31 January
2025
Investment Evolution Credit
plc
("IEC",
the "Company" or the "Group")
Interim
Results
Investment Evolution Credit plc
(AQSE: IEC) - 31 January 2025: IEC, a global fintech group
specialising in online consumer loans, announces its interim
results from 1 July 2024 to 31 December 2024.
The full interim report can be found
on the Company's website, https://www.investmentevolution.com/.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
accept responsibility for the contents of this
announcement.
Enquiries:
|
Investment Evolution Credit plc
|
|
|
Marc Howells - CEO
|
iec@investmentevolution.com
|
|
Cairn Financial Advisers LLP (IEC AQSE Corporate
Adviser)
|
|
|
Ludovico Lazzaretti
|
+44 (0) 20 7213
0880
|
|
Jo Turner
|
|
For
more information please visit: www.investmentevolution.com/investors
Caution Regarding Forward Looking Statements
Certain statements made in this
announcement are forward-looking statements. These forward-looking
statements are not historical facts but rather are based on the
Company's current expectations, estimates, and projections about
its industry; its beliefs; and assumptions. Words such as
'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,'
'estimates,' and similar expressions are intended to identify
forward-looking statements. These statements are not a guarantee of
future performance and are subject to known and unknown risks,
uncertainties, and other factors, some of which are beyond the
Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in
the forward-looking statements. The Company cautions security
holders and prospective security holders not to place undue
reliance on these forward-looking statements, which reflect the
view of the Company only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to
events as of the date on which the statements are made. The Company
will not undertake any obligation to release publicly any revisions
or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of
this announcement except as required by law or by any appropriate
regulatory authority.
STRATEGIC REPORT
FOR
THE SIX MONTHS ENDED 31 DECEMBER 2024
The Directors present their
Strategic Report for the six months ended 31 December
2024.
Business Review and Future Developments
The Group is an Artificial
Intelligence (AI) driven, consumer finance fintech innovator with a
mission to rehabilitate borrowers through better technology and
fairer products. The Group is an experienced regulated licensed
lender under the consumer brand Mr. Amazing Loans in the United
States with state consumer lending licenses/certificates of
authority in the six states of California, Florida, Georgia,
Illinois, Nevada and New Jersey and an established track-record of
regulatory compliance for over 14 years.
The Group is pursuing a strategic
approach that involves a combination of acquisitions and
technological innovation. By acquiring existing businesses, the
Group aims to accelerate market entry and expand its loan
portfolio. Simultaneously, the integration of AI aims to optimise
operations and unlock new growth opportunities.
The Group is prioritising acquiring
existing UK lenders with Financial Conduct Authority (FCA) licenses
alongside pursuing its own application, which would entail a
quicker entry into the UK market. Further, post-acquisition of a UK
FCA licensed lender, the Group plans to grow its loan book through
further acquisitions and organic lending in both the UK and US.
Additionally, the Group intends to significantly expand its US
operations by increasing its number of state lending licenses,
prioritise maximising lending in the high-margin U.S. states of
Georgia, California, and Nevada and also explore expansion into
other international markets beyond the UK and US. Finally, the
Group is exploring opportunities to increase revenue through
partnerships and licensing its intellectual property/US licenses to
entities like medical providers, educational institutions,
retailers, and lower-margin lenders.
To achieve these goals the Group
announced the following board changes. John Philip de Blocq van
Kuffeler MA, FCA, will be appointed to the Board as Executive
Chairman. On 1 January 2025, Marc Howells was appointed to the
Board as Executive Director and Chief Executive Officer and Dr
Richard Leaver PhD was appointed as an independent Non-Executive
Director.
Both John and Marc have decades of
experience in consumer credit and have successfully built and sold
other companies in this sector. The Group plans to utilise Richard
Leaver's expertise in AI to further optimise the use of AI in its
consumer lending operational processes and seek potential joint
ventures and acquisitions in the AI space.
The Group is focused on obtaining
institutional debt funding and is currently in discussions with
institutional debt providers for both UK and US funding. The new
proposed Board members also have a substantial personal network of
debt funding contacts.
