TIDMSYME
RNS Number : 1126K
Supply @ME Capital PLC
31 August 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
31 August 2021
Supply@ME Capital plc
(The "Company" or "SYME")
Trading Update
Strong increase of inventory monetisation revenues expected
through an evolving multi-business line FinTech strategy
Supply@ME Capital plc, the innovative fintech platform which
provides the Inventory Monetisation(c) service to manufacturing and
trading companies, today announces the following trading
update.
Preliminary note
Following the acquisition of TradeFlow Capital Management Pte.
Ltd ("TradeFlow"), which completed on 6 July 2021, and the recent
launch of its Global Inventory Monetisation Fund (the "Fund", as
disclosed in the RNS of 9 August 2021), the Group (being the
Company and its operating subsidiaries) is now focused on
establishing and growing the following active, and future, revenue
streams:
1. Investment Advisory ("IA"): this is the revenue stream
currently being generated by TradeFlow in its capacity as
investment advisor to its well-established funds, as well as its
anticipated role as investment advisor to the Fund going
forward.
This stream is expected to generate revenues of approximately
1.25% of Assets Under Management for which TradeFlow acts as
advisor. Additionally, TradeFlow could receive a further 15%
performance incentive fee of the profits generated by the Funds,
based on performance.
2. "Captive" inventory monetisation platform servicing ("C.IM"):
this is revenue generated through the use of the Platform to
facilitate inventory monetisation ("IM") transactions performed by
the Fund and its Inventory Funders. Currently this revenue is being
generated by the Group's Supply@ME operating subsidiaries, and in
the future is expected to be supplemented by Tijara Pte Ltd, a
technology subsidiary company of TradeFlow. The revenue will be
earned in relation to the following tasks:
- origination and due diligence (pre-IM); and
- monitoring, controlling and reporting (post-IM).
This stream is expected to generate revenues of approximately
1-3% of the gross value of the inventories monetised (purchase
price plus VAT).
3. "White Label" inventory monetisation platform servicing
("WL.IM"): this is the revenue to be generated through the use of
the Platform by third parties who choose to follow the self-funding
model.
This stream is expected to generate software-as-a-service
revenues of approximately 0.5-1.5% of the value of each Inventory
Monetisation transaction (meant as funding provided).
Trading update for the six months ended 30 June 2021
The following table shows the preliminary and unaudited revenues
of both TradeFlow and SYME (including its subsidiaries) for the six
months ended 30 June 2021 and for the corresponding period in 2020.
It should be noted that TradeFlow only became part of SYME in July
this year so did not contribute to Group Turnover during these
six-month periods. The TradeFlow figures have therefore been shown
for information purposes only.
Preliminary and unaudited Originated Business Pipeline(2)
revenues for the 6-months for the 6-month
period respectively period ended
ended 30 June 30 June 2021(1)
2021 2020 Movement
Revenue streams GBP000 GBP000 %
--------- --------- --------- -------------------- -------------
250 transactions
and 40 active
TradeFlow - clients (exporters
IA Revenue (3) 272 212 28% plus importers) GBP 750m
--------- --------- --------- -------------------- -------------
Group - C.IM 271 - N/A 6 clients GBP 1.5bn
Revenue (4) 126 clients
--------- --------- --------- -------------------- -------------
WL.IM Revenue The Group is developing its integrated capabilities
in respect of White Label inventory monetisation
platform servicing. SYME operating subsidiaries
are in discussions with potential partners.
--------------------------------------------------------------------
(1) For the IA Revenue stream, the Originated Business includes
the number of active counterparts and transactions the funds traded
with & invested in during the period. For the C.IM Revenue
stream, the Originated Business includes the number of clients
monetised and/or the number of clients for which the Group has
carried out due diligence services whereby the fees received meet
the revenue recognition criteria as set out in IFRS 15 - Accounting
for Revenue from Contracts with Customers ("IFRS 15").
(2) Includes Client companies for which due diligence is
completed or underway and/or eligible prospects which show an
interest for the inventory monetisation services and with whom the
Group is working in the pre-analysis phase. The monetary value
represents the potential value of inventory to be monetised by
these Client companies. This number excludes any client companies
that have been lost due to either failing to meet eligibility
criteria or delays in obtaining securitisation funding. While some
of these lost client companies may be expected to be re-boarded
once the first inventory monetisation has been completed, they have
been excluded from the C.IM Pipeline figures above.
(3) TradeFlow - IA revenue has been translated into GBP from USD
or EUR as applicable using the average monthly exchange rates for
the relevant period in which the revenue was recognised.
(4) At 30 June 2021 the Group's C.IM Revenue includes due
diligence fees charged to Client companies by the Group's main
operating subsidiary which meet the revenue recognition criteria
set out in IFRS 15 as above. It should be noted that the revenue
for the 6-month period ended 30 June 2020 has been restated to meet
the requirements of IFRS 15. The Company expects to perform the
same trend observed for 2020: the first half of the year was
dedicated to manage the Client companies preliminary analysis.
Accordingly, the outcome of the latter are expected to generate
revenues in the second part of the year.
