Finseta (LSE:FIN) — Final results for the year ended 31 December 2025

0:00 Good morning, and welcome to the FINSETA PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. Before we begin, I'd like to make the following poll. And I'd like to hand you over to James Hickman, CEO. Good morning, sir. Good morning, and thank you. So this is a presentation on our full year results 2025. And my name is James Hickman, CEO. And let me introduce our new CFO, Andrew Richards. Andrew? Yeah. Good morning, all. Pleased to meet you. My name is Andrew Richards, group CFO. I joined the business in February this year, so still fairly new to the business.

0:47 And I'm pleased to be joining James and the team at this very exciting time for the company. A bit of further background about me. I I previously spent twelve years at Chesnar, a PLC, a listed life insurance company, where I was The UK CFO for nine of those years. Pleased to meet you. Thank you. So without further ado, just a little bit of a reminder about FINSETA and what we do. We provide financial solutions for businesses with complexity. We do this through our proprietary technology platform. This is all in house. Everything has been built in house. We provide a specialist payment account, multicurrency capability to meet our specific customer needs.

1:37 We have deep expertise in our verticals that we operate in together with very strong client relationships. And we do this by very much high touch, high service backed by an extremely good and market leading platform. We're able to onboard with complex needs and requirements. And by customers with complex needs, I I'm talking about SPV special purpose vehicles. I'm talking about it could be industry. It could be geographic. And these are these are customers, typically businesses, that find challenges within the traditional banking banking rails.

2:24 And we're able to onboard in a compliant manner and manage those customers and ultimately provide a product and a service that meets their needs. The we do this through our expert account managers, all of all of whom are extremely experienced and are able to assist our clients with any of their financial service requirements around payments that they may need. Are backed by a number of banking partners. We have a tier one bank that underpins our agency banking, which is is absolutely critical, and we'll we'll touch on that in a minute in terms of what's been achieved for 2025.

3:12 Within 2025, we've continued our revenue growth, and Andrew will go through some of the numbers in a a little little bit bit more detail shortly. One of the critical things that we we achieved within 2025 was our agency banking. Agency banking ultimately allows FINSETA its its own sort code and direct participation into the payments networks and ultimately allowing us to generate accounts for our customers. And we do this through, as I say, Barclays. We also have a relationship with ClearBank as well. You will notice from the numbers, and we worked very hard over the last couple of years to to achieve this, that we have switched much more of our revenue and focus towards business, and this comes across from platform development.

4:09 Everything we have done internally has been very much around moving from from more from consumer much more towards business revenue. Now that's not to say we're ignoring consumers because we we do service them, but, ultimately, the focus for the business is very much b to b. Ultimately, it allows us to better retain customers, more repeat revenue, and larger revenue opportunities. Also in 2025, we got regulatory approval in Canada, regulatory approve approval in Dubai, and and more importantly, actually, full service operations and and banking infrastructure in both both jurisdictions, which, by the way, is not easy to do.

4:59 And that is that has been a real milestone for us in terms of our geographic spread. In terms of the numbers, I'll let Andrew touch on those in terms of highlights. Yeah. I think overall story on this is is there's been no no major news in our financials compared to the the market update that was provided by by James and Judy back in back in January. Pulling out a couple of the key points, as James mentioned, our revenue has has grown by by 9% in in in '25 compared to 2024. It reflects the following sort of key key features. It reflects our our substantial growth in our Dubai operation. It does reflect the fact that our our sales mix has moved more towards corporates and high net worth individuals, and it also reflects some strong growth in our alternative bank banking area as as well. In terms of the margin, the margin is slightly down compared to 2024, but that reflects the the the the slight slight sort of greater weight towards the towards corporates rather than high net worth individuals.

6:00 But we believe that margin trade off is is worth in terms of the potential for repeat revenue from corporates versus the more, one off transactional nature of of of selling to to high net worth individuals. EBITDA. EBITDA is is is down quite significantly compared to 2024, but is in line with expectations and what was previously reported, and reflects our our expected and planned investment in the business in our sort of key key strategic growth areas, those being in in Dubai, expanding our Dubai operation, in our cards program, and and also within our central UK team as as as well. And just touching on cash and cash equivalents. Again, that reflects our that reduction over the year reflects our our planned investment in in in the business, and and we are still contributing cash over the course of 2025.

