REGISTERED NUMBER: 08007191 (England and Wales) |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
ASSETZ CAPITAL LIMITED |
REGISTERED NUMBER: 08007191 (England and Wales) |
GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
ASSETZ CAPITAL LIMITED |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 March 2024 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Consolidated Statement of Profit or Loss | 10 |
Consolidated Statement of Profit or Loss and Other Comprehensive Income |
11 |
Consolidated Statement of Financial Position | 12 |
Company Statement of Financial Position | 14 |
Consolidated Statement of Changes in Equity | 15 |
Company Statement of Changes in Equity | 16 |
Consolidated Statement of Cash Flows | 17 |
Notes to the Consolidated Financial Statements | 18 |
ASSETZ CAPITAL LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 March 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
100 Barbirolli Square |
Manchester |
M2 3BD |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 March 2024 |
The directors present their Strategic Report for Assetz Capital Limited ("the Group") for the year ended 31 March 2024. |
REVIEW OF THE BUSINESS |
The Group contains wholly owned subsidiary companies carrying out unregulated, property secured UK business lending activity. One subsidiary also carries out FCA regulated, marketplace lending on a run-off basis. We originate property development loans, commercial mortgages, buy-to-let loans and bridging loans and these are funded by a combination of retail, corporate and institutional investors via our proprietary marketplace technology. Our aim is to provide a stable and secure income producing asset class for all investors who engage with our platform and to address a funding gap in under-served UK SME Lending segments. |
The Group's revenues arise principally from fee income charged to borrowers for both facilitating and then servicing their loans. |
The Group has property lending credit knowledge and deep experience at its core, having invested in people with extensive UK SME property-backed lending experience to allow us to facilitate sustainable and profitable lending opportunities for investors. |
DEVELOPMENTS AND PERFORMANCE DURING THE YEAR |
After commencing the journey of evolving our business model to institutional only funding in FY23, the Group continued this evolution in FY24. This evolution is summarised as a move away from originating lower value loans on the peer-to-peer platform to higher value loans for institutional funders. |
We continued to focus on streamlining and simplifying the business, reducing group headcount from over 100 at the start of FY24 to around 50 at the end of the period. In doing so we ensured that sufficient resource was maintained to allow effective management and recovery of the retail and CBILS loan books, returning a significant proportion of investors' funds to them during FY24. Costs relating to the restructuring of the business continued into FY24 and were substantially supported by investor membership fees on the peer to peer platform. |
The main focus for the group, however, was on improving and expanding our panel of institutional funding lines, ensuring that the resources and processes were in place to support origination for them and increasing our lending volume capability on a lower cost base. We increased our panel of institutional funders to 6 active lines which between them have the capacity and appetite to fund annual lending significantly above the levels the Group has delivered through its peer to peer platform. |
Lending levels were subdued in FY24, due to a combination of the time taken for the evolution of our business model and development of our institutional funding lines, as noted above, and also due to general economic conditions being challenging for our target borrowers. |
The directors monitor the progress of the Company by reference to the following financial measures, alongside complimentary KPIs: |
FY24 | FY23 | FY22 | FY21 |
Outstanding Loan Book at period end | £223m | £298m | £357m | £321m |
Loans Originated | £17m | £123m | £267m | £160m |
Revenue | £8.2m | £11.6m | £16.1m | £15.2m |
FY24 | FY23 | FY22 | FY21 |
EBITDA pre exceptionals | £0.8m | £0.9m | -£0.8m | £3.9m |
Operating (Loss) / Profit post exceptionals | -£0.05m | -£1.4m | -£2.8m | £2.5m |
Profit/(Loss) for the Financial Year | £0.13m | -£1.6m | -£3.6m | £2.1m |
Average Headcount | 72 | 126 | 128 | 119 |
Despite the fall in lending levels and accompanying fall in revenues the Group has also managed to reduce its costs significantly so that year on year losses have reduced substantially as a result of actions taken by management, and for this reason the Directors are pleased with the Group's results for the year. |
PRINCIPAL RISKS AND UNCERTAINTIES |
As custodian of loans originated for other investors, the Group has significant resources dedicated to assessing and managing the risk that borrowers may default on their loans. |
In addition to credit risk, the Group manages other risks, including: |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 March 2024 |
Liquidity risk |
The risk that the Group will not be able to meet its financial obligations as they fall due. This is managed by ensuring that there is always sufficient liquidity to meet liabilities when due both under normal and stressed conditions. The directors monitor the liquidity position on an ongoing basis. |
Market risk |
The Group's business is the facilitation of property secured UK SME lending and the directors are aware that a general and persistent weakening of the UK economy and, in particular, property values, may impact on investor appetite for property secured loans. The Group has sought to mitigate these risks by increasing its range of loan funding sources including institutional investors and also by maintaining a modest level of loan to value across the loan book. |
Operational risk |
The Group maintains robust operational systems and controls through its investment in people and technology. A risk committee reports regularly to the directors, and the Group continues its development of a strong operational, risk and compliance function. |
Capital management |
The Group's objective when managing capital is to safeguard its ability to continue as a going concern (referred to in liquidity risk above) and to meet the FCA regulatory capital requirement. Financial performance is regularly reviewed by various committees within the business, focusing on the amount of regulatory and working capital needed. |
