TruFin (LSE:TRU) — Final results for the year ended 31 December 2025

0:00 Good morning, and welcome to the TRUFIN PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to James Vanderberg, CEO. Good morning, sir.

0:31 Hello, lady. Thank you very much, and thank you all for attending today. So I'm James Vandenberg. I'm the CEO of TRUFIN, and next to me is James Hussey, the CFO of TRUFIN. So thank you all for taking the time to to listen to us today. So so the plan we have is that I'm gonna go I'm gonna give you a short introduction to the group, and then I'm going to hand over to James. And James is going to go through the full year numbers in a bit more detail, and I'm going to then present on the key achievements for TRUFIN during 2025, where we're heading most importantly, and we're going to leave plenty of time for questions. So TRUFIN.

1:18 So as you know, TRUFIN is a holding company. We are a majority shareholder in three businesses, Oxygen, Starga, and Playstack. I'm going to go into more detail on each company later. For those of you who don't know us, a very quick overview. Oxygen is an early payments business. It also offers data services to county councils and local authorities and their suppliers in The UK. It's based in Birmingham, and it's run by Vicky Sloan. Certargo offers credit control tools and lending software. It's based in London and is run by Sinead McHale. And PlayStack is a games publisher and developer based in The UK and also with quite a significant presence in The US, and that's run by Harvey Elliott.

2:10 So today, we're focused on the full year. So what does this graph show you? This shows TRUFIN's full year results split into the first half and the second half. First half is the dark green block at the bottom, and the second half is the sort of chevron section at the top. And when combined, obviously, that represents the full year. So as many of you remember, due to the release of the sort of the sensation, which is Ballotro, we had an exceptional 2024, as you can see. We achieved revenue of £55,000,000. We grew over 200%. So 2024 was clearly going be a very tough comp for us to beat. And understandably, there were many doubting Thomases who didn't expect us to grow during 2025, but as you can see, we did.

3:00 So we grew revenues to 65,900,000. That's an increase of 20%. And we also as a result of that, we had multiple upgrades during the year, and we were thrilled with our performance. So what does this mean, or what did this mean for the bottom line? So this slide shows the group EBITDA. As you can see, EBITDA in 2024 was 7,600,000. That grew last year to 12,600,000. That's a 66% increase. So twenty percent increase in revenue, but a 66% increase in EBITDA. So what does that tell you about TRUFIN? Well, it highlights what we've always said, that there is significant operational leverage within TRUFIN.

3:47 And what I mean by that, as revenues continue to grow in percentage terms, EBITDA will grow disproportionately faster than revenue. So as revenues grew 20%, our EBITDA grew 66%. So that's the operational leverage within the business. And obviously, as a business, that's an incredible position to be in. So again, thrilled with that performance. So that brings us to twenty twenty six this year. So we are currently bang in line with our own internal budget. Revenue for the first two months were in excess of £9,000,000. For for full transparency, again, due to the remarkable success of Ballotro last year, it won multiple awards and also won game of the year at the end of twenty twenty four.

4:40 And so if you look at the same period last year as the first two months this year, our revenues were actually $15,400,000 whereas this year, they're $9,000,000 So again, for the eagle eyed once amongst you, you'll have noted that. But I want to reiterate, we are very happy with our current run rate and revenue run rate, and it's bang in line with our own internal forecasts. So now I'm going to hand over to James, who's going to go through the full year results in a bit more detail. James. Thank you, James. As James said, yes, I'm going to reflect on a few of the financial highlights for the year. 2025 was another fantastic year with the momentum created in 2024 continuing.

5:29 Revenue, the full year revenue was £65,900,000 20% growth or £11,000,000 growth on 2024. Where did that growth come from? Oxygen reported £1,400,000 worth of growth to its top line to report 9,100,000, incredibly predictable and very much anticipated that sort of level of growth. PlayStack, despite 2024 being an incredible year, managed to build on 2024, and its revenues grew 10,600,000 to report 55,200,000 for the full year. So another fantastic performance by by PlayStack. So Targo's revenues fell £1,200,000 in twenty five over '24. A couple of factors driving that has has been well reported. In '24, the tier one bank contract was lost impacting ongoing revenues.

