires as the business invests for future growth, increased performance-related bonuses commensurate with the Group's performance and higher depreciation as a result of the Group's move to a new leased corporate premises in the second half of 2023. There was also an increase in marketing expenses to support the Group's rebrand to 'Finseta'; travel expenses in support of the Group's strategic geographic expansion; and licensing costs to support further enhancements to the Group's onboarding and transaction monitoring capabilities.

The Group recognised other operating income of £0.3m (2023: £0.4m). This comprised £0.2m (2023: £0.4m) of interest based on client cash balances (see note 3 to the financial statements) and £0.1m (2023: £nil) from the reversal of a provision for the final earn-out payment related to the acquisition of Capital Currencies.

Thanks to the strong operating performance, there was an increase in adjusted EBITDA to £2.0m (2023: £1.7m) and in profit from operations to £1.7m (2023: £1.4m). Adjusted EBITDA is stated after the add-back of other operating income, share-based compensation, profit from the disposal of a subsidiary, transaction costs and non-cash based accounting adjustments in respect of the Group's corporate premises (see the statement of comprehensive income for further detail).

Profit before tax was £1.4m in 2024 compared with £1.3m for 2023. Tax expense for the year was £395k compared with a tax credit of £843k in the prior year which primarily arose due to the recognition of an £818k deferred tax asset in 2023 relating to tax losses following the Group's transition to profitability. As a result, net profit was £1.1m (2023: £2.1m).

Basic earnings per share were 1.74 pence (2023: 3.77 pence). On a fully diluted basis, earnings per share were 1.66 pence (2023: 3.76 pence). This reflects an increase in the weighted average number of ordinary shares (due to an issuance of shares during 2023) and in outstanding share options combined with the lower net profit as described above.

Cash generated from operations was £2.2m (2023: £2.0m) based on the strong trading performance. Cash used in investment activities was £1.3m (2023: £0.2m), which primarily consists of the continued investment in developing the Group's proprietary platform, including development of supporting infrastructure for the corporate card scheme. Cash used in financing activities was £0.6m compared with £0.1m in 2023, reflecting lease payments associated with the move to the new corporate premises as well as the settlement of loan notes and deferred consideration.

As at 31 December 2024, cash and cash equivalents were £2.6m (31 December 2023: £2.3m), with net cash of £0.6m4 (31 December 2023: £0.2m).

Outlook

The Group has made a strong start to trading in the new financial year, driven by continued growth in active customers. As Finseta progresses through 2025, the new product offerings - in particular, the corporate card scheme and mass payments - as well as the Group's operations in Dubai and Canada, are expected to make an increasing contribution to revenue. As a result, the Group is on track to report significant revenue growth for 2025, in line with the Board's expectations.

Looking further ahead, the Group's key strategic initiatives are set to substantially accelerate sales growth and increase profitability in the medium term. While the priority is to scale up these operations, the Group is also continuing to pursue its strategy to further expand its regulatory capabilities and enhance the service offering. With the strong foundations that have already been established, the Board is confident that these actions will deliver sustainable growth and generate value for shareholders.

Notice of AGM and Publication of Annual Report

The Company gives notice that its AGM will be held at 11.00am BST on 12 June 2025 at the office of Gracechurch Group, 48 Gracechurch Street, London, EC3V OEJ.

The Notice of AGM, along with the Company's annual report and accounts for the year ended 31 December 2024 (together, the "Documents"), have been published on the Company's website at: https://investors.finseta.com/document-centre/. The Documents, along with a form of proxy, will be posted to those shareholders who have elected to receive physical copies over the coming week.

Notes

1 Defined as total revenue excluding revenue generated by the Group's historic white label business in 2023 and licencing revenue under an exceptional agreement in 2023 and 2024

2 Adjusted to exclude 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 Financial Review for further detail)

3 Defined as customers who traded through Finseta during the 12-month periods to 31 December 2024 and 31 December 2023 respectively

4 Defined as cash and cash equivalents less loan notes

Group Statement of Comprehensive Income

For the year ended 31 December 2024

All amounts are derived from continuing operations.