FUTURE DEVELOPMENTS |
Since the end of FY24, the evolution of the Group's business model as described above has begun to bear fruit with lending volumes in the first quarter matching that for the whole of FY23. |
We have continued to work with our institutional funders to make our key lending products more market facing and competitive and as a result of these changes, particularly in relation to our Development Finance product, we have significantly improved our competitiveness. In addition, after a slowdown in residential development activity in the lead up to the election, it appears the change in government with their plans to revise planning regulations has given SME developers more confidence to move forwards with their projects. As a direct result of these factors we have seen monthly loan enquiries increase to in excess of £500m consistently, a significantly higher level than the Group has seen for some time. |
The appetite of institutional funders generally seems to have returned since the economic turmoil of 2022 and we have appointed an adviser to identify additional institutions to add to our funding panel for the future. |
Overall, the combination of an improved market outlook for SME Development Lending and an increased appetite for institutional funders creates significant opportunities for growth for the Group and the Directors have a positive outlook for 2025 and beyond. |
ON BEHALF OF THE BOARD: |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 March 2024 |
The directors present their report with the financial statements of the company and the group for the year ended 31 March 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of a marketplace lender. The main focus is secured business and property lending to SME business borrowers. Whilst the majority of lending to date has been retail investor funded under our regulated activity, this has begun to rebalance following the closure of our peer to peer platform to new investment in December 2022, and since then we have been solely focussed on originating loans for institutional funders, which is unregulated activity. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 March 2024. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 April 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
DIRECTOR'S INDEMNITIES |
The Company has indemnified its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in S232 of the Companies Act 2006. Such qualifying third-party indemnity provision was in place during the period and is in force at the date of approving the financial statements. |
DISCLOSURE IN THE STRATEGIC REPORT |
The Company has chosen, in accordance with Section 414 C(ii) of the Companies Act 2006, and as noted in this Directors' Report, to include certain matters in its Strategic Report that would otherwise be required to disclose in this Directors' Report, specifically in respect of the review of the business, key performance indicators, principal business risks and uncertainties and future developments for the company. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with UK-adopted international accounting standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 March 2024 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
In accordance with section 485 of the Companies Act 2006, Xeinadin Audit Limited will be proposed for reappointment. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ASSETZ CAPITAL LIMITED |
Opinion |
We have audited the financial statements of Assetz Capital Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the UK. |
_ |
In our opinion: |
- | the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2024 and of the group's profit for the year then ended; |
- | the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK; |
- | the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and |
- | the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ASSETZ CAPITAL LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ASSETZ CAPITAL LIMITED |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Identifying and assessing potential risks related to irregularities |
In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following: |
- | The nature of the industry and sector, control environment and business performance; |
- | Results of the enquiries of management about their own identification and assessment of the risks ofirregularities; |
- | any matters we have identified having obtained and reviewed the company's documentation of their policies and procedures relating to: |
- | identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; |
- | detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
- | the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; |
- | the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. |
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. |
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation. |
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. |
Audit response to risks identified |
Our procedures to respond to risks identified included the following: |
- | reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; |
- | enquiring of management concerning actual and potential litigation and claims; |
- | performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- | reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and |
- | in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ASSETZ CAPITAL LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
100 Barbirolli Square |
Manchester |
M2 3BD |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS |
for the Year Ended 31 March 2024 |
2024 | 2023 |
Notes | £ | £ |
CONTINUING OPERATIONS |
Revenue | 8,161,242 | 11,579,751 |
Cost of sales | (828,591 | ) | (2,313,856 | ) |
GROSS PROFIT | 7,332,651 | 9,265,895 |
Other operating income | 1,040,412 | 2,632,291 |
Administrative expenses | (8,418,280 | ) | (13,203,997 | ) |
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS |
(45,217 |
) |
(1,305,811 |
) |
Exceptional items | 5 | - | (81,200 | ) |
OPERATING LOSS | (45,217 | ) | (1,387,011 | ) |
Finance costs | 6 | (764,770 | ) | (993,308 | ) |
Finance income | 6 | 366,406 | 25,170 |
LOSS BEFORE INCOME TAX | 7 | (443,581 | ) | (2,355,149 | ) |
Income tax | 8 | 569,520 | 747,522 |