6:55 So a little bit onto the strategy. I thought it very much I this is 2025 results, but actually looking forward a little bit into 2026 and beyond, the business very much is now focused on onboarding and and processing for complex business verticals. This is a a real niche that we feel that we have an excellent product market fit for. We have the expertise. We have the capabilities. And really, we're making really, really good progress in in the in these verticals. As a as a relatively small business, you'll appreciate, you know, it it's very important to have focus, and and we really believe that we found our focus here and that will set us apart and really give us competitive advantage in the years to come.

7:49 We continue to innovate in a very much client or customer led fashion, and we've always done this, by the way. Ultimately, we're building our platform and enhancing our platform in answer to our customers' requirements. And in particular, in specific verticals have specific requirements, and we're doing that through our through our in house team. We've realigned the sales strategy to make sure that we're we're in step with this with the total strategy of the business, and this is very much getting more recurring revenue and and and less one off transactional revenue. So the point about building account based solutions, particularly around multicurrency account based solutions, as that it is ultimately used constantly, particularly by businesses.

8:45 So that's far more recurring revenue and moving away from much more transactional. And what we're doing in terms of strategic delivery and what we have done, in Dubai, we've actually increased our commissions. So we now have a retail endorsement there. And ultimately, that allows us to do far more in The UAE and actually as a as a real USP there. We've we've developed onboarding processes and procedures for client verticals that we're after. We've rolled out system improvements. We have, as said in the the fundraise, we've started our application process now with the multi regulator, the the NFSA, and that is now in process.

9:38 And we'll ultimately continue to expand our team with the relevant experience that we require to run a compliant and operationally successful business. In terms of the platform side of things, we've made a number of enhancements and changes this year or last year, I should say, and continuing this year. We've redeveloped our client portal to modernize it to make sure that it's intuitive for our customers. We've also enhanced the product offering, so specific things like multilayer authorizations where bigger companies need multiple people to authorize, and that's very much bespoke on a company by company basis. And people can ultimately or or each company can set how they want certain transactions authorized and payments as well.

10:33 We've the we have a number of other sort of product features that we've done. In terms of internally, we have platform platform pricing flexibility. We've developed a forwards tool within the platform as well to allow customers to see drawdown, etcetera, very much around self-service. So in order to scale the business significantly, there needs to be an element of self-service, and we've really made good headway into that part of the user journey. So allow customers to self serve on the platform and do most of the stuff that they require independently. We've improved our processing payments times by over 60%, and we will continue to make headway. That's very much in terms of onboarding and payment processing is core KPIs for us, and we will continue to make headway in improving that.

11:35 In terms of the move away from more transactional business to to account based solutions, we've we've developed and hired in the right areas to make sure that we're acquiring the right types of customer. We've got we've got a much clearer focus now on our marketing, external communications, and actually in terms of customer acquisition. Whilst the partnership led model very much still works for this, We we've aligned that also with a more direct sales approach as well and very much around, you know, exhibition shows, etcetera, to to go and acquire customers that way. And we will continue to hire, and and the hiring strategy will continue in that vein in terms of expertise to to make sure that we have a good fit for our customer acquisition strategy.

12:34 Andrew, over to you for the financial highlights. Thank you, James. This this slide just shows a few of the the sort of core core KPIs. I've covered most of these in the in the highlights I mentioned earlier, but my overall summary here would be that this these KPIs reflect that that kind of that twenty twenty five being a year of investment for for FINSETA, you know, investing in our Dubai operation, investing in our CAS program, and investing in our central team as well. And so these KPIs reflect that general level of investment and additional expense that we've spent over the course of the year to build our business going forward. A bit of bit of a deeper dive into certain aspects of the financial reported.

13:19 So this this slide covers our our revenue and gives a bit more detail and flavor of of of the components of our revenue. So you can see that our our corporate mix has has increased significantly compared to the prior year with with corporates now representing 7,100,000 out of our 12,400,000 of of revenue over the course of the year or 57%. So that's that that marks a significant shift in that mix compared with 2024. The other main thing to draw out is the is is our Dubai operation. I'm reporting here that that our revenue was made up of 2,600,000, of of of Dubai sourced revenue, which which shows the, the importance of of of that that jurisdiction for our growth, going forward.

14:09 We've also seen some excellent growth in our alternative banking solutions initiatives as well. If I move on to just talk a bit about EBITDA, this just shows, the the the core components of our EBITDA, and I've I've, I've given a bit of a deeper dive into adjusted costs, which is a core component of that, on the next slide. You can see here how our costs have, have moved from 2024 to $20.25. We've got some key components here, staff costs and platform fees that have grown significantly over the course of the year, but this reflects what we expected to see over 2025, that investment in Dubai and setting up our offices in Dubai and the additional recruitment that we've done to deliver service out there. Our our CAS program, also is reflected in in in these numbers too, where we've incurred additional spend on having the central, expertise to to manage that staff program centrally and the platform fees, necessary to to deliver that that service to our customers.