Principal risk and uncertainties
The Group is exposed to the
following significant risks and uncertainties:
Financial risk factors
The Group has recently been
incorporated and has a limited operating history upon which
prospective investors may assess the likely performance of the
Group. The Group's success will depend upon the Directors' ability
to identify and manage future opportunities that arise.
Market risk
The Group's market risk is limited
only to foreign exchange rates arising from potential fluctuations
in foreign exchange rates, particularly the US Dollar against the
GBP. This risk is managed through policies approved by the
Directors and is regularly monitored and reviewed to mitigate
potential financial impacts.
Strategic risk
The Group's ability to generate
profit will be reliant upon the performance of investments and the
successful execution of the business strategy. The Group seeks to
mitigate this risk by implementing a sustainable business model.
The Board of Directors meets at least four times a year to revisit
the Group's strategy and align it with current market and economic
conditions.
Regulatory and legal risk
The Group has limited exposure when
it comes to regulatory and legal risk due to its size. However, as
the Group expands its activities, it will become increasingly
obligated to comply with the laws, rules, regulations, and policies
of the jurisdictions in which it operates. Acquisitions will be
audited against current regulatory requirements including Customer
Duty.
Reputational risks
The Group seeks to ensure its
business minimises reputational risk through the Board of Directors
policies, procedures, and controls for corporate governance and
risk management.
Credit risk
The Group's credit risk is primarily
associated with cash and cash equivalents, as well as trade and
other receivables. To mitigate this risk, the Group leverages
insurance coverage for bank deposits and focuses on transactions
with financially sound related parties. The Group assesses credit
risk as low due to the perceived creditworthiness of
counterparties. However, economic conditions could potentially
impact the ability of consumers to fulfil their loan obligations.
The Group applies a simplified approach to measure expected credit
losses and benefits from the structure of its Funding and
Participation Agreement to minimise credit loss
provisions.
Liquidity risk
The Group prioritises maintaining
sufficient liquidity to meet its financial obligations. The Board
of Directors regularly assesses potential risks through stress
testing to ensure the Group's financial stability. A liquidity
shortfall could negatively impact on the Group's credit rating,
investor confidence, and ability to raise funds.
Capital risk
The Group follows a cautious
strategy in capital management. The Board of Directors consistently
assesses budgets and forecasts, including capital and liquidity
ratios, to ensure prudent management of capital
resources.
Financial Key Performance Indicators
The main key performance indicators
for the six months ended 31 December 2024 were as
follows:
·
Revenue and other income
of £12,181
· Loss before
taxation of £405,149
· Net loss after
tax of £405,149
· Loss per share
of £0.03
· Cash and cash
equivalents balance of £37,151
Section 172 (1) Statement
From the perspective of the Board,
as a result of the Group's governance structure, the matters that
are responsible for considering under Section 172 (1) of the
Companies Act of 2006 have been considered to an appropriate extent
by the Group's Board. The Board has also considered relevant
matters where appropriate.
By order of the Board
Neil Patrick - Director &
Chairman of Audit & Risk Committee
31 January 2025
DIRECTORS' REPORT
FOR
THE SIX MONTHS ENDED 31 DECEMBER 2024
The Directors present their report
and the unaudited condensed consolidated interim financial
statements of the Group for the six months ended 31 December
2024.
Future Developments
As set out in the Company's
admission document, the Company continues to explore the FCA
lending application process, however it is also in discussions with
potential acquisition targets in the UK lending space
which already hold existing FCA lending licences, have existing
operations and hold existing consumer loan books with a view to
considering the merits of obtaining the FCA licence via acquisition
rather than application. Given the advanced nature of discussions
with certain acquisition targets, the Board anticipates that the
acquisition of an existing UK FCA licensed lender could
occur in Q1 2025, with more potential acquisition targets to
follow. Upon signing a heads of agreement, the licence change of
control process is estimated to take approximately three months and
the application work previously completed in respect of the
Company's own FCA lending application would be utilised in the
process. Following a potential UK acquisition, the Group
intends to seek further larger loan book acquisition rollups in
both UK and US in addition to organic lending
growth. With regards to US state lending licences, the
Group plans to expand the number of current US state consumer
lending licenses from six to twenty during 2025 and seek to
significantly expand US operations.