6:29 And in addition, as has been said, Certargo has made the decision to stop lending off its own balance sheet. And therefore, income reported in '24 was very much reduced in '25. So those two factors

6:45 dropping the revenue for Certargo. So overall, revenue, a fantastic performance. What does that mean in terms of the bottom line? So we have an adjusted profit for the year of 8,400,000. Just to just to confirm what that means, adjusted, that's taking the profit before tax on the P and L and adding back the impact of share based payments, which is of the order of £800,000. But the adjusted PBT for the year was 8,400,000 as compared to £900,000 in '24. Not on this slide, but James mentioned it previously, the adjusted EBITDA number was £12,600,000 a £5,000,000 increase on 2024.

7:32 And to follow on from the operational leverage point that James mentioned, our net revenue, so revenue less direct costs, that increased by 5,800,000. And all and because the cost base was very consistent with the prior year, of that increase of 5,800,000, it resulted in an increase in the EBITDA line of 5,000,000. So you can see there's a very strong flow through from that increase in the net revenue. That number is also despite that impressive flow through, it's also negatively impacted by the impairment charge that we have on the balance sheet relating to a loan within PlayStack. That said, it's still fantastic growth of the EBITDA by comparison to the revenue and the net revenue.

8:19 The other item on the p and l to draw to your attention is the tax credits in the year, a very material number. So the profit after tax benefiting by that credit. And that is due to us increasing the level of deferred tax asset that we are recognizing on the balance sheet. It now stands at 7,000,000 and that asset, it reflects the increasing confidence we have within primarily Oxygen and Playstack to continue to be profitable and able to utilize the accumulated losses that both companies has. The final highlight to draw to your attention is cash. We leave 2025 with a cash balance of £12,400,000 a decline on the previous year of 2,700,000 As you know, we successfully completed two share buybacks in the year, totaling £8,000,000.

9:18 And such is the cash balance going into 2026 that we are we have announced we're in the middle of a further 6,000,000 share buyback. So I think 2025, another year of fantastic performance, increased revenue, increased profitability, increased cash generation, and the group is very much in in good health and we entered 2026 with much optimism. And you can see a few of the points there. Current trading prospects, Playstack's catalogue continued to perform well. Oxygen continuing to grow with benefits operationally and beverage feeding through in its its p and l. And Citago has seen an encouraging start to to '26.

10:04 And just to say actually, touch on Sotago. Sotago, as we have said previously, had significant cost reduction throughout '25 such that despite the revenue drop, its bottom line loss was significantly reduced on the prior year. The business is now reset, and it looks to 2026 with optimism to grow the top line and to achieve profitability and cash generation. Great. Thanks, James. Thank you. So Oxygen. So Oxygen, as I said earlier, is an early payments business and data business supplying local authorities and their suppliers, and we are extremely fortunate to own this business. The main reasons the three main reasons I say that are, one, firstly, everyone everyone likes to be number one in life, and we are very much number one in this space. So we have over 65 clients.

11:01 We're growing that by, on average, six clients a year. The number two in the early payment space has one client. So we are, by a country mile, number one. And as a result, we accrue all the benefits of being number one. Secondly, the contracts we have with our clients are on average five years in duration, so we've got incredible visibility of revenues. And thirdly, the barriers to entry in early payment are extraordinarily high. So just as by by way of example, let's imagine you wanna set up a rival early payments business. So on average, it takes us about four years to win a client, and that's us now have been number one with over 65 clients. It took us well over four years to win our first clients. So you're setting up an arrival to Oxygen. You fancy your chances, so you try and win a council. Let's assume you can win a council within four years, which would be an extraordinary achievement, but let's say you do. You're not gonna make any meaningful revenue from that client for another two years. So meaningful revenue generation from your first client won't be for another two years.