PROFIT/(LOSS) FOR THE YEAR | ( |
) |
Profit/(loss) attributable to: |
Owners of the parent | 125,939 | (1,607,627 | ) |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 March 2024 |
2024 | 2023 |
£ | £ |
PROFIT/(LOSS) FOR THE YEAR | 125,939 | (1,607,627 | ) |
OTHER COMPREHENSIVE LOSS |
Items that will not be reclassified to profit or loss: |
Conversion of option in share issue | - | (134,399 | ) |
Income tax relating to items that will not be reclassified to profit or loss |
- |
- |
- | (134,399 | ) |
Items that may be reclassified subsequently to profit or loss: |
Income tax relating to items that may be reclassified subsequently to profit or loss |
- |
- |
- | - |
OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF INCOME TAX |
- |
(134,399 |
) |
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR |
125,939 |
(1,742,026 |
) |
Total comprehensive income/(loss) attributable to: |
Owners of the parent | 125,939 | (1,742,026 | ) |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
31 March 2024 |
2024 | 2023 |
Notes | £ | £ |
ASSETS |
NON-CURRENT ASSETS |
Owned |
Intangible assets | 10 | 3,103,875 | 3,819,516 |
Property, plant and equipment | 11 | 162,569 | 266,967 |
Right-of-use asset | 12 | 737,050 | 992,990 |
Right-of-use |
Investments | 13 | - | - |
Trade and other receivables | 14 | 649,653 | 745,370 |
4,653,147 | 5,824,843 |
CURRENT ASSETS |
Trade and other receivables | 14 | 2,438,290 | 2,459,577 |
Cash and cash equivalents | 15 | 7,642,306 | 8,804,313 |
10,080,596 | 11,263,890 |
TOTAL ASSETS | 14,733,743 | 17,088,733 |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 16 | 19,153 | 16,652 |
Share premium | 17 | 10,384,138 | 10,384,138 |
Retained earnings | 17 | (8,843,584 | ) | (8,969,523 | ) |
TOTAL EQUITY | 1,559,707 | 1,431,267 |
LIABILITIES |
NON-CURRENT LIABILITIES |
Trade and other payables | 18 | 4,972,885 | 5,322,909 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 19 | 848,237 | 1,110,640 |
Deferred tax | 22 | 5,389 | 19,440 |
Provisions | 21 | 3,723,564 | 5,454,563 |
9,550,075 | 11,907,552 |
CURRENT LIABILITIES |
Trade and other payables | 18 | 3,400,804 | 3,456,068 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 19 | 203,118 | 293,580 |
Tax payable | 20,039 | 266 |
3,623,961 | 3,749,914 |
TOTAL LIABILITIES | 13,174,036 | 15,657,466 |
TOTAL EQUITY AND LIABILITIES | 14,733,743 | 17,088,733 |
The financial statements were approved by the Board of Directors and authorised for issue on 27 January 2025 and were signed on its behalf by: |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - continued |
31 March 2024 |
Mr S A Law - Director |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
COMPANY STATEMENT OF FINANCIAL POSITION |
31 March 2024 |
2024 | 2023 |
Notes | £ | £ |
ASSETS |
NON-CURRENT ASSETS |
Owned |
Intangible assets | 10 |
Property, plant and equipment | 11 |
Right-of-use asset | 12 |
Right-of-use |
Investments | 13 | 13,033,143 | 13,033,143 |
CURRENT ASSETS |
Trade and other receivables | 14 |
Cash and cash equivalents | 15 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 16 |
Share premium | 17 |
Retained earnings | 17 | ( |
) | ( |
) |
TOTAL EQUITY |
LIABILITIES |
NON-CURRENT LIABILITIES |
Trade and other payables | 18 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 19 |
CURRENT LIABILITIES |
Trade and other payables | 18 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 19 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
The financial statements were approved by the Board of Directors and authorised for issue on |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 March 2024 |
Called up |
share | Retained | Share | Other | Total |
capital | earnings | premium | reserves | equity |
£ | £ | £ | £ | £ |
Balance at 1 April 2022 | 15,548 | (7,361,896 | ) | 7,284,598 | 134,399 | 72,649 |
Deficit for the year | - | (1,607,627 | ) | - | - | (1,607,627 | ) |
Other comprehensive income | - | - | - | (134,399 | ) | (134,399 | ) |
Total comprehensive loss | - | (1,607,627 | ) | - | (134,399 | ) | (1,742,026 | ) |
Issue of share capital | 1,104 | - | 3,099,540 | - | 3,100,644 |
Balance at 31 March 2023 | 16,652 | (8,969,523 | ) | 10,384,138 | - | 1,431,267 |
Profit for the year | - | 125,939 | - | - | 125,939 |
Total comprehensive income | - | 125,939 | - | - | 125,939 |
Issue of share capital | 2,501 | - | - | - | 2,501 |
Balance at 31 March 2024 | 19,153 | (8,843,584 | ) | 10,384,138 | - | 1,559,707 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 March 2024 |
Called up |
share | Retained | Share | Other | Total |
capital | earnings | premium | reserves | equity |
£ | £ | £ | £ | £ |
Balance at 1 April 2022 | ( |
) |
Deficit for the year | - | (700,579 | ) | - | - | (700,579 | ) |
Other comprehensive income | - | - | - | ( |
) | (134,399 | ) |
Total comprehensive loss | - | ( |
) | - | ( |
) | ( |
) |
Issue of share capital | - | - |
Balance at 31 March 2023 | ( |
) |
Deficit for the year | - | (546,958 | ) | - | - | (546,958 | ) |
Total comprehensive loss | - | ( |
) | - | ( |
) |
Issue of share capital | - | - |
Balance at 31 March 2024 | ( |
) |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
CONSOLIDATED STATEMENT OF CASH FLOWS |
for the Year Ended 31 March 2024 |
2024 | 2023 |
£ | £ |
Cash flows from operating activities |
Cash generated from operations | 24 | (606,684 | ) | (1,694,643 | ) |
Interest paid | (787,693 | ) | (713,950 | ) |
Lease interest paid | 22,923 | (279,358 | ) |
Tax paid | (13,718 | ) | 228 |
Research and development tax credit | 211,531 | 767,000 |
Net cash from operating activities | (1,173,641 | ) | (1,920,723 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | - | (1,497,143 | ) |
Purchase of tangible fixed assets | (4,408 | ) | (85,955 | ) |
Interest received | 366,406 | 25,170 |
Net cash from investing activities | 361,998 | (1,557,928 | ) |
Cash flows from financing activities |
Payment of lease liabilities | (352,865 | ) | (293,931 | ) |
Share issue | 2,501 | 1,104 |
Convertible loan | - | (134,399 | ) |
Share premium | - | 3,099,540 |
Net cash from financing activities | (350,364 | ) | 2,672,314 |
Decrease in cash and cash equivalents | (1,162,007 | ) | (806,337 | ) |
Cash and cash equivalents at beginning of year |
25 |
8,804,313 |
9,610,650 |
Cash and cash equivalents at end of year |
25 |
7,642,306 |
8,804,313 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 March 2024 |
1. | STATUTORY INFORMATION |