To ensure it has sufficient
resources to achieve its stated aim above, the Group raised
£100,000 in August 2024, £457,526 in October 2024, £2,500 in
November 2024 and £27,000 in December 2024.
Further funding will be required as
and when any acquisition above is completed. Existing shareholders
have expressed interest in providing further equity financing and
the board continues to explore debt financing
opportunities.
Directors of the company
The directors who have served during
the period were as follows:
|
Paul Mathieson (Appointed 7 June
2023, Resigned 31 December 2024)
Sameer Prasad (Appointed 24 May
2023, Resigned 31 July 2024)
Glendys Aguilera (Appointed 14
December 2023)
Neil Patrick (Appointed 14 December
2023)
|
Directors' interests
The Directors who served during the
period and their interests in the Group's issued share capital
were:
|
|
|
Number of ordinary
shares held as at 31
December 2024
|
|
|
|
|
|
Paul Mathieson
|
|
24,237,913
|
|
Sameer Prasad
|
|
4,350,394
|
|
Glendys Aguilera
|
|
-
|
|
Neil Patrick
|
|
300,000
|
Dividends
The Directors do not recommend the
payment of a dividend in respect of the period.
Substantial shareholders
As at 31 December 2024, the Group
has been notified of the following beneficial interests of 3% or
more in its shares:
|
Name of shareholder
|
Number of
shares
|
% of issued share capital
& voting rights
|
|
Paul Mathieson
|
24,237,913
|
37.31%
|
|
Sameer Prasad
|
4,350,394
|
6.70%
|
|
J and W Willoughby
|
3,335,000
|
5.13%
|
|
Gant Investments Pty Ltd
|
2,155,416
|
3.32%
|
|
L Prasad Pty Ltd
|
2,073,105
|
3.19%
|
Financial instruments
The Group's financial instruments
are set out in Note 17 to the financial statements and consist of
cash and cash equivalents, trade and other receivables, other
current assets, trade and other payables and non-recourse
distributions from loans receivable.
Branches outside the UK
The Group consists of three entities
registered in the United Kingdom and one in the United States of
America.
Political donations and expenditure
No political donations were made in
the period.
Other matters
Financial Key Performance Indicators
and Principal risk and uncertainties are disclosed in the Strategic
Report.
Going concern
The Directors noted the loss that
the Group has made for the six months ended 31 December 2024. The
Directors have prepared cash flow forecasts extending to 31 January
2026 which show that, in order for the Company to continue to
discharge its liabilities as they fall due and to continue with its
planned expansion of the Group, additional cash will be
required.
The ability to successfully raise
additional finance is subject to uncertainty. However, the
Directors believe this uncertainty will be successfully resolved
and the Group will raise sufficient cash to enable the Group to
continue in operational existence for the foreseeable future and
continue with the Group's plans. They have, therefore,
prepared the financial statements on a going concern basis.
The financial statements do not reflect any adjustments that would
be required to be made if they were prepared on a basis other than
the going concern basis.
Directors' responsibilities
The Directors have elected to
prepare the condensed consolidated interim financial statements in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the UK, which includes all applicable individual
International Financial Reporting Standards, International
Accounting Standards (IAS) and interpretations issued by the
International Accounting Standards Board (IASB).
The condensed consolidated interim
financial statements are prepared so as to give a true and fair
view of the state of affairs of the group and of the profit or loss
of the group for that period. In preparing these condensed
consolidated interim financial statements, the Directors are
required to:
·
select suitable accounting policies and then apply
them consistently;
·
make judgments and estimates that are reasonable
and prudent;
·
state whether applicable IFRS
have been followed, subject to any material departures disclosed
and explained in the consolidated financial statements;
and
·
prepare the condensed consolidated interim
financial statements on the going-concern basis unless it is
inappropriate to presume that the group will continue in
business.
The Directors are responsible for
keeping proper accounting records that are sufficient to show and
explain the Group's transactions and disclose with reasonable
accuracy at any time the financial position of the company and the
group. They are also responsible for the system of internal
control, 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.
The maintenance and integrity of the
Group's website is the responsibility of the Directors.