12:09 So after six years, you have one client generating some money, but you'll still you'll still be heavily loss making as a business. To get to profitability, you need about 30 clients. So let's assume, again, you win as many clients as Oxygen does on an average year, which is six clients a year. Let let why don't we assume you're better at winning clients? So let's assume you can win 10 clients a year. So to win 30 clients in total, you need to wait another three years to get to the point where your business is profitable. So firstly, four years to win the first client, two years to make any meaningful revenue, another three years to win to get to 30 clients. So you're nine we're now nine years later, and you may have a profitable business.

12:55 But that's working on the basis that you don't have a serious competitor, which we didn't when we started, but you do. You have oxygen as your competitor. So you'd be absolutely mad to start, and anyone would be mad to start an early payments business. So to summarize, we a massive market opportunity. We've got five year contracts and almost insurmountable barriers to entry. If you look at the chart on the bottom left, this shows our EBITDA, which is really starting to scale. We said it would, and it is. So EBITDA has gone from went from 2,300,000 in 2024 to 3,800,000 in 2025, so that's up 67%. And that is despite the procurement act. So this was a once in a generational event that disrupted the market. And to remind you to remind well, to remind those you know and those who are listening in on TRUFIN for the first time, the procurement act to summarize it, instead of multiple overlapping regulations, the procurement act created one unified framework for public procurement activity.

14:02 So it puts greater weight on social value, innovation, SMEs, and resilience, which all sounds great. But what does that mean in practice for our clients, the local authorities who are purchasing things and tendering? Well, it means, really, more digital notices, which are events that they have things they have to do, they have to put through a new central procurement platform. There's more visibility of those contracts, more and more visibility of the performance of those contracts. So in in in very practical terms, the old regime pre the procurement act meant that, on average, there were four notices, which is four actions, that our clients had to do to procure something. In the new regime post the procurement act,

14:48 on average, there are 12 actions or events that our clients have to do in order to do the same procurement event. So in short, there's three times more work for our clients to procure something now than pre the procurement act. No one likes to change their habits. I certainly don't. And I can tell you, and you can see from this chart, that our clients don't either. So this chart basically shows human nature. So this is the thirty day rolling average number of tenders by volume across England since January 2024. So the procurement act came into force last year on February 24, and you can see the spike in this chart where that happened. Ahead of the act, predicting this more work and uncertainty and new ways of working, tender volume tender volumes rose dramatically.

15:44 And because procurement officers pulled forward their tenders, post the act, much of the tenders that had been enacted during the spike in the in the period before the procurement act, and they were no longer needed or they were effectively pulled forward. So and and our clients had to get to grips with the new way of working, so the tender volumes fell off a cliff. You can see that happening. And now we're we're reverting to a more normal level of activity. But it's still worth pointing out that in January this year, at the low point, we we were the tender volumes were still 27% lower than they were in the previous year, So still sort of still significantly lower, but that is a significant improvement from the summer. So you can see June, July time last year in 2025, the procurement volumes were well over 60% lower than they were in the prior year. So there's there's been a there's been a returning to normal, but we're not there yet.

16:49 But we are returning some form of normality. But, again, I want to reiterate, despite this enormous headwind, despite the tender volumes declining and tender volumes drive our revenues, the EBITDA at auction grew by 67%. So a great achievement from Vicky and her team.

17:09 And if there's one chart that shows why auction is such a good business, this is it. This chart shows you that if we don't win another client ever again, then 90% of the next five years early payment revenues are in the bag. So we've got because that's because due to the the duration of of our contracts, which are on average five years. So we've got incredible revenue visibility. Our clients are buying more products from us than ever before. Currently, 60 of our clients buy two or more products from us, and more than 25% buy three or more products from us. And clients are staying with us for longer. So last year, we had seven early payment clients come contracts come up for renewal.

17:57 100 of those clients renewed for a further five years or extended their contracts. In 2026 of this year alone, we've had five more contracts come up for renewal. And again, all four of them, so 100%, have renewed or extended their contracts. So it shows you sort of the incredible visibility we have on revenue in this business.

18:24 So Certago, as you know, we had to make some significant headcount reductions at Certargo. That that was forced upon us by the termination of the tier one bank contract. We acted very swiftly. The headcount was reduced by 76%. And, yeah, so we that was enacted very swiftly post the loss of that contract. And what about revenues? Well, as James mentioned earlier, due to the loss of the bank contract, the tier one bank contract, and our decision to stop all balance sheet lending, revenues fell by 50% to £1,200,000. But as James again mentioned earlier, the net loss declined by 46% to £2,400,000.