The notes to the financial statements form an integral part of these financial statements.

Group and Company Statement of Financial Position

As at 31 December 2024

A separate profit and loss account for the parent Company is omitted from the Group's financial statements by virtue of section 408 of the Companies Act 2006. The Company loss for the year ended 31 December 2024 was £2,901,760 (year ended 31 December 2023: loss of £1,085,030). The financial statements were approved by the Board of Directors and authorised for issue on 22 April 2025 and are signed on its behalf by:

James Hickman

Chief Executive Officer

The notes to the financial statements form an integral part of these financial statements.

Group Statement of Changes in Equity

For the year ended 31 December 2024

The notes to the financial statements form an integral part of these financial statements.

Company Statement of Changes in Equity

For the year ended 31 December 2024

The notes to the financial statements form an integral part of these financial statements.

Group and Company Cash Flow Statement

For the year ended 31 December 2024

The notes to the financial statements form an integral part of these financial statements.

Notes to the Financial Statements

For the year ended 31 December 2024

BAsis of preparation

Finseta is a public limited company, incorporated and domiciled in England. The Company was admitted to 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. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the "Group"). The main activities of the Group are set out in the Strategic Report of the Group's annual report and accounts for the year ended 31 December 2024 (the "2024 Annual Report").

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the United Kingdom ("IFRS") for the years ended 31 December 2023 and 31 December 2024, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared in sterling, which is the Group's presentation currency and the functional currency of each Group entity. They have been prepared using the historical cost convention except for the measurement of certain financial instruments.

The parent Company accounts have also been prepared in accordance with IFRS (as adopted by the United Kingdom) and using the historical cost convention. The accounting policies set out below have been applied consistently to the parent Company where applicable.

Monetary amounts in these financial statements are rounded to the nearest pound.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. These estimates and assumptions are based upon management's knowledge and experience of the amounts, events or actions. Actual results may differ from such estimates.

The critical accounting estimates are considered to relate to the following:

Fair values of assets acquired in business combinations: The Group recognises the fair value of customer relationships acquired through business combinations reflecting discounted future cash flows from the acquired customers and incorporating an estimated rate of attrition of the customer base.

Deferred consideration: Total compensation for acquisitions includes an element of deferred consideration payable, subject to the revenue performance post-acquisition. Management use historical information and management forecasts to estimate a liability, using the discounted cashflow methodology, to derive a fair value of the deferred consideration payable.

Intangible assets: The Group recognises intangible assets in respect of software development costs as well as development costs related to its new debit card product offering. This recognition requires the use of estimates, judgements and assumptions in determining whether the carrying value of such assets is impaired at each year end.

Investments in subsidiary undertakings (Company financial statements only): The Company's statement of financial position includes investments stated at cost in its subsidiary undertakings. The continuing recognition at cost requires judgements and estimates including an assessment of whether the carrying value of such investments is impaired at each year end.

NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS ADOPTED FROM 1 JANUARY 2024

The following amendments are effective for the period beginning 1 January 2024:

· Amendments to IAS 1 - Classification of Liabilities as Current or Non-current; and

· Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements.

The amendments had no impact on the Company's financial statements.

NEW AND REVISED IFRS STANDARDS IN ISSUE BUT NOT YET EFFECTIVE

At the date of authorisation of these financial statements, the Company has not applied the following new and revised IFRS Standards that have been issued but are not yet effective:

· Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates; and

· IFRS 18 Presentation and Disclosure in Financial Statements.

Basis of consolidation

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.

All subsidiary undertakings have an accounting reference date ended 31 December.