Assetz Capital Limited is a private company limited by share capital, incorporated in England and Wales, registration number 08007191. The address of the registered office and principal place of business is Assetz House, Manchester Green, 335 Styal Road, Manchester, England, M22 5LW. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
These annual financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. |
The group maintains it books and records in sterling ("£") and presents its annual financial statements in conformity with United Kingdom laws and regulations. |
Going concern |
The financial statements have been prepared on a going concern basis, applying a historical cost convention except for certain financial instruments that are carried at fair value. |
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Group Strategic Report on pages 2 to 3. In addition, the financial statements include the Group's objectives, policies, and processes for managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk. |
As described in the Group Strategic Report on page 3, the economic environment has been difficult, leading to variable lending volumes, and the Group has reported an operating loss for the year. The Group has now successfully established a panel of 6 active institutional funding lines which between them can support annual lending in excess of the capacity of the peer to peer platform, but at much lower cost of delivery. These activated funding lines, and market expectations of a reduction in interest rates in the near term have fuelled a growth in the Group's funding pipeline which the directors consider will trigger a return to lending growth for the Group in the coming months. |
The Groups forecasts and projections, taking account of changes in trading, show that the group should be able to operate within the level of its current and anticipated funding arrangements. Further, the group's recent operational re-structure, to reflect the substantial productivity improvements of working with larger loans enabled by institutional funders, has made the core operations of the group more resilient to future uncertainties which may arise. |
After making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
Basis of consolidation |
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31st March 2023. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the profit or loss and other comprehensive income from the date that control commences until the date that control ceases. Control is established when the company has the power to govern the operating and financial policies of an entity as to obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that are currently exercisable. |
Revenue recognition |
Revenue represents fees receivable for the arranging and servicing of finance through the marketplace lending platform. |
Revenue earned for the arrangement of finance is classified as arrangement fees and is recognised immediately once loans are fully funded on the marketplace and after the loans are accepted by the borrowers. Such fees are automatically deducted from the amount borrowed and recognised at that point as the group has the right to consideration. |
Revenue earned from servicing of finance via the marketplace lending platform is recognised at the beginning of the contract to the extent of the minimum revenue entitlement to be contractually received by the group in relation to the loan agreement, and thereafter on receipt. |
Revenue comprises the fair value of the consideration received or receivable in the ordinary course of the group's activities. All revenue recorded in the financial statements is generated in the UK and sourced from financing transactions. All fees are calculated based on the above revenue recognition policies. |
Interest receivable |
Interest receivable is recognised on an accruals basis within 'Finance income' in the statement of comprehensive income. |
Administrative expenses |
Expenses are recognised as an expense in the statement of comprehensive income in the period in which they are incurred on an accruals basis. |
Capitalised development costs |
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the company are recognised as intangible assets when the following criteria are met: |
- | it is technically feasible to complete the software product so that it will be available for use; |
- | management intends to complete the software product and use or sell it; |
- | there is the ability to use or sell the software product; |
- | it can be demonstrated how the software product will generate probable future economic benefits; |
- | adequate technical, financial and other resources to complete the development and to use or sell; |
- | the software product are available; and |
- | the expenditure attributable to the software product during its development can be reliably measured. |
Directly attributable costs that are capitalised as part of the software product include the software development employee costs. |
Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. |
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use over their estimated useful lives of five years. These Items relate to the development of the company's technology platform. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
Property, plant and equipment |
Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment losses. |
Depreciation on Property, Plant and Equipment is charged to the profit and loss so as to write off their value, over their estimated useful lives, using the following methods: |
Plant and machinery | - | 25% on cost |
Fixtures and fittings | - | 25% on cost |
Computer equipment | - | 25% on cost |
Motor vehicles | - | 25% reducing balance |
At each balance sheet date, the group reviews the carrying amounts of its fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of the asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately. |
Financial instruments |
Financial assets |
The group determines the classification of its financial assets at initial recognition. From 1 April 2018 the requirements of IFRS 9 for classification and subsequent measurement have been applied which require financial assets to be classified based on the group's business model for managing the asset, and the contractual cash flow characteristics of the asset: |