15:20 So they're they're the key components of our admin expenses and how they've moved year on year. If I just move on to talk a little bit about our cash flow, and this compares compares our cash flow to our EBITDA and shows a strong conversion rate. Ultimately, the the core component of this this slide is is pulling out our our our noncash items. Our noncash items have increased compared to twenty twenty four, just reflecting the additional amortization and depreciation we've recorded during the year, reflecting the prior investment in our platform and our cards program. And then lastly, just a bit of further detail on our overall cash flow.

16:06 You can see in here that we continue, to to spend, money in investing in our platform, and over the course of 2025, we spent just under 1,100,000 investing in our platform, which, we show as an addition to to our to our fixed assets. So that's sort of key components of our financials, and I will now hand over back to James for a summary. So, yeah, in summary for around the business, we've continued revenue growth, albeit a lower rate than historically we've achieved. And that really reflects actually the change ultimately from a more consumer based business to a corporate based business in that transition, and we would expect growth rates to accelerate from here on in.

16:57 We do believe, and we have made significant strategic progress against our goals and everything we set out even two years ago that that we have achieved. We are still confident about full year 2026 and delivering share shareholder value in the short, medium, and long term. So, you know, this business is we operate in a highly regulated area, but we're we are extremely well covered from a from a regulatory point of view with licenses in in The UK and a U UK EMI regulated under the FCA in The in Dubai and in Canada.

17:48 So these licenses are not easy to get and not easy to maintain, and that gives us a real competitive edge in the coming years. Thank you. And I think we're gonna hand over to questions now. Thank you both for updating investors today. Could I please remind investors to submit your questions just by using the q and a tab situated on the right hand corner of your screen. And for your reference, a recording of today's presentation will be available on the Investor Meet company platform shortly after the meeting has ended. Guys, as you can see, we received a number of questions during today's presentation. James, if I could just hand back to you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Fantastic. Thank you. So I will read them out. And if it's appropriate for Andrew to answer, I'll hand over to Andrew, or I will answer the ones that feel appropriate for me.

18:43 First one, the share price has fallen quite badly. Do you believe that the market has priced it incorrectly? As at some point a few years back, it was 40 plus p. Genuinely, I think it's massively mispriced. Given given when the, you know, the revenue was was half of what it is today, that's when it was 40 p. You know, we had we're nowhere near the capabilities, the the the regulated licenses. We're a very, very different business. So I I absolutely, I think it's completely mispriced. Next question. I wanted to share three questions I would like to address.

19:29 One, cash position and path to profitability. The business ended full year 2025 with 1,500,000 cash, raised another 9,000,000 in April, and generated 4,000,000 operating cash on twelve point four. With OpEx having grown 41% year on year, could you provide the revenue level at which the business becomes cash generative and what the current monthly cash burn rate is? Andrew. Thank you. There's lots of detail in that question and some which I probably can't disclose in this forum. Ultimately, we have said previously that we expect to to start becoming cash generative in the second half of this year, and we still expect that to to to to happen.

20:19 And and so we should see when our full year '26 announcement that that that's what we expect at the moment. Next question. On the corporate carve, lessons and implications. The corporate carve was impaired within twelve months of launch with operational challenge cited and a potential repayment to a obligation to a partner. What went wrong? What does assessing how best to provide this service mean in terms of decision timeline and how should shareholders think about execution execution risk on other new initiatives in light of this experience. So the corporate card was always launched as an additional payment rail for certain customers, which, by the way, they are still using that product.

21:07 We felt it was conservative and the right thing to do to impair simply because we when we launched the product, we decided actually to do the lowest cost route to market and therefore not build it internally. In hindsight, you know, lessons we ask about lessons learned. Ultimately, the probably the safest thing to do is ultimately do it ourselves. We We have have had we have had issues with a a one particular partner, and it's not it's been far from plain sailing. We are still considering our options on this. One of the options, obviously, on a longer term basis is to to to to re to effectively build it ourselves and take what we've invested and take part most of that and then just rebuild the the the internal bit ourselves and make make it effectively effectively part of the multicurrency account.