19:09 It was so the loss in 2024 was 4.5, and in 2025 was 2.4 despite a revenue decline. So with the right sized cost base, how do we get to top line growth? That's the obvious question. And we are doing that by focusing on what is working. We have we have some phenomenal partners and clients. We renewed a contract with our largest partner for a further three years, which we had announced. And here, you can see the results of our focus. So this graph shows the value of invoices chased by Certago's credit control tools. That's the the gray bar chart. And then the green line chart is the number of active subscribers for our software.

20:02 So it looks a little bit like the crude oil price at the moment. It's grown a 120 the number of subscribers has grown a 120% in the last twelve months and actually has grown 66% in the last two months alone. So it shows what can be done with focus. Sinead and her team have clearly weathered the storm coming out the other side. And as you can see, there's definitely green shoots here.

20:30 So PlayStack. Another another blockbuster year for PlayStack. The main things to note from last year are Ballotro and Abiotic Factor continue to perform. In fact, they they exceeded our expectations. We spent much and Harvey and his team spent much of the the second half last year securing this platform contract that we announced. We actually only we only signed it in January. We we expect to sign it in December. We didn't. We we signed it in January. So we're absolutely thrilled by that. I mean, you'll hear more from us later this year about that contract. And we also focused, obviously, on major game launches for 2026 this year. So why are we why are we upbeat about 2026?

21:15 So two and a half years ago, we raised £7,000,000 from UR shelters to fund Mortal Shell two, and this is the year that investment is gonna pay off. So we're currently months away from its launch. We haven't formally come out with a a day for the launch, but we will during April, you hear you will hear when the launch date for Mortal Shell two is. It's currently a hundred and eighty eighth on the Steam's wish list, so that means it's a hundred and eighty eighth most wish most wishlisted game in the world today. And we've got an awful lot of PR and marketing activities between now and the launch of that game, which will push that push push it further up in the rankings. But before Mortal Shell two, we also have the Recoyn launch.

22:05 I don't wanna get ahead of ourselves, but but players are players of the demo are liking the dopamine hit. And you get from Rakoin to the same sort of hit you get from Valatro, so let's see let's see how that goes. That's going to be released at the end of this month. So it'll yeah. So it'll be interesting to see how that goes. And then this slide shows summarizes the financial performance of all the investments we've made in the games

22:34 previously. So the graphs on the top left, just to remind people, the graphs on the top left, where are the revenue we generate from games. These are some example games that we've launched. So you can see the green line shows our profit from a game. The little purple dot shows the investment we've made in the game. So when the green line is above the purple dot, we are making money. So the vast majority of the time, we make money on the games we launch. And then in the bottom left, you can see the return on invested capital and the IRR of our game launches are still well above 300180%. So incredible financial performance from our game launches.

23:25 Right. So so to summarize, excellent results last year. We generated enough cash to fund two buybacks, two £4,000,000 buybacks, and we've initiated a new £6,000,000 buyback this year. We're very focused. We're focused on scaling PLC stack, so doing more of the same, driving revenue and EBITDA growth at Oxygen. And having reset to Targo, we're focused on where we are winning. We've always had a very long term mindset, but sitting alongside that, we're also fully aware that our job is to realize value for shareholders, and that's exactly what we intend on doing in the coming months and years. So, Lily, with that, I think we are now ready to go to questions.

24:15 That's great. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received number of questions throughout today's presentation. Please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Yeah. Great. Thanks. So thanks, Lee. So for both squinting, it's Chris and And it's the font is quite small for the question. So firstly from George. How do you balance buybacks versus M and A given given there's no superior acquisition opportunities.

