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TruFin shares rise on strong portfolio performance in FY23

11:18, 8th February 2024
Victor Parker
Vox Newswire
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TruFin (TRUFollow | TRU, a fintech-focused investment company, issued a further trading update for the 12 months to December 31, 2023 (FY23). Revenue is expected to be no less than £20.2m, up from £15.3m in FY22, representing year-on-year growth of 32%.

Adjusted EBITDA loss is to be ahead of previous expectations at no more than £(3.0)m, representing a 47% year-on-year improvement. Adjusted loss before tax is expected to be in line with market expectations at no more than £(6.3), up from £(8.2)m last year.

Cash at year-end was no less than £9m, of which unrestricted cash was £5.5m.

Within TruFin's portfolio, Oxygen Finance Group increased revenue by 18% in FY23 to £6.2m from £5.3m last year. Satago Financial Solutions grew revenue by 72% to £3.8m from £2.2m in FY22, and game publisher Playstack expects to be EBITDA profitable in FY23, supported by the launch of The Last Faith in Q4 2023.

Oxygen Finance, an early payments programme provider, invested £1.2m in its platform and staff, expected to support continued revenue and profitability growth in FY24. Oxygen also acquired bidstats.uk, a popular portal for public sector tendering, saying it was performing in line with expectations. Oxygen's core Early Payment revenue grew 25% during the period, and the company delivered EBITDA of £1.3m, up from £1.1m last year.

By the end of FY23, Oxygen had signed 4,922 suppliers who transacted £1bn of invoices during the year. Oxygen also saw a rise in Early Payment customers purchasing 2 or more products to c. 50% in FY23, up from 17% last year.

TruFin's finance software subsidiary Satago continued to build momentum as Lloyds Banking Group began migrating exiting factoring clients onto Satago's platform in H2 2023. Following a successful test phase, a material portion of Lloyds clients are expected to migrate in FY24.

Satago's reported 70% revenue growth, mostly driven by the successful rollout of its LaaS product and growing factoring book. Satago's customer base doubled to 967 from 430 in FY22, with significant subscriber growth expected to continue in FY24.

Last but not least, game publisher Playstack launched 3 critically acclaimed titles - The Last Faith, AK-Xolotl and CityScapes: Sim Builder - and secured 6 platform deals across 5 titles. Revenue for FY23 was £8.0m, up from £6.3m a year ago, slightly short of expectations due to platform deal delays. Despite the delays, the game publisher achieved its target of EBITDA profitability in FY23.

Playstack also achieved significant diversification of revenue in FY23. In FY21, 85% of its revenue came from 1 game while in FY23, 85% of revenue was generated from 8 games, with a further 6 in development and slated for release in FY24. Since inecption, including all PC and console game launches, Playstack has achieved an impressive average ROI of 384% with a weighted IRR of over 300%.

 

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A positive trading update from TruFin, reporting significantly narrowed adjusted EBITDA loss ahead of market expectations, and robust 32% revenue growth. Cash at year-end was £9m, of which unrestricted cash £5.5m, and the group is fully funded to profitability. TRU shares rose 4.2% on the news.

TruFin had already released a similar update on FY23 performance in January, however today's update featured further details on the performance of its 3 main portfolio companies - Oxygen Finance, Satago, and Playstack. After disposing of Vertus, TruFin made significant investments in the 3 companies during the period.

As mentioned, all 3 registered significant growth. Oxygen's core revenue jumped by 25% after the acquisition of bidstats.uk, and it grew its repeat customer base significantly. Looking ahead, Oxygen has a pipeline of over 100 potential clients with 40 in active engagement, painting a positive outlook for FY24.

Satago's revenues jumped 70% as it doubled its customer base, continued development of its LaaS product, and welcomed Lloyd's factoring clients. Subscriber growth is continuing into FY24 as the company has attracted significant interest in its digitised proposition from both British and overseas banks.

While Playstack missed revenue forecast, it achieved its target of profitability in FY23, with growth set to continue as more titles are published in FY24. So far, the game publisher has achieved an impressive ROI of 384%.

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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