22:10 Ultimately, we need to to decide you know, we we have a number of things on our project plan that we're currently working on. And, obviously, you know, we have a certain amount of resource that we can do. So, ultimately, we will prioritize from a customer point of view what our customers want and, ultimately, what provides the best return to the business. But as yet, we've not fully decided on that. What is the confidence of company achieving growth in revenue and being cash flow positive this year? And secondly, what is the recurring or repeatable revenue from corporate customers?

23:00 One for you, Andrew. Yeah. In terms of the the the the confidence in us achieving our rev revenue growth and and being cash flow positive, yeah, we still expect, ultimately, for for the full year '26 to have delivered revenue in line with as as previously reported, and and do expect it to to turn to to being cash flow positive in in the second half of the year. So we're still sat here expecting that at this stage. In terms of the the recurring or repeatable revenue from corporate customers, to be honest with you, that's that's something we are looking to, I guess, explore further in terms of how we how we monitor that. We do expect ultimately that, you know, with with the focus on corporate customers, that we will see more repeat business.

23:55 We will see a growth in our active number of customers, Whereas in in in previous years, active customers, they'll come in one end and fall out the other end, you know, because they're typically based on, you know, high net worth individuals performing one off transactions. And we define an active customer as being one that's transactioned in the last twelve months. So we do expect to see that increase coming through as we focus more on corporate customers. A similar sort of question but more corporate customers carry lower margins than high net worth clients. How do you balance growth in corporate volumes with protecting overall profitability?

24:42 I mean, ultimately, yes, there there is definitely a margin impact. However, it will be marginal. You know, the the we we still offer a value add service here, so it's not totally digital and therefore price based. And therefore, we we do believe we can protect our margin at above 60% gross margin. So absolutely right. There is there is a small impact, but we don't believe it's significant. Sort of similar question about does does confidence extend to meeting revenue expectations for full year '26? I think Andrew sort of answered that.

25:30 The answer is yes. Do you anticipate any further funding need to execute the current strategy or plan? Ultimately, as a payments business, financial services business even, you know, money is always required particularly around liquidity, etcetera. We we believe we can execute the plan. Having said that, you know, would would we welcome funds? Then, yes, we would do. So there's sort of two answers to that, but but, ultimately, it's a decision that we will have to to make, you know, making sure that we're we're we're operating and and managing the strategic direction of the business and and what the business requires in order to make sure that we achieve our our strategic goals.

26:39 Will revenue profile now be now corporate led would see less seasonality in revenue between h '1 and h two? Very likely, yes, as it's far more repeat business. So as we transition from consumer to corporate, we would expect there to be far less seasonality. Is your Dubai revenue largely entirely from business clients? Also, are there clients in The UK you were working with in Dubai and vice versa? Majority is, yes, business clients. 30% of the revenue there is is is property transactions. So 30% of the the Dubai revenue is is property transactions.

27:25 But largely, the the strategic direction, obviously, of the covers Dubai across all regulated licenses and is very much focused on business clients there as well. Yes. There are clients in The UK that are also in Dubai and vice versa. So we do get a lot of cross pollination in terms of working with both jurisdictions. And many companies actually are dual duly have operational centers in in both in Dubai and in The UK. So, you know, having having a multicurrency account servicing both is very, very convenient for them. And by the way, it's very difficult to open accounts, not only in The UK, but but in Dubai specifically for for businesses.

28:18 I think that is the end of the questions. Perfect. Thank you both for answering those questions from investors today. Before we ask investors to share their feedback, which you know is particularly important to the company, James, could I please just ask you for some closing comments? Yes. Absolutely. Thank you. So in terms of sort of addressing share price performance, ultimately, we believe the business is significantly undervalued at this point. The the strategy that we're executing is working. We are seeing revenue growth. We expect this to accelerate over the next year, two years. We believe we found a significant niche with massive opportunity that we're able to serve. We have the product.

29:04 It's the right market fit. Ultimately, there's nothing really further to be developed there, so we've done all the development required. We have the licenses required. And we believe, as a business, we are set for huge success over the coming years. Is there anything else, Andrew, you'd probably add as your sort of new boy, I guess, with new eyes? No. I don't think so. I think I think we we expect '26 into '27 to, you know, financial performance to to ultimately reflect the the the hard work that was that was entered into over the course of '24 and '25 in terms of the platform, getting the right people, expanding our geographical, footprint. All those things we expect to to start to really, really sort of pay pay dividends over the course of, the latter half of 2016 to '27.

29:54 Perfect. Thank you, James and Andrew, once again for your presentation this morning. I please ask investors not to close this session as you now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team of FINSETA PLC, we would like to thank you for attending today's presentation, and good morning to you all.