TruFin (LSE:TRU) — Interim Results for the six months ended 30 June 2026

0:00 Good morning. Welcome to the TRUFIN PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions and inquiries could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please just simply type in your questions and press end. Before we begin, I'd like to make the following poll. And I'd like to hand you over to James Vandenberg, CEO. Good morning, sir. Good morning, Charlie. Thank you for hosting us today. So I'm James Van den Berg. I'm the CEO of TRUFIN, and with me today is James Hussey, the CFO of TRUFIN. Thank you all. Thank you for for joining us. So as you all know, or hopefully, you all know, we are a holding company. We've got two businesses, majority stakes in two businesses, Oxygen and Citago.

0:49 And we're gonna go into both of those in more detail later. And we also have 25, approximately £25,000,000 of cash. So just to put that in perspective, that equates to 46.4 p per share. So that's about half the current market cap. So we've got about half the current market cap in cash, and then we have majority stakes in Oxygen and Targo. So how do we get this cash? Well, we sold PlayStack in June this year for a £125,000,000. And what do we do with the proceeds? Well, we did exactly what we said we would do. We returned the money to shareholders. So we returned it via a buyback and via a dividend. We bought back 40,600,000 shares of TRUFIN shares at £1.40.

1:37 And just to sort of step back a little bit, that means over the last eighteen months, we've bought back in total from internally generated proceeds and from our proceeds from the place I sell. We've bought back 52,600,000 shares. So we now have 53,900,000 shares, and we bought top and we priced this moment in time. We bought back 52,600,000 shares. So over the last eighteen months, we've bought back 49.6% of the company. So that's about half the company, just under half the company we bought back over the last eighteen months. We also have given back a £22,500,000 worth of dividends, which equates to 43 p a share. So we've done what we said we were gonna do. We've returned money to shareholders, which we're very proud about.

2:28 So what now? Well, one of our children has flown the nest in PlayStack. So we are now gonna present on the in in terms of the first half year performance for this year, excluding everything is excluding PlayStack. So what does this chart show? This chart shows the first half year performance, revenue performance for Citago and Oxygen. Again, top down, five years ago, we had revenue in the first half in 2021 of 2,100,000. In this first half, it was 5,900,000. So that's 23% compound annual growth rate, something most companies will be very pleased with. Specifically, in this first half, oxygen grew by 12% and Citago grew by 41%.

3:20 And more importantly, or as importantly, we've now hit an enormous milestone. This is for TRUFIN PLC, h one profitability. So this first half this year was the first half that TRUFIN PLC was EBITDA profitable. And we're very much expecting and are going to aim to maintain that level of sorry, profitability and increasing profitability over time. So what about current trading? So for the first two months of this year, so the first two months of the second half, July and August, we recorded revenues unaudited in excess of $2,100,000 So that's 28% growth year over year. So again, I think worth just noting in previous slide, first half of this year, we grew 11% in the first half.

4:13 In the first two months of this year, we've grown 28%. So a bit of an acceleration there. Not saying it's gonna continue, but it's very pleasing start to the second half. Right, James. I'm just going to hand this hand over to James now, our CFO, who's going to go through the numbers in a bit more detail. Thank you, James, and good morning, everyone. As James said, these numbers here that you see on this slide, relate to continuing operations. So the performance of the group that's left post the the the PlayStack disposal. Obviously, the first half was very much dominated by by the selling of of PlayStack. But these numbers now, I'd say, are continuing operations.

4:59 What what is left? So for the first half of twenty twenty six, the the total revenue was 5,900,000 as compared to 5,300,000 for the first half of last year. And if you drop down to the second bullet point, you can see that of that revenue, Sutarga makes up a million pounds and it's grown by 41%. Actually, that figure possibly is a little bit misleading in that the h one figure for 2025 for Citago of around £700,000 for last year included in excess of £200,000 of interest income. The as you may remember, Citago at that point was lending off its own balance sheet, and there was there were there was interest income included last year. Now since since that point, the the loan book has been fully wound down. And so on a like for like basis, Sitaga has gone from 500,000 of revenue last year to 1,000,000. So in effect, it's it's doubled its performance, which is which has been fantastic.