Geographical & sector analysis
The Originated Business emanates from the following geographic
and sector classifications:
-- TradeFlow - IA Revenue:
- The inventory in transit transactions predominantly took place
in Asia-Pacific ("APAC") and Africa during the six-month period
ended 30 June 2021.
- The sectors from which the IA revenues were generated during
the period were substantially Agriculture, Energy and
Chemicals.
-- Group - C.IM Revenue:
- All the Client companies for which SYME Group completed due
diligence activities were based in Europe (Italy).
- According to the Global Industry Classification Standards
(GICS) adopted by the Company, the key Portfolio core sectors
relevant to the due diligence activities carried out during the
period were Retailing, Capital Goods and Healthcare Providers &
Services.
The Pipeline emanates from the following expected geographic and
sector classifications:
-- TradeFlow - IA Revenue:
- Revenues are expected to be substantially generated in line
with the present geographical and sectoral model.
-- Group - C.IM Revenue:
- Revenues are expected to be substantially generated from the following sources:
- by client: Europe (Italy) 65%, UK 25%, MENA 9%, US 1%
- by potential Inventory Monetisation values: Europe (Italy) 62%, UK 25%, MENA 10%, US 3%
- According to the Global Industry Classification Standards
(GICS) adopted by the Company, the key Portfolio core sectors which
each account for in excess of 10% of the potential value of
inventory to be monetised are:
- Food, Beverage & Tobacco;
- Retailing;
- Capital Goods; and
- Materials.
Outlook[1]
The outlook statement for the current financial year ending 31
December 2021 takes into account the status of the initiatives
disclosed to the market via previous RNS announcements published by
the Company.
As result of internal analysis, the Board of Directors expects
to generate consolidated revenues for the year ending 31 December
2021 in the range of GBP3.8m - GBP4.9m. In developing this outlook
statement, the Board of Directors has considered the proposed fees
that will be charged by the Group for the year ending 31 December
2021 and only has only included those which are expected to meet
the criteria for revenue recognition in 2021 in line with IFRS 15.
As a result, the Board of Directors expects a further similar
amount in the range of GBP3.9m - GBP4.9m to be deferred and
recognised as revenue in the year ending 31 December 2022.
The expected consolidated revenues for the year ending 31
December 2021 and the deferred revenues include both IA and C.IM
revenue streams. Approximately 56% of the total of the expected
C.IM revenue for the year ended 31 December 2021 and the deferred
C.IM revenue relate to monitoring, controlling and reporting
services, which are post-IM activities as stated above. Due to the
features of the Group service model, this portion of the C.IM
revenues are expected to be recurring over an indicative
multi-annual period of 3 years.
Given the following initiatives are currently in progress and
have not yet been finalised, the Board of Directors have not
included any potential positive impacts of these initiatives in the
outlook statement set out above:
-- Captive Bank funding;
-- Deployment of the International Chamber of Commerce ("ICC") partnership; and
-- Execution of Shariah compliant inventory monetisation transactions.
The Company aims to present its updated Strategic Plan for the
period 2022-2025 within the course of the existing financial
year.
Forward looking statements and other important information
This announcement contains forward looking statements, which are
statements that are not historical facts and that reflect SYME's
beliefs and expectations with respect to future events and
financial and operational performance as at the date hereof. These
forward looking statements involve known and unknown risks,
uncertainties, assumptions, estimates and other factors, which may
be beyond the control of SYME and which may cause actual results or
performance to differ materially from those expressed or implied
from such forward-looking statements. Nothing contained within this
announcement is or should be relied upon as a warranty, promise or
representation, express or implied, as to the future performance of
SYME or its business. Any historical information contained in this
statistical information is not indicative of future
performance.
The information contained in this announcement is provided as of
the dates shown.
Nothing in this announcement should be construed as:
-- legal, tax, investment, financial, or accounting advice, or
solicitation for or an offer to invest in SYME;
-- a profit forecast or profit estimate and no statement in this
announcement should be interpreted to mean that the future earnings
per share of the Company for current or future financial years will
necessarily match or exceed the historical or published earnings
per share of the Company.
Notes
The Company enables businesses to generate cashflow, via a
non-credit approach and without incurring debt, by monetising their
existing stock which is intended to be sold to end-customers or
through monetisation of goods and or commodities as part of a
typical import/ export transaction. SYME' Global Inventory
Monetisation Fund enables creditworthy companies to improve their
working capital cycle. The Fund does not target monetisation of
inventories owned by companies in financial distress or otherwise
seeking to monetise illiquid inventories.
Contacts
Alessandro Zamboni, CEO, Supply@ME Capital plc,
investors@supplymecapital.com
Paul Vann, Walbrook PR Limited, +44 (0)20 7933 8780;
paul.vann@walbrookpr.com
Brian Norris, Cicero/AMO, +44 (0)20 7947 5317
brian.norris@cicero-group.com
[1] The expected revenue amounts referred to in the outlook
statement have been converted into GBP from the underlying source
currencies using the spot rates on 26 August 2021, being the latest
practicable date prior to the date of this RNS being published.
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END
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