By order of the Board
Neil Patrick - Director &
Chairman of Audit & Risk Committee
31 January 2025
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE
INCOME
The condensed consolidated interim
statements of total comprehensive income of the Group for the six
months ended 31 December 2024 and 2023 and the period ended 30 June
2024:
|
|
|
Six Months
Ended
|
|
Period
Ended
|
|
Six Months
Ended
|
|
|
|
31 Dec 2024
|
|
30 June
2024
|
|
31 Dec 2023
|
|
|
Note
|
£
|
|
£
|
|
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
Revenue
|
2
|
11,269
|
|
224,910
|
|
17,884
|
|
Cost of services
|
|
(43,661)
|
|
(98,645)
|
|
(47,180)
|
|
Gross Profit (Loss)
|
|
(32,392)
|
|
126,265
|
|
(29,296)
|
|
Administrative expenses
|
3
|
(374,037)
|
|
(603,534)
|
|
(177,150)
|
|
Other income
|
4
|
912
|
|
229,667
|
|
278,986
|
|
Operating loss
|
|
(405,517)
|
|
(247,602)
|
|
72,540
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
368
|
|
1,056
|
|
514
|
|
|
|
|
|
|
|
|
|
Income (loss) before taxation
|
|
(405,149)
|
|
(246,546)
|
|
73,054
|
|
Income tax
|
7
|
-
|
|
(26,903)
|
|
(31,224)
|
|
Income (loss) after tax
|
|
(405,149)
|
|
(273,449)
|
|
41,830
|
|
|
|
|
|
|
|
|
Income (loss) attributable to the Group
|
|
(405,149)
|
(273,449)
|
|
41,830
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
Currency translation
adjustment
|
|
(1,721)
|
|
1,510
|
|
97
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the
period
|
|
(406,870)
|
|
(271,939)
|
|
41,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss)
per share
|
6
|
(0.03)
|
(0.02)
|
|
0.002
|
Revenue and operating income (loss)
for the period were derived from continuing operations.
The Group has no recognised gains or
losses other than the loss for the current year.
The notes form an integral part of
these condensed consolidated interim financial
statements.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
The condensed consolidated interim
statements of financial position of the Group as at
31 December 2024 and 30 June 2024
are stated below:
|
|
|
|
As
at
|
|
As
at
|
|
|
|
|
31 December
2024
|
|
30 June
2024
|
|
|
Note
|
|
£
|
|
£
|
|
ASSETS
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Current assets
|
|
|
|
|
|
|
Other current assets
|
9
|
|
16,408
|
|
18,855
|
|
Deferred financing costs
|
10
|
|
174,000
|
|
66,431
|
|
Trade and other
receivables
|
11
|
|
81,279
|
|
95,123
|
|
Cash and cash equivalents
|
12
|
|
37,151
|
|
101,110
|
|
Total current assets
|
|
|
308,838
|
|
281,519
|
|
|
|
|
|
|
|
Total assets
|
|
|
308,838
|
|
281,519
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Non-recourse distributions from
loans receivable
|
13
|
|
42,502
|
|
52,325
|
|
Total non-current liabilities
|
|
|
42,502
|
|
52,325
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Trade and other payables
|
14
|
|
302,121
|
|
242,302
|
|
Total current liabilities
|
|
|
302,121
|
|
242,302
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
344,623
|
|
294,627
|
|
|
|
|
|
|
|
|
Net
liabilities
|
|
|
(35,785)
|
|
(13,108)
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Share capital
|
16
|
|
324,818
|
|
78,805
|
|
Share premium
|
16
|
|
318,206
|
|
180,026
|
|
Accumulated deficit
|
|
|
(678,598)
|
|
(273,449)
|
|
Currency translation
reserves
|
|
|
(211)
|
|
1,510
|
|
Total deficit
|
|
|
(35,785)
|
|
(13,108)
|
The notes form an integral part of
these condensed consolidated interim financial
statements.
The condensed consolidated interim
financial statements were approved by the Board on 31 January
2025.