6:03 And just finishing off on the second second bullet point, Sitago, as it said it would do, it it achieved EBITDA profitability in June. And and now we are fully forecasting EBITDA profitability for the full year for for Sitago. So it's been an exceptional performance and a turnaround, really. Significant change in the cost base. And indeed, the increase in the revenue of of £300,000 year on year has resulted in an EBITDA improvement in excess of that, such as being the cost management within Citago, and they they should be congratulated on our performance. It's been it's been an exception. The other business that we have, obviously, oxygen, incredibly predictable, grew 11% year on year with the revenues for the first half just under just under 5,000,000.

6:56 And great operational leverage as ever with a with a good proportion of those increased revenues feeding through to EBITDA and and PBT. So predictable, but nonetheless, still exceptional performance by by by oxygen. And just in aggregate, if you look at the the the top three bullet points there, you can see that a 600,000 improvement in in revenue has resulted in a 700,000 improvement in EBITDA and an over £1,000,000 improvement in in adjusted PBT. So very good flow flow through of the improved revenues in in the p and l. And the final number, obviously, the the the cash figure at the half year of over 113,000,000, which includes the, obviously, the proceeds from the the PlayStack disposal.

7:47 Following the the half year, obviously, we've we've returned we've made a dividend payment and completed the tender offer such that that figure is now significantly dropped, as James pointed out on the very first slide, which said the cash was sort of the order of $25,000,000 So a very good first half with the two businesses that we have left, exceeding performing to expectation and in the case of Citago exceeding expectation. Thanks, James. And I just want to pull out one thing from this slide, which James has talked about. But I think, again, on Citago, we said in Citago previously, we've said Citago would be EBITDA profitable in June this year, and it was. In fact, it was EBITDA profitable for the first half, and now we're saying it's going be EBITDA profitable ahead of schedule for the full year this year. So I just want to reiterate my congratulations to Sinead and her team for achieving that very, very important milestone.

8:47 So oxygen, a fabulous business. Two things I wanna I wanna point out. Firstly, in a world of AI, we think, and I think everyone is increasingly beginning to become aware that distribution is king. Distribution, you can it's all very well creating a free product, but if you can't distribute it, it's there's no point creating it. So distribution is becoming incredibly important, increasingly important. And a few years ago, we one of our key missions, key key KPIs for for Oxygen was demonstrating the distribution we knew we had, the distribution capability we knew we had within Oxygen. So this is distributing products into our key client base, is local authorities and councils in The UK.

9:35 And so one of the ways of doing that is to have more products and and selling those products into our client base. A number of years ago a number of years ago, none of our early payment clients bought more than one product from early payment. And now, and you can see in the second bullet point, more than 65% of our early payment clients buy two or more products from Oxygen. Last year, in the first half, it was 53%. So an enormous difference. And this, we believe, this is one of the key USPs for oxygen. It's all very well, and by the it's a fabulous business. We've got a fabulous growing cash generative business that dividends back to us and still grow. It's it's a wonderful business. Everyone anyone would want to own this business, but we feel the distribution of oxygen is one of the its key its keys values and assets.

10:26 And it's wonderful to see that now more than 65% of our early payment clients buy two or more products, demonstrating our ability to sell. And the second thing I want to point out is on the EBITDA graph at the bottom. So in 2024, the full year EBITDA was $2,300,000 In '20 in the first half this year, it was 2,100,000 So it was almost as much EBITDA in the first half of this year as it was in the full year 2024, which which I think is just a nice thing to be able to point out. This graph, you might remember, certainly anyone who's been looking at TRUFIN for the last twelve months, a bit longer has has has seen. So this shows the tender volumes, thirty day average the rolling average tender volumes in The UK for our client base, excluding Greater London because that distorts things. So if you may you may remember that in in February 2025, the procurement act came into force, and that made it, can I phrase it, considering it was considering more governance and cumbersome to acquire products post the procurement act?