25:09 I think, really, what we laid out, I think, relatively clearly in our capital allocation policy is that we do prioritize internal growth first. We look at all the different opportunities we have within the business if we have excess capital. We make sure we've got a good buffer so that we're never coming back to you to ask for more capital. And then we do look at external M and A opportunities, but obviously, are significant risks attached to M and A. But we have made small acquisitions in the past, and we will we continue to look at M and A opportunities. And then should there be excess capital post that, then we look at we balance the risks of M and A versus the low risk we have when it comes to buying back shares. We know more about our businesses than anywhere else on the planet.

25:57 So if the same sort of return exists from buying shares to M and A, we're obviously going to be buying back shares every day. But clearly, we do look at multiple different acquisition opportunities, and we will continue to do so. Vishal. Hello, Vishal. Please, can you talk more about Certaga's pipeline? 10020% growth in subscribers. Interesting. But will pipeline conversion need investment in staff platform, or will this largely drop through cash profitability? That's a great question. So in terms of those software sales, that that is very much does fall through to the bottom line, so the growth from there. In terms of other lending software opportunities that we are building the pipeline of those opportunities, we are very focused on every contract, making sure that much of that falls through to the bottom line.

26:56 I'm not saying that we won't have to increase the headcount at Citago in order if if we have an enormous much of the pipeline comes through and contracts come through as a result. So I'm not saying we won't increase staff platform, but we at TRUFIN have committed a certain amount of money to Citago, and we're happy with the commitment we've made. And we feel that the business can get to profitability with the investment we've already made. So hopefully that goes some way to answering that question, Vishal. Are you looking to invest in further companies? From Steven, that is not currently part of the in terms of are we looking to invest in further companies outside the three platforms we already have? No. The answer is not currently.

27:46 But obviously, we do look at we have looked at many different other opportunities, but we are focused on making sure we return capital to shareholders. Vishal, again, how does the how do you get back to the top so quickly? How does the anticipation of Mortal Shell two compare to the Mortal Shell one? Also, will there be a Ballotry two? If there's a Ballotry two, then players globally would be very excited, and that is not currently we currently haven't announced anything around that. And in terms of Mortal Shell two, Mortal Shell two is currently tracking ahead of where Mortal Shell one was. Because remember, Mortal Shell one, when it launched, was a completely unknown title, so no one even heard of that game.

28:35 It was a new completely brand new IP. Mortal Shell two is not a brand new IP. It's very much a sequel to Mortal Shell one. So, know, you would expect Mortal Shell two to have to have to have more interest than Mortal Shell one, which it certainly does at the moment. Can you disclose why your hit ratio has fallen from 90% as in the prior presentation to 85 today? Great spot from Joe. Is this due to new games yet to recoup investment and market share? That's exactly right. So one of the games you launched at the end of last year hasn't yet recouped. If we have this presentation later this year, which we will at the interims, we very much expect that to be back to 90%.

29:21 But obviously, there's a if we launched a game yesterday, it's unlikely to recoup its full investment within a day. So don't read anything dramatic into that at all. We're absolutely thrilled with the performance of our games. In fact, we did talk about just saying a hit ratio of above 50% so that the fluctuations at the top don't give anyone heart palpitations, but we'll keep being completely transparent with shareholders. But yes, nothing to worry about there, Joe, at all. So, Joe, again, a question on Sitago breakeven on its leaner cost base. We've said it's gonna we're expecting it to breakeven during 2026, and we very much expect that to happen.

30:18 The proceeds of future Playstack sale. Johannes asked what will the capital allocation approach be in the proceeds of future Playstack sale. That is gonna be up to the board and shareholders, Johannes. And and what is the threshold for continued share buybacks versus reinvesting that capital into new IP for PlayStack or expanding Oxygen's SaaS offering? So from Joe. So, Joe, we look at all the opportunities that are that are open to us at Oxygen, Citago, and PlayStack. And if the opportunities mean we will get a higher return on our invested capital, then we will buy BuyMac shares. We will invest in those opportunities. We are not shy about investing. We are going to spend over £9,000,000 in future game launches in PlayStack this year.