Neil Patrick
Director & Chairman of Audit
& Risk Committee
Company registration number:
14890706
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
The unaudited condensed consolidated
interim statement of changes in equity of the Group for the six
months ended 31 December 2024 and 2023 and the period ended 30 June
2024 is stated below:
|
|
Share
capital
£
|
Share
premium
£
|
Currency translation
reserve
£
|
Accumulated
Deficit
£
|
Total
deficit
£
|
|
|
(Unaudited)
|
|
|
|
|
Balance at 1 July 2024
|
78,805
|
180,026
|
1,510
|
(273,449)
|
(13,108)
|
|
Loss for the period
|
-
|
-
|
-
|
(405,149)
|
(405,149)
|
|
Other comprehensive income
|
|
|
|
|
|
|
Currency translation
adjustment
|
-
|
-
|
(1,721)
|
-
|
(1,721)
|
|
Total comprehensive income (loss) for the
period
|
78,805
|
180,026
|
(211)
|
(678,598)
|
(419,978)
|
|
Issue of ordinary shares - net of
fees
|
246,013
|
138,180
|
-
|
-
|
384,193
|
|
Balance at 31 December 2024
|
324,818
|
318,206
|
(211)
|
(678,598)
|
(35,785)
|
|
|
Share
capital
£
|
Share
premium
£
|
Currency translation
reserve
£
|
Accumulated
Deficit
£
|
Total
deficit
£
|
|
|
(Audited)
|
|
|
|
|
|
|
|
|
Balance at 24 May 2023
|
-
|
-
|
-
|
-
|
-
|
|
Loss for the period
|
-
|
-
|
-
|
(273,449)
|
(273,449)
|
|
Other comprehensive income
|
|
|
|
|
|
|
Currency translation
adjustment
|
-
|
-
|
1,510
|
-
|
1,510
|
|
Total comprehensive income (loss) for the
period
|
-
|
-
|
1,510
|
(273,449)
|
(271,939)
|
|
Issue of ordinary shares - net of
fees
|
78,805
|
180,026
|
-
|
-
|
258,831
|
|
Balance at 30 June 2024
|
78,805
|
180,026
|
1,510
|
(273,449)
|
(13,108)
|
|
|
Share
capital
£
|
Share
premium
£
|
Currency translation
reserve
£
|
Retained
earnings
£
|
Total
equity
£
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Balance at 1 July 2023
|
62,112
|
8,775
|
-
|
148,154
|
219,041
|
|
Income for the period
|
-
|
-
|
-
|
41,830
|
41,830
|
|
Other comprehensive income
|
|
|
|
|
|
|
Currency translation
adjustment
|
-
|
-
|
97
|
-
|
97
|
|
Total comprehensive income for the period
|
62,112
|
8,775
|
97
|
189,984
|
260,968
|
|
Issue of ordinary shares - net of
fees
|
11,693
|
166,590
|
-
|
-
|
178,283
|
|
Balance at 31 December 2023
|
73,805
|
175,365
|
97
|
189,984
|
439,251
|
The notes form an integral part of
these condensed consolidated interim financial
statements.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH
FLOW
The condensed consolidated interim
statement of cash flow of the Group for the period ended 31
December 2024 and 30 June 2024 is stated below:
|
|
|
|
Period
ended
|
|
Period
ended
|
|
|
|
|
31 December
2024
|
|
30 June
2024
|
|
|
Note
|
|
£
|
|
£
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
Loss from operations before
tax
|
|
|
(405,149)
|
|
(246,546)
|
|
Adjustments to net loss
|
|
|
|
|
|
|
Loss on
abandonment of bond issuance
|
10
|
|
18,535
|
|
-
|
|
Provision
for credit loss
|
|
|
3,975
|
|
177,961
|
|
Unrealised
foreign exchange gain (loss)
|
|
|
962
|
|
(206)
|
|
Goodwill
impairment
|
|
|
-
|
|
2,939
|
|
Interest
income
|
|
|
(368)
|
|
(1,056)
|
|
Write-off
of related party accounts, net
|
|
|
(1,439)
|
|
-
|
|
Changes in working
capital:
|
|
|
|
|
|
|
Increase (decrease) in trade and
other receivables
|
|
|
(39,144)
|
|
(196,371)
|
|
Increase (decrease) in other current
assets
|
|
|
2,460
|
|
(17,525)
|
|
Increase (decrease) in trade and
other payables
|
|
|
59,246
|
|
(127,686)
|
|
Cash used in operating activities
|
|
|
(360,922)
|
|
(408,490)
|
|
|
|
|
|
|
|
|
Interest received
|
|
|
368
|
|
1,056
|
|
Net
cash used in operating activities
|
|
|
(360,554)
|
|
(407,434)
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Cash from acquired
subsidiaries
|
8
|
|
-
|
|
241,220
|
|
Net
cash generated from investing activities
|
|
|
-
|
|
241,220
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Receipts from share
issuances
|
|
|
587,026
|
|
738,621
|
|
Loan from a shareholder
|
|
|
140,000