11:41 So as a result, councils and local authorities prepurchased product, and that it dragged forward a lot of the purchases for 2025. So in January, February, just ahead of the procurement act, you can see the big spike in in volumes. Post the tender, the the Procurement Act coming in force, all that pull forward of of supply of purchases resulted in a bit of a vacuum. And so tender volumes plummeted. And it stayed they stayed it was very subdued because there was a big pull through of activity in January and February. And it remained subdued for quite a while. We said at the time, we expected it to normalize. We didn't know exactly. We are we expected it to normalize within eighteen to twenty four months, which it now has, which is great to see. And you can see we sort of reentered normal territory in around June this year.

12:38 So a, that's obviously a positive. It's great that things have returned to some form of normality. And secondly, it's, you know, just worth pointing out that that the h two this year, so July, August onwards, has a much easier comp in July in h two last year. So h two last year, which you can see on this graph, we've highlighted. Obviously, trading volumes were very subdued. And now they're returning back they were we have returned to normal, which makes means the comp for last year is obviously considered easier for this year, which is just, I think, something we we just wanted to point out. So this is the graph you've seen before. This shows you why, you know, this business is is, you know, easy to predict and a wonderful business for us to earn or someone else to earn in the future.

13:29 This is this shows that if we didn't win another client over the next four years, over 90% of the future revenue is already baked in to the the to the revenue streams. So it's an incredibly predictable business because it's these are five year con on average, five year contracts from the early payment side of our business. All the work the the revenue we're generating today, the vast majority of the work for the revenue generated was that work was done in previous years. And so for the next four years, much of almost all of the work done for the next four years has been done either done historically or is gonna be done in the next twelve, twenty four months. But with clients, we already have. So we've got incredible visibility on this business.

14:15 This this chart has hardly changed. You might think it doesn't change. It actually does change. We change it. We update it every time, but it looks very similar every time. But I can show you we do update it, but it's a it's a very consistent business because of this because of this this this graph. So, Certago. So, you know, I I think the the the thing reiterating worth reiterating is that we said we were gonna focus on where we were winning, and we have. And we've also said we keep control costs under control, which we have. So revenues are growing. As James mentioned, revenues grew 41% in the first half, and our cost base did not. And that's why we've got to this wonderful place where we recorded our first half, not just month, but half of EBITDA profitability.

15:04 And I said earlier, we're now we told the market we're expecting that to be to we expect to achieve our first full year of EBITDA profitability at Stargardt as well. And here's why the revenues increased. The revenue we we were focusing on what we said we were focused on what's working. And the credit control software side of our business, this is where we provide services to Sage customers. And in return, Sage pays us for the work we do and the and the and the products we deliver to their customers. We focused in on that area. And as you can see, there's been exceptional growth this year from that. In fact, it grew over 206% over the last twelve months. Well, now we're not to be clear, but we always try to sort of feel that we don't wanna temper your enthusiasm, but but we don't expect this sort of growth to continue over time. I mean, we'd love to, obviously. I'm gonna work hard to ensure it to see if we can we can make that happen, but we don't want you thinking that this is set to continue, you know, ad infinitum. But it's wonderful to see.

16:08 And this revenue growth that's happened has resulted in revenues going up. And again, talking about the cost control that Shay and her team have implemented has resulted in EBITDA profitability. So it's a wonderful position for the the for for for for for for for TRUFIN. So to summarize, we have cash. We've got about £25,000,000 of cash. We've got two profitable businesses. We don't need any more money from shareholders. Oxygen, as you can tell, is in rude health with the procurement act subside. The impact of the procurement act subsiding means we're we're turning to a more normalized world, which is which is a good thing. And our focus is to allocate your capital as efficiently as possible.