- | Financial assets are measured at amortised cost if they are held within a business model the objective of which is to hold financial assets in order to collect contractual cash flows, and their contractual cash flows represent solely payments of principal and interest. |
- | Financial assets are measured at fair value through profit or loss if they are held within a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets and their contractual cash flows represent solely payments of principal and interest. |
- | Financial assets that do not meet the criteria to be amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. In addition, the group may, at initial recognition, designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch. |
Financial instruments - continued |
When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. · |
The group does not recognise on its balance sheet loans arranged between borrowers and investors as it is not a principal party to the contracts and is not exposed to the risks and rewards of these loans. |
Financial assets recognised in the balance sheet as trade and other receivables are classified as loans and receivables (from 1 April 2018: amortised cost). They are recognised at fair value and subsequently measured at amortised cost less provision for impairment. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The group applied the impairment requirements of IFRS 9. The IFRS 9 impairment model introduces a three-stage approach: |
Stage 1 includes financial instruments that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the reporting date. For these assets, 12-month expected credit losses (that is, expected losses arising from the risk of default in the next 12 months) are recognised and interest revenue is calculated on the gross carrying amount of the asset (that is, without deduction for credit allowance). |
Stage 2 includes financial instruments that have had a significant increase in credit risk since initial recognition (unless they have low credit risk at the reporting date) but are not credit-impaired. For these assets, lifetime ECL (that is, expected losses arising from the risk of default over the life of the financial instrument) are recognised, and interest revenue is still calculated on the gross carrying amount of the asset. |
Stage 3 consists of financial assets that are credit-impaired, which is when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. For these assets, lifetime ECL are also recognised, but interest revenue is calculated on the net carrying amount (that is, net of the ECL allowance). |
The introduction of the 'expected credit loss' model has not significantly impacted the group's accounting as it does not have any complex financial instruments or material credit risks. The group uses its historical experience, external indicators and forward-looking information to calculate expected credit losses. |
Derecognition of financial assets |
Financial assets are derecognised only when the contractual rights to the cash flows from the financial assets expire or the group has either transferred the contractual right to receive the cash flows from that asset, or has assumed an obligation to pay those cash flows to one or more recipients. |
The group derecognises a transferred financial assets if it transfers substantially all the risks and rewards of ownership. |
Financial liabilities |
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. |
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised cost. The fair value of a non-interest bearing liability is its discounted repayment amount. If the due date of the liability is less than one year, discounting is omitted. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
Current and deferred tax |
The tax expense for the period comprises current and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the year end date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate, based on amounts expected to be paid to the tax authorities. |
Deferred tax assets for unused tax losses, tax credits and deductible temporary are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. |
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities and there is an intention to settle the balances on a net basis. |
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affect neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates and laws that have been enacted or substantially enacted at the year-end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax balances are not discounted. |
The group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17. |
At inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group uses the definition of a lease in IFRS 16. |
The group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimated of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. |
The right of use asset is subsequently depreciated using the straight line method from the commencement date to the end of the lease term. |
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group’s incremental borrowing rate. Generally, the group uses its incremental borrowing rate as the discount rate. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
The group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: |
- | fixed payments, including in-substance fixed payments; |
- | variable lease payments that depend on an index or a rate, initially measured using the index orrate as at the commencement date; |
- | amounts expected to be payable under a residual value guarantee; and |
- | the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the group is reasonably certain not to terminate early. |
Leases |
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the group’s estimate of the amount expected to be payable under a residual value guarantee, if the group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. |
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right of use asset has been reduced to zero. |
The group presents right of use assets separately on the statement of financial position and has elected not to recognise right of use assets and lease liabilities for leases of low value assets or short-term leases. The group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Pension obligations |