|
|
100,000
|
|
Payments for deferred debt issue
costs
|
|
|
-
|
|
(18,535)
|
|
Payments for loan funding
|
|
|
(9,991)
|
|
(26,627)
|
|
Loan re-payments to
shareholder
|
|
|
(90,000)
|
|
-
|
|
Payments for share issue and
offering-related costs
|
16
|
|
(328,937)
|
|
(527,686)
|
|
Net
cash generated from financing activities
|
|
|
298,098
|
|
265,773
|
|
|
|
|
|
|
|
|
Foreign exchange impact
|
|
|
(1,503)
|
|
1,551
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(63,959)
|
|
101,110
|
|
Cash and cash equivalents at
beginning of period
|
|
|
101,110
|
|
-
|
|
Cash and cash equivalents at end of period
|
12
|
|
37,151
|
|
101,110
|
|
|
|
|
|
|
|
The notes form an integral part of
these condensed consolidated interim financial
statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
FOR
THE SIX MONTHS ENDED 31 DECEMBER 2024
1.
Material accounting policy information and other explanatory
information
(a)
General information
Investment Evolution Credit plc
("IEC UK" or the "Parent Company") is a limited company
incorporated in England and Wales under the Companies Act of 2006.
The address of the registered office is 6th Floor, 60
Gracechurch Street, London, EC3V 0HR. The nature of the
Group's operations and principal activities is providing loans to
customers and financial management services, including accounting,
valuations, and capital structure services.
The Parent Company was incorporated
on 24 May 2023 and was re-registered as a public limited company on
2 November 2023. It commenced trading on the Aquis Stock Exchange
Growth Market ('AQSE') on 14th December 2023.
MRAL US Corporation (previously Investment Evolution
Corporation) ("MRAL US") acquired by IEC UK on 1 July 2023
(see Note 8), is engaged in providing unsecured online consumer
loans under the brand name "Mr. Amazing Loans" via the MRAL US
website and online application portal at www.mramazingloans.com.
MRAL US started its business and opened its first office in Las
Vegas, Nevada in 2010. MRAL US currently offers $2,000 to $10,000
unsecured consumer loans that mature, unless prepaid, five years
from the date they are issued. MRAL US is a direct lender with
state licenses and/or certificates of authority in 6 states -
California, Florida, Georgia, Illinois, Nevada and New Jersey. MRAL
US originates direct consumer loans to residents of these states
through its online application portal, with all loans originated,
processed and serviced out of its centralised Las Vegas head
office.
MRAL UK Ltd (previously IEC Credit Ltd) was
incorporated on 29 May 2023 to provide unsecured online consumer
loans to customers in the United Kingdom subject to approval and
authorisation by the Financial Conduct Authority.
As of 31 December 2024, the Parent
Company holds 100% direct interest in MRAL US and MRAL UK Ltd.
(MRAL US, and MRAL UK Ltd, together, are referred to as the
"Subsidiaries").
The term "Group" refers to the
Parent and the Subsidiaries.
(b)
Basis of preparation
The condensed consolidated interim
financial statements of the Group as at 31 December 2024 and 30
June 2024, and for the six months ended 31 December 2024 and 2023
and the period ended 30 June 2024 have been prepared in accordance
with UK-adopted IAS 34 "Interim Financial Reporting" and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards, and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The principal accounting policies
applied in the preparation of the condensed consolidated interim
financial statements are set out below. These policies have been
consistently applied to the period presented, unless otherwise
stated.
The financial statements have been
prepared on a historical cost basis, except for certain financial
assets and liabilities measured at fair value. The unaudited
condensed consolidated interim financial statements are presented
in GBP (£) unless otherwise stated, which is the Group's functional
currency.