BUSINESS COMBINATIONS

The Group financial statements recognise business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

GOING CONCERN

At 31 December 2024, the Group balance sheet showed a cash balance of £2,580,609 (31 December 2023: £2,343,417). The Group balance sheet also showed a liability of £2,000,000 (31 December 2023: £2,172,578) related to a loan note held by Robert O'Brien, the Company's largest shareholder, that is due for repayment on 31 July 2026.

The Directors have prepared cash flow forecasts covering a medium term time horizon through to 31 December 2027, due to the significant loan note balance that is due for repayment beyond the usual 12-month review period. The Directors have derived forecast assumptions that are their best estimate of the future development of the Group's business taking into account projected increase in revenues, operationalisation of the new overseas regulated entities, the commercial launch of the card programme, as well as the continued investment in the development of the software platform, organic sales, marketing efforts and the repayment of the £2,000,000 loan note payable on 31 July 2026 to Robert O'Brien, the Company's largest shareholder.

The Directors have prepared various scenario planning forecasts alongside their best-estimate forecast assumptions, including a scenario in which sales growth falls below management expectations, which all indicate sufficient cash resources to continue to finance the Group's working capital requirements over the forecast period.

For these reasons, the Directors continue to adopt the going concern basis of accounting in preparing the Group's financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

revenue

The Group applies IFRS 15 Revenue from Contracts with Customers for the recognition of revenue. IFRS 15 established a comprehensive framework for determining whether, how much and when revenue is recognised. It affects the timing and recognition of revenue items, but not generally the overall amount recognised.

The performance obligations of the Group's revenue streams are satisfied on the transaction date or by the provision of the service for the period described in the contract. Revenue is not recognised where there is evidence to suggest that customers do not have the ability or intention to pay. The Group does not have any contracts with customers where the performance obligations have not been fully satisfied.

The Group derives revenue from the provision of foreign exchange and payment services. When a contract with a client is entered into, it immediately enters into a separate matched contract with its institutional counterparty.

Spot and forward revenue is recognised when a binding contract is entered into by a client and the rate is fixed and determined. Revenue represents the difference between the rate offered to clients and the rate received from its institutional counterparties.

INVESTMENTS

Investments in subsidiary undertakings are accounted for at cost less impairment.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised on the Group statement of financial position when the Group has become a party to the contractual provisions of the instrument.

Derivative financial instruments

Derivative financial assets and liabilities are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Changes in the fair value of derivatives are included in the income statement. The Group's derivative financial assets and liabilities at fair value through profit or loss comprise solely of forward foreign exchange contracts.

Trade, loan and other receivables

Trade and loan receivables are initially measured at their transaction price. Trade and loan receivables are held to collect the contractual cash flows which are solely payments of principal and interest. Therefore, these receivables are subsequently measured at amortised cost using the effective interest rate method. The Directors have considered the impact of discounting trade and loan receivables whose settlement may be deferred for lengthy periods and concluded that the impact would not be material.

An impairment loss is recognised for the expected credit losses on trade and loan receivables when there is an increased probability that the counterparty will be unable to settle an instrument's contractual cash flows on the contractual due dates, a reduction in the amounts expected to be recovered, or both.

Impairment losses and any subsequent reversals of impairment losses are adjusted against the carrying amount of the receivable and are recognised in profit or loss.

Trade payables

Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into. An instrument will be classified as a financial liability when there is a contractual obligation to deliver cash or another financial asset to another enterprise.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdraft that is integral to the Group's cash management.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill on acquisition of subsidiaries is separately disclosed in note 9.

Goodwill is not amortised; it is recognised as an asset, allocated to cash generating units for the purpose of impairment testing and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.

other INTANGIBLE aSSETS

An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.

Amortisation is charged on a straight-line basis through the profit or loss within administrative expenses. The rates applicable, which represent the Directors' best estimate of the useful economic life, are as follows:

Customer relationships - 5 years

Internally developed software - 3 years

Cards - 3 years 

Software costs - 3 years

Other intangible assets - 3 years

Trademarks are recognised as intangible assets and are expected to generate future economic benefits in perpetuity. Trademarks are not amortised. They are allocated to a cash generating unit and tested for impairment annually.

property, plant and equipment

All property, plant and equipment is initially recorded at cost and is subsequently measured at cost less accumulated depreciation and any recognised impairment loss.