The group operates a defined contribution pension scheme. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. The group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Contributions payable to the group's pension scheme are charged to the Statement of comprehensive income in the period to which they relate. The group has no further payment obligations once the contributions have been paid. |
Trade and other receivables |
Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts. |
Trade and other payables |
Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
2. | ACCOUNTING POLICIES - continued |
Cash and cash equivalents |
Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value. |
Provisions |
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
Estimates and judgements are continually evaluated and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The following are the key sources of estimation uncertainty that the Directors have made in the process of applying the group's accounting policies and have the most significant effect on the amounts recognised in the financial statements: |
Assessment of Subsidiary carrying value |
In the financial year end 2024 group accounts reflect the cost of the investment by the parent company in the subsidiary Assetz SME Capital Ltd, with a book value of £13m (at cost). This is supported by: |
- | Equity value of Assetz SME in its FY24 accounts of £4.5m - including key elements accounted for such as Intellectual Property relating to the IT systems it has built and developed over the years; |
- | Tax losses of some £7.5m - these losses may in time be surrendered as part of R&D claims which the company routinely makes each year, or are available to other group companies to offset against future profits. In terms of realisable value these are estimated to be worth at least £2m; |
- | Brand value and sales relationships - not recognised formally as an asset, the Assetz Capital brand has been built up over 10 years as a marketplace lender, and at any one time has substantial live finance opportunities it works on (to generate future income). The Group has clear plans in place to leverage that brand into future income generation. Although not formally valued, the Group estimates the brand value to be sufficient, in addition to the other asset values listed above, to support the carrying value of its investment in Assetz SME Capital at March 2024. |
Useful life of intangible assets |
The assessment of the useful economic life of the group's internally developed and acquired software and licences is judgemental and can change due to obsolescence due to unforeseen technological developments, and other factors. |
The useful life of licences represents management's view of the expected term over which the group will receive benefits from the software, and does not exceed the licence term. |
For internally developed and acquired software the life is based on historical experience with similar products as well as anticipation of future events which may impact their useful economic life. |
Provisions for liabilities |
The group holds cash balances relating to discretionary funds operated by the peer to peer platform of its subsidiary, Assetz SME Capital Limited. |
When calculating the provision, management utilises historical loan behaviours and its own experiences to determine the provisions which may be required to be accounted for at a given time. These provisions relate to the potential coverage of some or all of the capital losses on peer to peer loans on a discretionary basis, should capital losses arise from a defaulted loan post any recovery work carried out. |
The group reviews and adjusts the balances of provisions appropriate for the level of risk and the timing of that risk - the credit for this financial year being released to the profit and loss is £1,040,413 (2023: £2,632,292) but does not change the cash balances held by the group. |
At the reporting date, the provision for liabilities totalled £3,723,564 (2023: £5,454,563). |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
Financial risk management |
The Board has overall responsibility for the establishment and oversight of the group's risk management framework. |
The risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and ensure any limits are adhered to. |
The group's activities are reviewed regularly and potential risks are considered. |
Risk factors |
The group has exposure to the following risks from its use of financial instruments: |
- Credit risk |
- Liquidity risk |
Principal financial instruments |
The principal financial instruments used by the group from which financial instrument risk arises, are as follows: |
- Loan due from and payable to related undertakings |
- Trade and other receivables |
- Cash and cash equivalents |
- Trade and other payables |
- Categorization of financial assets and financial liabilities |
Credit risk |
Credit risk is the risk of financial loss to the group if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the group's receivables from customers and cash and cash equivalents held at banks. |
The group's maximum exposure to credit risk by class of financial asset is as follows: |
2024 | 2023 |
£ | £ |
Assets |
Trade and other receivables | 3,087,943 | 3,204,947 |
Cash and cash equivalents | 7,642,306 | 8,804,313 |
10,730,249 | 12,009,260 |
Trade receivables of £1,684,097 (2023: £1,954,682) represent invoiced amount in respect of servicing fees due from borrowers. The risk of financial loss is deemed minimal because all funding are secured. |
Ongoing credit evaluation is performed on the financial condition of other receivables. |
Individual risk limits for banks and financial institutions are set by external rating agencies. The credit risk on cash and cash equivalents is managed under the group's treasury policy that stipulates the limits and quantities that the group must remain within. No credit or counter party limits were exceeded during the year. |
Liquidity risk |
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's position. |
The group's liquidity position is monitored and reviewed on an ongoing basis by the directors. |
Capital management |
The group's objective when managing capital is to safeguard its ability to continue as a going concern and to meet the FCA regulatory capital requirements. Financial performance is regularly reviewed by various committees in the business, focusing on the amount of regulatory and working capital needed. This is especially important as the business continues to expand. The process includes the monitoring of FCA returns as well as the annual budget and forecast process from which cashflow and capital assessments and projections are made. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
4. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries | 5,481,631 | 6,902,512 |
Social security costs | 258,151 | 1,043,000 |
Other pension costs | 91,864 | 266,279 |
5,831,646 | 8,211,791 |
The average number of employees during the year was as follows: |
2024 | 2023 |
Product & technology | 2 | 20 |
Operations, support and administrative | 56 | 80 |
Sales | 14 | 26 |
2024 | 2023 |
£ | £ |
Directors' remuneration | 452,243 | 841,874 |
Information regarding the highest paid director is as follows: |
2024 | 2023 |
£ | £ |
Emoluments etc | 182,183 | 187,772 |
The directors of the company are also considered to be the key management personnel of the group. |
5. | EXCEPTIONAL ITEMS |
A charge of £nil (2023: £81,200) was expensed to the profit and loss account in the period relating to a default of a non-property backed loan arranged by the company in its early years of business. This relates to payments made to third party lenders and related costs. The company has been able to recover its substantial costs on this matter during the period. |
6. | NET FINANCE COSTS |
2024 | 2023 |
£ | £ |
Finance income: |
Deposit account interest | 366,406 | 25,170 |
Finance costs: |
Other interest paid | - | 10,812 |
Loan Interest | 787,693 | 703,138 |
Leasing | (22,923 | ) | 279,358 |
764,770 | 993,308 |
Net finance costs | 398,364 | 968,138 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
7. | LOSS BEFORE INCOME TAX |
31.3.24 | 31.3.23 |
£ | £ |
Amortisation | 715,641 | 1,319,196 |
Depreciation - owned assets | 67,919 | 61,366 |
Depreciation - HP assets | 40,887 | 40,887 |
Right of use assets finance cost | 210,586 | 279,358 |
Auditor's remuneration | 67,917 | 65,400 |
8. | INCOME TAX |
Analysis of tax income |
2024 | 2023 |
£ | £ |
Current tax: |
Tax | - | 38 |
Research and development |
credit | (555,469 | ) | (767,000 | ) |
Total current tax | (555,469 | ) | (766,962 | ) |
Deferred tax | (14,051 | ) | 19,440 |
Total tax income in consolidated statement of profit or loss | (569,520 | ) | (747,522 | ) |
9. | LOSS OF PARENT COMPANY |
As permitted by Section 408 of the Companies Act 2006, the statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's total comprehensive loss for the financial year was £546,958 (2023: £834,978). |
10. | INTANGIBLE ASSETS |
Group |
Development |
costs |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 | 7,134,750 |
AMORTISATION |
At 1 April 2023 | 3,315,234 |
Amortisation for year | 715,641 |
At 31 March 2024 | 4,030,875 |
NET BOOK VALUE |
At 31 March 2024 | 3,103,875 |
At 31 March 2023 | 3,819,516 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
11. | PROPERTY, PLANT AND EQUIPMENT |
Group |
Fixtures |
Plant and | and | Motor | Computer |
machinery | fittings | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 April 2023 | 215,803 | 372,944 | 119,043 | 443,706 | 1,151,496 |
Additions | - | - | - | 4,408 | 4,408 |
At 31 March 2024 | 215,803 | 372,944 | 119,043 | 448,114 | 1,155,904 |
DEPRECIATION |
At 1 April 2023 | 203,142 | 352,992 | 32,241 | 296,154 | 884,529 |
Charge for year | 4,084 | 5,371 | 29,761 | 69,590 | 108,806 |
At 31 March 2024 | 207,226 | 358,363 | 62,002 | 365,744 | 993,335 |
NET BOOK VALUE |
At 31 March 2024 | 8,577 | 14,581 | 57,041 | 82,370 | 162,569 |
At 31 March 2023 | 12,661 | 19,952 | 86,802 | 147,552 | 266,967 |
The entire net book value of Motor vehicles is in respect of assets held under hire purchase contracts. |
The net book value of computer equipment includes £18,543 (2023: £29,760) in respect of assets held under hire purchase contract. |
Company |
Motor |
vehicles |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 |
DEPRECIATION |
At 1 April 2023 |
Charge for year |
At 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
12. | RIGHT-OF-USE ASSET |
Group |
Total |
£ |
FAIR VALUE |
At 1 April 2023 | 1,875,648 |
Disposals | (730,728 | ) |
At 31 March 2024 | 1,144,920 |
DEPRECIATION |
At 1 April 2023 | 882,658 |
Charge for year | 210,586 |
Eliminated on disposal | (685,374 | ) |
At 31 March 2024 | 407,870 |
NET BOOK VALUE |
At 31 March 2024 | 737,050 |
At 31 March 2023 | 992,990 |
13. | INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 April 2023 |
and 31 March 2024 | 13,033,143 |
NET BOOK VALUE |
At 31 March 2024 | 13,033,143 |
At 31 March 2023 | 13,033,143 |
The following are subsidiary undertakings of the company: |
Name |
Country of Incorporation |
Class of shares |
Holding |
Principal activity |
Assetz SME Capital Limited | England and Wales | Ordinary | 100% | Financial services |
Assetz Development Capital Limited | England and Wales | Ordinary | 100% | Financial services |
Assetz Provision Funding Limited | England and Wales | Ordinary | 100% | Provision Fund |
Assetz Capital Lending (Alpha) Limited |
England and Wales |
Ordinary |
100% |
Dormant |
Assetz Capital Lending (Bravo) Limited |
England and Wales |
Ordinary |
100% |
Dormant |
Assetz 2023 Limited | England and Wales | Ordinary | 100% | Financial services |
The registered office and principal place of business of all of the above mentioned companies is Assetz House, Manchester Green, 335 Styal Road, Manchester, M22 5LW. |
The financial year end of all of the subsidiaries is 31st March 2024. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
14. | TRADE AND OTHER RECEIVABLES |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Current: |
Trade debtors | 1,034,444 | 1,209,312 |
Other debtors | 925,680 | 1,001,679 | 11,574 | 11,424 |
Prepayments and accrued income | 478,166 | 248,586 | - | - |
2,438,290 | 2,459,577 |
Non-current: |
Trade debtors | 649,653 | 745,370 |
Aggregate amounts | 3,087,943 | 3,204,947 |
15. | CASH AND CASH EQUIVALENTS |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Cash in hand | 580 | 580 |
Bank accounts | 7,641,726 | 8,803,733 |
7,642,306 | 8,804,313 |
16. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
Value | £ | £ |
10,630,473 | Ordinary A | 0.1p | 10,630 | 10,630 |
75,000 | Ordinary F | 0.1p | 75 | 75 |
6,000 | Ordinary G | 0.1p | 6 | 6 |
1,750,000 | Ordinary G1 | 0.1p | 1,750 | - |
150,000 | Ordinary G2 | 0.1p | 150 | 150 |
324,000 | Ordinary I | 0.1p | 324 | - |
426,000 | Ordinary I1 | 0.1p | 426 | - |
5,791,897 | Ordinary O | 0.1p | 5,792 | 5,791 |
19,153 | 16,652 |