Comparative figures and reporting period
Comparative figures have been
presented as the Group's condensed consolidated interim financial
statements covering as at 31 December 2024 and 30 June 2024, and
for the six months ended 31 December 2024 and 2023 and the period
ended 30 June 2024. The accounting reference date has been changed
to 30 June to align with the US subsidiary. Further, under
Companies House accounts guidance, the accounting reference date
can be extended to no more than 18 months for the first accounting
reference date.
Principles of consolidation
Subsidiaries are all entities over
which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date
that control ceases.
The Group uses the acquisition
method of accounting to account for business combinations.
Inter-company transactions, balances and unrealised gains and
losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries have been changed where
necessary, to ensure consistency with the policies adopted by the
Group.
Going concern
The Directors noted the loss that
the Group has made for the six months ended 31 December 2024. The
Directors have prepared cash flow forecasts extending to 31 January
2026 which show that, in order for the Company to continue to
discharge its liabilities as they fall due and to continue with its
planned expansion of the Group, additional cash will be
required.
The ability to successfully raise
additional finance is subject to uncertainty. However, the
Directors believe this uncertainty will be successfully resolved
and the Group will raise sufficient cash to enable the Group to
continue in operational existence for the foreseeable future and
continue with the Group's plans. They have, therefore, prepared the
financial statements on a going concern basis. The financial
statements do not reflect any adjustments that would be required to
be made if they were prepared on a basis other than the going
concern basis.
New
standards that are effective in the current
period
In the current period, the Group has
adopted a number of amendments to IFRS Accounting Standards issued
by the International Accounting Standards Board (IASB) that are
mandatorily effective for an accounting period that begins on or
after 1 January 2024. Their adoption has not had any material
impact on the disclosures or on the amounts reported in these
financial statements.
|
Standards/Interpretations
|
Application
|
|
IAS 21 Amendments
|
Lack of Exchangeability
|
|
IFRS 9 and IFRS 7
Amendments
|
Classification and Measurement of
Financial Instruments
|
|
IFRS 18
|
Presentation and Disclosure in
Financial Statements
|
|
IFRS 19
|
Subsidiaries without Public
Accountability: Disclosures
|
Standards and interpretations issued and not yet adopted by
the Group
As at the date of the Group's
condensed consolidated interim financial statements, the Directors
have reviewed the standards in issue by IASB and IFRIC, which are
effective for periods beginning on or after the stated effective
date but have not yet been applied. In their view, these
standards would not have a material impact on the financial
reporting of the Group.
|
Standards/Interpretations
|
Application
|
Effective from
|
|
IAS 1 Amendments
|
Non-current-current liabilities with
covenants (classification of liabilities as current or
non-current)
|
1 January 2024
|
|
IFRS 9 and IFRS 7
Amendments
|
Classification and Measurement of
Financial Instruments
|
1 January 2026
|
|
IFRS 18
|
Presentation and Disclosure in
Financial Statements
|
1 January 2027
|
|
IFRS 19
|
Subsidiaries without Public
Accountability: Disclosures
|
1 January 2027
|
(c)
Revenue recognition
Revenue is recognised at the fair
value of the consideration received or receivable.
The Group's primary revenue includes
loan interest, loan originator fees and financial management fees.
A contract with a customer that results in a recognised financial
instrument may be within the scope of IFRS 9 and IFRS
15.
Revenue on loan interest is
recognised using the effective interest method over the life of the
loan as it is earned and collected on a periodic basis. Revenue on
loan originator fee is earned on the date the corresponding loan is
recognised. Loan originator fee pertains to a specific fee charged
to the borrower at loan origination date. These fees are recognised
in accordance with the applicable loan agreement.
Revenue on financial management
services are recognised as earned, calculated, and collected in
accordance with the applicable agreement for financial management
and administrative services rendered. In the event that financial
management fee is received before it is earned, deferred revenue is
recorded and is included under liabilities in the consolidated
statements of financial position.
The performance obligation to
provide the service to the customer is satisfied over time
beginning from the period when the control on the agreed cash or
loan transfers to the customers.