16:57 So we've been aiming we've done that, and we can aim to continue to do that in the future. And we have got multiple options for the for the for the for the capital we have. And with whatever capital we have, we are going to make sure that we aim to generate the highest return for you, Shell. You, the shareholders, your capital after all with the lowest risk. And there's lots of you know, we can talk about the various different options we have, but as we did in our tender offer document. But I think what I think is worth just reiterating that we are just very, very focused on looking at at the the allocating your capital as efficiently as possible. So with that, whistle stop to TRUFIN. We're gonna open we thought there might be quite a few questions, so we thought we'd leave quite a lot of time for questions. So we're gonna open up to questions if that's alright with with you, Charlie. Yeah. Of course.

17:55 So shall I go to the Q and A? Yes, of course. Thank you for updating investors today. Can 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, few reference recording of today's presentation will be available in the investment company platform shortly after the meeting has ended. James, as you did say, we have received a number of questions during today's presentation. So at this point, if I could just turn 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. So yes. So I'll I'll I'll ask this this question first, which I expect many other people would wanna dodge. The obvious question is what's next? We can't afford to pay TRUFIN PLC for too long. That's you and me, James, while only overseeing two small companies with their own competent management teams. Why should I stay a shareholder?

18:45 What are the plans for the big pile of cash? And what types of business are you looking at? And have you any time frames in mind? Thanks for your great work to date. So thank you for that question. Just taking one one by one. What is next? Well, we're gonna look to allocate your capital as efficiently possible. So we've said in our tender offer tender document what the potential plans for the future are, buying up another platform business, acquiring bolt on acquisitions for oxygen. We we we as you know, we're not afraid to return money to shareholders via dividend or tender offers. All these things are are options that are open to us. You can't afford to pay TRUFIN staff is noted.

19:33 Look. We I think we we finished completed the PlayStack sale in June. And as a board, the board are absolutely focused on making sure that the costs of the group are appropriate for the size of the group. So I think we you know, that's very much a live topic. So, yes, thank you very much for that noted, though. And what are your plans for the big pile of cash? Well, as we said, we can look to allocate that capital in all sorts of different ways. But I think I think it's just worth pointing. Yes. We have half of the businesses in cash. Why should you stay at Shell? The half of the business in cash, and we own two profitable businesses now. So I'd say you should stay. You should stay, Sheldon. I'm I'm gonna advise you, but I as you noticed today, I may have noticed, I bought some more shares in TRUFIN. So I'm buying more shares in TRUFIN I believe these these businesses are undervalued with half the business in cash and two, in my view, undervalued businesses.

20:26 With I think we are a competent management team. I think there's many reasons to stay a shareholder of TRUFIN PLC. Next, James, why don't you take, why don't you take the next question? Okay. Of course. So Matthew c is asking, as the target transitions from core servicing towards a higher margin subscription and last model, what do you see as the long term margin profile of the business, and how much visibility do you currently have on the size, timing, and conversion of the existing last pipeline? So so I think I think that's right, Matthew. I think high high margin subscription business is is what we look like going forward. As we add subscription numbers to the existing revenue profile, we we would expect there to be significant flow through of those revenues to the bottom line. So depending on where where we get to, I expect margins to improve and there to be a very, very small sort of cost settlement relating to increased subscription numbers.

21:35 What is what is absolutely true, though, of the target was that it's very lean today with the cost management it's gone through. We've lost a significant number of staff. As the business moves forwards, there would inevitably as revenues grow from where it is today, what was a million pounds for the first half, there will need to be, you know, investments in the team at some point in addition to the the headcount that they currently have. But in terms of variable costs relating to increased revenues, I expect that to be expect that to be quite not not not significant. And on the pipeline and the size and timings, there is a significant pipeline that Citago is working through.