On 13th November 2023: |
The company issued 1,750,000 Ordinary G1 Shares at par value with a nominal value of 0.1p each per share. |
The company issued 324,000 Ordinary I Shares at par value with a nominal value of 0.1p each per share. |
The company issued 426,000 Ordinary I1 Shares at par value with a nominal value of 0.1p each per share. |
The company issued 1,000 Ordinary O Shares at par value with a nominal value of 0.1p each per share. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
17. | RESERVES |
Group |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 April 2023 | (8,969,523 | ) | 10,384,138 | 1,414,615 |
Profit for the year | 125,939 | 125,939 |
At 31 March 2024 | (8,843,584 | ) | 10,384,138 | 1,540,554 |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 April 2023 | ( |
) | 6,844,264 |
Deficit for the year | ( |
) | ( |
) |
At 31 March 2024 | ( |
) | 6,297,306 |
18. | TRADE AND OTHER PAYABLES |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Current: |
Trade creditors | 412,180 | 843,873 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 450,684 | 277,265 |
Other creditors | 2,037,839 | 1,856,809 |
Accrued expenses | 499,117 | 435,744 | 229,178 | 162,516 |
VAT | 984 | 42,377 | - | - |
3,400,804 | 3,456,068 |
Non-current: |
Other creditors | 4,972,885 | 5,322,909 |
4,972,885 | 5,322,909 |
Aggregate amounts | 8,373,689 | 8,778,977 |
19. | FINANCIAL LIABILITIES - BORROWINGS |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Current: |
Leases (see note 20) | 203,118 | 293,580 | 8,217 | 8,954 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
19. | FINANCIAL LIABILITIES - BORROWINGS - continued |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Non-current: |
Leases (see note 20) | 848,237 | 1,110,640 | 82,543 | 90,085 |
Terms and debt repayment schedule |
Group |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£ | £ | £ | £ |
Leases | 203,118 | 373,208 | 475,029 | 1,051,355 |
20. | SECURED DEBTS |
Group |
Lease liabilities |
Minimum lease payments fall due as follows: |
2024 | 2023 |
£ | £ |
Gross obligations repayable: |
Within one year | 274,372 | 346,154 |
Between one and five years | 899,006 | 1,178,213 |
1,173,378 | 1,524,367 |
Finance charges repayable: |
Within one year | 71,254 | 52,574 |
Between one and five years | 50,769 | 67,573 |
122,023 | 120,147 |
Net obligations repayable: |
Within one year | 203,118 | 293,580 |
Between one and five years | 848,237 | 1,110,640 |
1,051,355 | 1,404,220 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
20. | LEASING - continued |
Company |
Lease liabilities |
Minimum lease payments fall due as follows: |
2024 | 2023 |
£ | £ |
Gross obligations repayable: |
Within one year | 15,385 | 15,386 |
Between one and five years | 86,135 | 102,413 |
101,520 | 117,799 |
Finance charges repayable: |
Within one year | 7,168 | 6,432 |
Between one and five years | 3,592 | 12,328 |
10,760 | 18,760 |
Net obligations repayable: |
Within one year | 8,217 | 8,954 |
Between one and five years | 82,543 | 90,085 |
90,760 | 99,039 |
The following secured debts are included within other creditors: |
2024 | 2023 |
£ | £ |
Third party loans | 436,344 | 797,286 |
Other creditors are fixed charges dated 23rd January 2015, 6th February 2015, 22nd December 2021 and 29th January 2024 and contain negative pledges. |
21. | PROVISIONS |
Group |
2024 | 2023 |
£ | £ |
Other provisions | 3,723,564 | 5,454,563 |
Analysed as follows: |
Non-current | 3,723,564 | 5,454,563 |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
21. | PROVISIONS - continued |
Other provisions |
£ |
Balance at 1 April 2023 | 5,454,563 |
New provision during the year |
Capital payouts | (763,000 | ) |
Released during the year | (968,000 | ) |
Balance at 31 March 2024 | 3,723,563 |
22. | DEFERRED TAX |
Group |
2024 | 2023 |
£ | £ |
Balance at 1 April | 19,440 | - |
Movement in the year | (14,051 | ) | 19,440 |
Balance at 31 March |
23. | EVENTS AFTER THE REPORTING PERIOD |
On 24th June 2024 the following shares were allotted: |
The company issued 400,000 ordinary G1 shares with a nominal value of 0.001p each per share. |
The company issued 324,000 ordinary I1 shares with a nominal value of 0.001p each per share. |
On 27th August 2024 the following shares were allotted: |
The company issued 200,000 ordinary L2 shares with a nominal value of 0.001p each per share. |
The company issued 400,000 ordinary L3 shares with a nominal value of 0.001p each per share. |
The company issued 100,000 ordinary L4 shares with a nominal value of 0.001p each per share. |
The company issued 100,000 ordinary L5 shares with a nominal value of 0.001p each per share. |
On 3rd September 2024 the following shares were allotted: |
The company issued a further 300,000 ordinary L3 shares with a nominal value of 0.001p each per share. |
The company issued a further 200,000 ordinary L4 shares with a nominal value of 0.001p each per share. |
The company issued a further 200,000 ordinary L5 shares with a nominal value of 0.001p each per share. |
On 18th October 2024 the following shares were allotted: |
The company issued a further 216,000 ordinary G1 shares with a nominal value of 0.001p each per share. |
The company issued 162,000 ordinary G2 shares with a nominal value of 0.001p each per share. |
The company issued a further 108,000 ordinary I1 shares with a nominal value of 0.001p each per share. |
After the year end, the name of a subsidiary changed from Assetz 2023 Limited to Assetz Capital Funding Limited. |
ASSETZ CAPITAL LIMITED (REGISTERED NUMBER: 08007191) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2024 |
24. | RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Loss before income tax | (443,581 | ) | (2,355,149 | ) |
Depreciation charges | 1,035,033 | 1,642,113 |
Loss on disposal of fixed assets | 45,354 | - |
Movement in provisions | (1,730,999 | ) | (2,959,837 | ) |
Finance costs | 764,770 | 993,308 |
Finance income | (366,406 | ) | (25,170 | ) |
(695,829 | ) | (2,704,735 | ) |
Increase in trade and other receivables | (75,087 | ) | (72,542 | ) |
Increase in trade and other payables | 164,232 | 1,082,634 |
Cash generated from operations | (606,684 | ) | (1,694,643 | ) |
25. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 March 2024 |
31.3.24 | 1.4.23 |
£ | £ |
Cash and cash equivalents | 7,642,306 | 8,804,313 |
Year ended 31 March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 8,804,313 | 9,610,650 |