31:14 So if we didn't spend any money on the future of PlayStack, we'd have £9,000,000 more money. So you see that we're making significant investments into PlayStack. We're also yes, oxygen's making money and dividend, yes, more money every year, which is amazing. But we are making sure that we also invest in oxygen, invest in the opportunities that we have within oxygen. And those will remain our top priority because building long term value is how you as shareholders will get long term value for your holding. Would you consider releveraging the balance sheet to accelerate returns from Stephen? Okay. A bit racy for us, I think, Steven. It's it's we we have looked obviously looked at that sort of thing, but right now, we don't feel that would be that would be appropriate.

32:07 How diversified is the 2026 pipeline revenue? I imagine you mean yes. Around title, sir. I imagine from Steven. I imagine you mean a play stack. So what we we've said previously, and we reiterate that around 50% of 2026 revenues are expected to come from back catalog at PlayStack. So from that, you can see what we expect the game launch this year. And obviously, Mortal Shock two is the biggest launch with with the biggest release this year. You can expect you can see from that what we expect from the other eight games that we're launching this year. And that's alright. So Alex asked what the trading in line this year, what are the key swing factors for upside versus downside?

32:54 So the key swing factors will be the game launches at PlayStack. We've got a very good handle and very good visibility at Oxygen. Similarly, at Sotago, we can see the direction of travel there. So it will be the swing facts will be gained new, and we know, give or take, what the back catalog at PlayStat will do. So the swing facts will be the new game launches. Given the PlayStack from George s, given that PlayStack dominates revenue, do you mitigate concentration risk of the group? Well, you know what, George? It's a great question. But in any portfolio, when something's doing exceptionally well, then it's going to become a larger portion of your TRUFIN PLC will become a larger portion of your investment portfolio as the shares have got. And so our job is to make sure we remain focused and disciplined at a group level.

34:00 And if PlayStack ends up being a bigger portion of revenues and profits, then so be it. But our job is to make sure we're not worried about concentration risk. We're worried about making sure we do the best job that we can with each of the businesses that we have for you, the shareholders. And then, Joe, can you elaborate on the marketing approach for new game launches, which I'm targeting, is the approach to more Shell slightly different lay rather than indie titled? What we don't wanna do, Joe, is steal any thunder from from the from we know exactly what's gonna happen in terms of marketing beats, etcetera, but we're not we won't share them here. We'll let we'll let PlayStack deliver.

34:49 You'll you'll you'll be seeing we've clearly explored, and our team our are exceptional when it comes to marketing and promoting games. So there's obviously going to be some new interesting surprises for Mortal Shard two given the scale of it, but we won't steal the thunder of PlayStack and let you know that. I apologize. But you'll see the marketing beats in the coming months. Bruce G. Do local authority elections impact tendering activity if council majorities change? Hi, Bruce. Whenever there's elections, whether it's nationally or locally, politicians are focused on keeping their jobs.

35:40 That's their main focus. And so, yes, they they they do you know, focus is taking away not necessarily from tendering activities, but from making large decisions related to things such as whether to onboard oxygen. We've had to face that through general elections, local elections in the past, so our numbers assume, you know, relative levels of muted decision making. But on the whole, the decision makers when it comes to tendering activity are not the politicians. They are the procurement officers within council. So if you need potholes refilled, that decision has to be made, whether it's labor, the greens, or reform.

36:28 So on the whole, it doesn't help, but it's relatively muted, the impact on us. I I say that. You know, maybe we have some some event that you've never seen before in the greens when, you know, every single council and who knows? But as as it stands today, we've got a lot of data on what happens during elections both nationally and locally, and we're not we're not worried about that. So I think we've managed to exhaust all the questions. That's great. Thank you for answering all those questions you have from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet company platform. Just before redirecting investors to provide you their feedback, which I know is particularly important to the company, James, could I please just ask you for a few closing comments?

37:17 Yes. Thanks. Thanks, Lily. I want to thank you all for attending this meeting. Thank you all for those of you who are TRUFIN PLC trusting your capital with us. We are, as James said, we are in a great place. We're full of optimism for 2026 and beyond. Thank you again, and look forward to seeing you hopefully at our interims or maybe before. That's great. Thank you for updating investors today. Now please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of TRUFIN PLC, we'd like to thank you for attending today's presentation, and good morning to you all.