Depreciation, which is charged through the profit or loss within administrative expenses, is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows:

Computer equipment - 25% straight line

Leasehold improvements - in line with the term of the underlying leased asset

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

LEASES

The Group as lessee

The Group assesses whether a contract is, or contains, a lease at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (determined to be those with an initial discounted total obligation of less than £5,000). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If that rate cannot be readily determined, the Group uses its incremental borrowing rate.

The incremental borrowing rate depends on the term, currency and start date of the lease and is determined based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; a credit risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile of the entity that enters into the lease is different to that of the Group and the lease does not benefit from a guarantee from the Group.

Lease payments included in the measurement of the lease liability comprise:

· Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable

· Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date

· The amount expected to be payable by the lessee under residual value guarantees

· The exercise price of purchase options, if the lessee is reasonably certain to exercise the options

· Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease

The lease liability is presented as a separate line in the consolidated statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

· The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate

· The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used)

· A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated balance sheet.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the "Impairment of property, plant and equipment and intangible assets excluding goodwill" policy.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line "Administrative expenses" in profit or loss.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. For contracts that contain a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

Rent free concessions granted during the COVID-19 pandemic have been credited to the income statement in the year they were granted, with a resulting reduction in the lease obligation.

The Group as lessor

The Group enters into lease agreements as a lessor for some of its property included within its right-of-use assets.

Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group's net investment in the leases. Finance lease income is allocated to accounting periods to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

Subsequent to initial recognition, the Group regularly reviews the estimated unguaranteed residual value and applies the impairment requirements of IFRS 9, recognising an allowance for expected credit losses on the lease receivables.

Finance lease income is calculated with reference to the gross carrying amount of the lease receivables, except for credit-impaired financial assets for which interest income is calculated with reference to their amortised cost (i.e. after a deduction of the loss allowance).

When a contract includes both lease and non-lease components, the Group applies IFRS 15 to allocate the consideration under the contract to each component.

PROVISIONS

Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated.

SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

SHARE-BASED COMPENSATION

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted.

As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period. Where equity instruments are granted to persons other than employees, the income statement is charged with fair value of goods and services received.

Cancelled or settled options are accounted for as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

The proceeds received net of any attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

Fair value is measured by use of the Black-Scholes pricing model which is considered by management to be the most appropriate method of valuation.

employee benefits

The Group operates a defined contribution pension scheme. The pension costs charged in the financial statements represent the contribution payable by the Group during the year.

The costs of short-term employee benefits are recognised as a liability and an expense in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

TAXATION

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Current income tax relating to items recognised directly in equity or other comprehensive income is recognised in equity and not in the consolidated statement of comprehensive income.

Deferred income tax is provided on all temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Deferred tax assets have been recognised in respect of the Group's tax losses carried forward.

Research and Development tax credits are recognised as receivables when they have been submitted to HMRC. The amount recognised is based on the expected value of the credit.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting judgements will, by definition, seldom equal the related actual results. The estimates and assumptions that 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.

IMPAIRMENT

At each accounting reference date, the Group reviews the carrying amounts of its intangibles, property, plant & equipment and investments to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

DEFERRED CONSIDERATION

Total compensation for acquisitions includes an element of deferred consideration payable, subject to the revenue performance post-acquisition. Management use historical information and management forecasts to estimate a liability, using the discounted cashflow methodology, to derive a fair value of the deferred consideration payable.

SHARE-BASED COMPENSATION

The fair value of share-based awards is measured using the Black-Scholes model which inherently makes use of significant estimates and assumptions concerning the future applied by the Directors. Such estimates and judgements include the expected life of the options and the number of employees that will achieve the vesting conditions. Further details of the share option scheme are given in note 19.

