Majority of revenues from Inventory Monetisation transactions deferred into future accounting periods, commencing FY2022.
Significant progress made in securing the Group’s multi-business line FinTech strategy.
[email protected] Capital plc, the innovative fintech platform which provides the Inventory Monetisation© service to manufacturing and trading companies, today provides the following update on its Group revenue projections for the current financial year ending 31 December 2021.
In the Trading Update, published via RNS on 31 August 2021, the Board of Directors expected the Company t o generate consolidated revenues for 2021 in the range of £3.8m – £4.9m.
The revenue guidance set out in the RNS of 31 August, was based on the Group’s pipeline of inventory funding streams (warehoused goods monetisation via “C.IM” revenue) and associated Inventory Funders (Banks and Investment Funds), together with the investment advisory revenue (“IA”) expectations generated by the in-transit goods monetisation managed by TradeFlow Capital Funds. The pipeline referred to above was analysed in detail by the Board of Directors and only those inventory funding streams with the highest confidence factor were included in the revenue guidance published on 31 August 2021.
The Board of Directors now expects a binding contract with the initial Inventory Funder to be finalised prior to 31 December 2021, following which the first Inventory Monetisation (“IM”) transaction is then expected to be completed. As a result, the majority of these revenues will now be recognised in future accounting periods, commencing FY2022, with Group revenues for the year ended 31 December 2021 now expected to be in the range of £0.5m to £0.8m.
Adjusted revenue guidance
The revised revenue guidance for the year ending 31 December 2021 has been calculated on a consistent basis as set out above. The Board now expects the majority of these revenues will be recognised in future accounting periods, commencing from FY2022, as a result of the following:
· One of the Inventory Funders expected to participate in the first IM transaction before the end of the current year and identified as the “Fintech Bank” in the RNS of 29 June 2021, has now chosen to take advantage of the SACE Guarantee Italia* in selecting the initial portfolio of companies for the first IM transaction. This has resulted in some delays in identifying eligible companies, with a SACE guarantee available to them, and packaging the first portfolio for monetisation. This portfolio, which together will form the inaugural IM transaction, is also smaller than previously anticipated, both in terms of the number of client companies and the value of inventory to be monetised at the stage. As such, the revised revenues expected to be recognised in the current financial year will reflect these factors.
While the SACE guarantee initiative has delayed the first IM transaction, it has contributed to an increase of the Group’s pipeline of inventory funding streams and the associated pipeline of Inventory Funders.
*SYME announced it was working with SACE Guarantee Italia, an Italian government scheme introduced in response to Covid-19 to help companies improve their financial position, in the Interim Results Statement, published via RNS on 30 September 2021.
Following the expected successful completion of this first IM transaction, the Board of Directors expects to roll-out further transactions with some of the main Italian banks.
· In addition to the Fintech Bank, the Board’s previous guidance included another Inventory Funder with whom the Group was in advanced discussions regarding the monetisation of a portfolio of client companies prior to 31 December 2021. This particular Inventory Funder has recently proposed to use the Group’s innovative Platform in a White Label business model. Under this model, the Group now expects to charge licence and multi-annual servicing fees to use the Group’s Inventory Monetisation Platform (including the platform software, associated inventory servicing processes and legal documentation) to carry out Inventory Monetisation transactions as a self-funder. Allowing for time to agree the new contractual arrangements for the first White Labelling activity, the Board now expects the future revenues projected to be generated from this Funder to commence recognition during FY 2022.
While this will involve an initial delay, completion of the first White Labelling activity will open up greater access to the SYME platform for other self-funders and new revenue generation opportunities for the Group.
· A further Inventory Funder, specialising in asset evaluation, lending and disposal, which was included in SYME’s previous guidance, has recently proposed to focus its first IM activities to companies in the UK market, in order to speed up the signing of the agreement between parties. In this regard, the Company and this Inventory Funder are currently negotiating a dedicated term sheet with their first IM transaction expected in 2022.
Alessandro Zamboni, Chief Executive of [email protected], said: “Naturally, we eagerly anticipate the completion of the first Inventory Monetisation transactions and the revenue associated with this. We are committed to providing bespoke solutions that align the requirements of our high-quality funders with our portfolio of client companies. The completion of our first monetisation and the lessons learned in its achievement will allow for a smoother process for the future as we scale up. A binding contract with the initial Inventory Funder is expected to be in place prior to 31 December 2021, with the first – inaugural – IM transaction following on from this. While expected revenues for the upcoming reporting period will be significantly different as a result, this represents a delay to our projected revenue stream, rather than lost opportunities.
“Our White Label initiative, in particular, is a complex process with many moving parts and is one, we believe, that must be focused on accuracy rather than speed. Importantly, the Board expects this first agreement to serve as a template for future White Label opportunities, paving the way for future growth, translating into greater value for our shareholders and confirming our multi-business line FinTech strategy”.
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.
[email protected] Capital PLC and its operating subsidiaries (together the “Group”) provide an innovative fintech platform (the “Platform”) for use by manufacturing and trading companies to access inventory trade solutions enabling their businesses to generate cashflow, via a non-credit approach and without incurring debt. This is achieved by their existing eligible inventory being added to the Platform and then monetised via purchase by third party Inventory Funders. The inventory to be monetised can include warehouse goods waiting to be sold to end-customers or goods/commodities that are part of a typical import/export transaction. SYME announced in August 2021 the launch of a global Inventory Monetisation program which will be focused on both inventory in transit monetisation and warehouse goods monetisation. This program will be focused on creditworthy companies and not those in distress or otherwise seeking to monetise illiquid inventories.
Alessandro Zamboni, CEO, [email protected] Capital plc, [email protected]
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