22:21 And and there is confidence that that there will be success with some of these items within the pipeline. In terms of of terms of timing, I think we've learned with with certainly with the last pipeline that it's a very difficult pipeline to manage in terms of timings. So we'll see how that evolves. But but what is absolutely true is that Sagarb is in a much better place than it has been, and it looks to the future with optimism and increased opportunity and increased pipeline. Great. Thanks, James. I think I'm to hand the next one over to you too. How much further operating leverage do you see in Oxygen as revenue continues to grow? And where do you expect the sustainable EBITDA margin to settle, obviously, remaining remaining vague? So, yes. So the operating leverage point within Oxygen is something we've seen over the last x number of years, we've seen again in this half.

23:14 The the increase in revenue is resulting in an increase a very similar increase in EBITDA. Now there will be points of time in where there will need to be investments at some point, and you may get a a half year or full year where it isn't a 100% flow through. But but in essence, we expect that that operational leverage to continue within within oxygen. And I think it's fair to say the rate of progress and rate of progression that we have seen with the EBITDA line going back two, three, four, five years, again, seems to be consistent. And we see no reason why that won't continue for the foreseeable future. Thanks, James. I think the next one well, I think well, it says David. Hi, David.

24:05 If not answered already, can you give a bit more detail about why is the target subscribers accelerated from January? Has there been a bit big a bit think it meant a big marketing plan or push from Sage, then how do we think the TAM here internationally as well? So it's for as I we focused on we've been very we've the small team has spread itself thinly over historically because there's been a lot of there's been an awful lot of opportunity at Citago. The focus has been on growing the subscribed site, and there has been a lot of effort from both Sage and Citago to do that. So Sage are, as I always say, a fantastic partner for Citago and TRUFIN and us as as Truth as Citago shareholders. It's been a it's been a a an incredibly symbiotic relationship.

24:52 So when two great partners get together and may have a big push, then, you know, it's wonderful thing things happen. So it's, yes, the marketing not not big spending. You can see from the bottom line, there hasn't been big marketing spend in order to generate these these new revenues. But that but that and and that push from Sage, that push from Target is gonna continue. In terms of the total addressable market, obviously, Sage is I'm I'm gonna assume it's the largest accounting platform in the world. Certainly, it might be the best. And and so there is a big opportunity. But that said, it's you know, at some point, we'll we'll exhaust the potential addressable market. We're not there yet, but at some point. So as I said earlier, I don't want you getting, you know, incredibly excited about, you know, this sort of growth and whether it can can carry on, you know, at infinite. It can't. It's unlikely, but it can't.

25:49 But it's certainly there's certainly more to go for. I'm gonna we and Sage Stargardt and Sage are going to do everything possible to deliver the exceptional product to as many of the Sage customers as possible. So, hopefully, that gives you and, yes, internationally, you mentioned internationally there as well, David. Yeah. Internationally is definitely something that is that is open to us, and, you know, there's lots of conversations happening. But, yeah, it's a it's it's a product that Sage customers clearly value, and so they want as many of their Sage customers to have access to it as do we. Great. I think I thought there'd be a lot more questions, and they don't seem to be. So I don't know. Either that either either it means we bought out a lot a lot of shareholders during the tender offer, and there's far few shareholders involved, or we've done an extremely good job explaining ourselves.

26:44 So I think that might be it, Charlie. Perfect. Thank you to you both for answering those questions from investors today. But just before we ask investors to share their feedback, which I know is particularly important to the company, James, could I please start you for some closing comments? Yes. So thanks, Charlie. So I I just wanna reiterate what I've said before. Half the market cap is in cash. We've got two profitable businesses. We're gonna look to allocate your capital as efficiently as we possibly can. We're gonna get the highest return with the lowest risk. And I think I think we can say as a management team, we proved that we're not afraid. You we're not a management team that's gonna hoard your cash just because we wanna keep hold of it. We're gonna do what's right with the remaining capital we have. And if that means giving the money back to shareholders, we'll do that. But we are looking very closely at other op opportunities for that capital.

27:34 And thank you very much for your support and your for being shared as a TRUFIN over time, and we'll we'll look forward to updating you in the future. Perfect. Thank you. Can I please ask investors not to close this session as you now be automatically redirected to provide your feedback? 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