ALTERNATIVE PERFORMANCE MEASURES

The Group uses the alternative performance measure of adjusted EBITDA. This measure is not defined under IFRS, nor is it a measure of financial performance under IFRS.

This measure is sometimes used by investors to evaluate a company's operational performance with a long-term view towards adding shareholder value. This measure should not be considered an alternative, but instead supplementary, to profit/(loss) from operations and any other measure of performance derived in accordance with IFRS.

Alternative performance measures do not have generally accepted principles for governing calculations and may vary from company to company. As such, the adjusted EBITDA quoted within the Group statement of comprehensive income should not be used as a basis for comparison of the Group's performance with other companies.

ADJUSTED EBITDA

The Group uses adjusted EBITDA, defined as profit/(loss) from operations, adding back share-based compensation, transaction costs associated with the Group's acquisitions, impairment, depreciation & amortisation charges, profit on the disposal of Capital Currencies Limited, operating income related to interest on client balances, deferred consideration income and IFRS 16 accounting transactions. 

1 revenue and SEGMENTAL REPORTING

All of the Group's revenue arises from its activities within the UK (although a proportion of revenue is derived from customers incorporated or residing outside of the UK). Management considers there to be only one operating segment within the business based on the way the business is organised and the way results are reported internally.

Revenue is as follows:

2 PROFIT/(LOSS) FROM OPERATIONS

Amounts payable to the Group's auditor in respect of both audit and non-audit services:

3 OTHER OPERATING INCOME

Interest receivable from client cash balances relates to interest earned on client funds held in approved safeguarding accounts which are interest bearing. Under the terms of the Group's Electronic Money Licence, the Group is not able to pass any of the interest earned back to its clients.

Whilst the interest stream is a positive inflow for the Group, 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', and not revenue on the face of the statement of comprehensive income. For the same reason, interest income has been excluded from the presentation of adjusted EBITDA.

Interest earned on the Group's own cash is recognised within 'finance and other income' in the consolidated statement of comprehensive income.

The Group has recognised other operating income of £139,640 in respect of the release of the deferred consideration liability related to the acquisition of Capital Currencies Limited due to the performance conditions attached to the final earn-out payment not being met.

4 INTEREST AND SIMILAR ITEMS

5 EMPLOYEES

During the year, no (2023: nil) Directors exercised any (2023: nil) share options.

6 Pension costs

The Group operates a defined contribution pension scheme. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the Group and amounted to £93,813 (2023: £71,408). At 31 December 2024 contributions of £32,641 remained outstanding and are included within other payables (2023: £20,130).

7 taxation

The tax on the profit on ordinary activities for the period was as follows:

FACTORS AFFECTING FUTURE CHARGES

As at 31 December 2024, the Group had tax losses carried forward of £1,588,998 (31 December 2023: £3,272,638) in respect of which it had recognised a deferred tax asset of £397,250 was carried forward (31 December 2023: £818,161). The total net deferred tax asset as at 31 December 2024 was £302,381 (31 December 2023: £697,864) (see note 12).

The tax rate applicable for the year ended 31 December 2024 was 25%.

8 earnings PER SHARE

9 GROUP INTANGIBLE ASSETS

The Group has recognised an intangible asset of £296,503 for costs incurred in the development of its new debit card product. No amortisation has been recognised as the product was still undergoing final testing and was not fully ready for use as at 31 December 2024.

For the year ended 31 December 2024, the Group recognised an impairment charge of £139,640 (2023: £nil) against the goodwill recognised on the acquisition of Capital Currencies business in light of the performance conditions attached to the final tranche of the earn-out in respect of Capital Currencies not being met.

Company INTANGIBLE ASSETS

11 GROUP property, plant and equipment

12 deferred tax

The Group recognised the following movements in deferred tax:

The Company recognised the following movements in deferred tax:

13 investments