TruFin (TRU ), a technology-focused holding company, announced this morning unaudited results for the 6 months to 30 June 2022 (H1 2022). TruFin's four businesses are Oxygen Finance, Playstack, Satago, and Vertus Capital.
Financial performance
TruFin reported combined gross revenue of £6.3m in H1, a 27% improvement over H1 2021. Gross revenue at Oxygen Finance increased 36% to £2.5m from £1.8m a year ago, driven by growth across all revenue streams from new and existing clients. Playstack maintained gross revenue levels, recording 4% growth to £2.3m.
At Satago, gross interest and fee income increased 120% to £0.6m year-on-year as it focused on its Lending-as-a-Service (LaaS) solutions with Lloyds Bank. At Vertus Capital, gross interest and fee income increased 43% to £0.9m, as a result of an increase in new facilities, overall loan book, and rising interest rates.
Overall, TruFin's audited net assets increased 22.4% to £42.4m from £34.6m in H1 2021, and its pretax loss narrowed to £4.8m from £5.2m the year prior.
Subsidiaries' highlights
Oxygen Finance's early payment revenues saw continued growth. By August, a record number of clients' suppliers had joined Oxygen's early payment programmes. The company's total number of unique clients at the end of H1 2022 was 128, compared to 108 in H1 2021. After an initial full year of EBITDA profit in 2021, Oxygen expects to deliver profitable growth in 2022 and beyond.
Satago entered into a 5-year commercial partnership with Lloyds Bank to license Satago's software platform for use by Lloyd's Single Invoice Finance and Whole of Book Invoice Factoring customers. Rollout will commence in Q4 2022.
Playstack's 2022 console line-up release garnered 1 million views on streaming platforms. One PC game launch has been rescheduled to Q1 2023, allowing release in multiple formats. Playstack acquired Magic Fuel in June 2022 and its team has now been successfully integrated into the Playstack business.
Vertus expects to originate a significant portion of pipeline deals, backlogged by regulatory delays, in September and October of 2022. The company's loan book is expected to grow by 50% to £24m in 2022 from £16m on 31 December 2021, with new loan facilities up 80%. Despite heavy investment, Vertus is forecast to achieve full-year profit in 2022.
James van den Bergh, Chief Executive Officer commented:
"We have had an encouraging first half to 2022, with broad-based growth across the Group reflecting the strong competitive position of each of our companies. Despite inflationary pressures on staff costs and the rising rate environment we remain excited about the value creation opportunities ahead of us.
View from Vox
Without a doubt, the star of TruFin's portfolio in H1 2022 has been Satago. The 5-year contract with Lloyds Bank was a landmark win for the company. Together with its growing list of commercial partners, the agreement puts Satago in an excellent position to continue the rollout of its platform to small and medium-sized businesses.
Satago's revenue more than doubled in H1 2022, with the Lloyds contract expected to provide steady and predictable revenue for years ahead, starting in Q4 2022.
The partnership has opened further opportunities - in June, Satago announced a letter of intent with Sage Group to use Satago's technology to deliver Lloyds' lending products to Sage clients. Partnerships like this can fully leverage Satago's proprietary technology.
Furthermore, in March 2022 Lloyds invested £5m of new equity capital into Satago, followed by a further £2m investment by TruFin in July. Satago is in discussions with several more potential partners, which could generate additional growth.
Not to be outdone, Oxygen and Vertus are both expected to be profitable and cash-flow positive in FY 2022.
Oxygen recorded 55 Early Payment clients at the end of H1 2022, up from 52 a year ago, with combined supplier spend totalling £23bn. Oxygen's revenue growth in 2021 continued into 2022, resulting in EBITDA profit of £0.4m, an increase of 600% year-on-year.
Vertus made substantial investments in tech infrastructure and product development. Even so, it is expected to generate profit in 2022. The company is targeting a loan book of £24m by the end of 2022, compared to £16m on 31 December 2021, and has a near-term loan book goal of £50m.
PlayStack's good performance in 2021 was followed up with a three-year plan to deliver growth in 2022-2024. This resulted in the acquisition of Magic Fuel Games and the securing of publishing rights for three new games to be released within the next year.
Overall, TruFin continues to successfully implement its core strategy of investing in companies early, and guiding them though growth, profitability, and eventually exit. TruFin's revenue is on track to triple from 2021, driven primarily by Satago at this stage, but with steady revenues and cash flow across its entire portfolio.
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