The Group recognised the incremental
costs of obtaining a contract as an expense when incurred if the
amortisation period determined in reference to the life of the
contract of the resulting asset that the Company otherwise would
have recognised is one year or less.
The Group does not adjust the amount
of consideration for the effects of a significant
financing
component if, at contract inception,
the expected period between the transfer of promised services and
customer payment is one year or less.
Interest revenue
Interest revenue is recognised over
time according to the agreed interest rate and payment dates within
the loan contract.
Other income
Other income is recognised when
earned or realised.
(d)
Financial instruments
Financial assets and financial
liabilities are recognised when the Group becomes party to the
contractual provisions of the instrument. Financial assets and
financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable (other than
financial assets or liabilities at fair value through profit or
loss) are added to or deducted from the fair value as appropriate
on initial recognition.
Equity instruments are any contract
that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments are recognised
as proceeds received net of issue costs.
Financial assets
The Group's financial assets
comprise trade and other receivables, as well as cash and cash
equivalents, and security deposit.
Financial assets are recognised when
the Group becomes a party to the contractual provisions of the
instrument and are recognised at fair value and subsequently
measured at amortised cost using the effective interest method less
provision for impairment, based on the receivable ageing, previous
experience with the debtor and known market intelligence. Any
change in their value is recognised in the statement of total
comprehensive income.
Derecognition of financial assets
occurs when the rights to receive cash flows from the investments
expire or are transferred and substantially all of the risks and
rewards of ownership have been transferred. An assessment for
impairment is undertaken at least at each statement of financial
position date, whether or not there is objective evidence that a
financial asset or a group of financial assets is
impaired.
Financial liabilities
The Group' financial liabilities
comprise trade and other payables, funding advance for new loans,
and non-recourse distributions from loans receivable.
Financial liabilities are initially
recognised at fair value of the consideration received net of issue
costs. After initial recognition, financial liabilities are
measured at amortised cost using the effective interest method. All
interest-related charges are included in the condensed consolidated
interim statement of total comprehensive income line item "finance
expense". Financial liabilities are derecognised when the
obligation to settle the amount is removed.
(e)
Fair values
Fair value is the amount for which a
financial asset, liability, or instrument could be exchanged
between knowledgeable and willing parties in an arm's length
transaction. It is determined by reference to quoted market prices
adjusted for estimated transaction costs that would be incurred in
an actual transaction or by the use of established estimation
techniques.
All assets and liabilities for which
fair value is measured or disclosed in the financial statement are
categorised within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to their fair
value measurement as a whole:
· Level
I - Inputs are unadjusted, quoted prices for identical assets or
liabilities in active markets at the measurement date;
·
Level II - Inputs, other than
quoted prices included in Level I that are observable for the asset
or liability through corroboration with market data at the
measurement date;
· Level III - Unobservable inputs that reflect management's best
estimate of what market participants would use in pricing the asset
or liability at the measurement date.
The following table summarises fair
value measurements by level as at 31 December 2024, and 30 June
2024, respectively, for assets and liabilities measured at
amortised cost on a recurring basis:
|
|
As at 31 December
2024
|
|
|
(Unaudited)
|
|
|
Level I
|
Level II
|
Level III
|
Total
|
|
|
£
|
£
|
£
|
£
|
|
Financial assets
|
|
|
|
|
|
Cash and cash equivalents
|
37,151
|
-
|
-
|
37,151
|
|
Trade and other
receivables
|
81,279
|
-
|
-
|
81,279
|
|
Other current assets*
|
1,342
|
-
|
-
|
1,342
|
|
*Excluding Input Value-Added Tax
(VAT)
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other payables
|
302,121
|
-
|
-
|
302,121
|
|
Non-recourse distributions from
loans receivable
|
42,502
|
-
|
-
|
42,502
|
|
|
As at 30 June
2024
|
|
|
(Audited)
|
|
|
Level I
|
Level II
|
Level III
|
Total
|
|
|
£
|
£
|
£
|
£
|
|
Financial assets
|
|
|
|
|
|
Cash and cash equivalents
|
101,110
|
-
|
-
|
101,110
|
|
Trade and other
receivables
|
95,123
|
-
|
-
|
95,123
|
|
Other current assets*
|
1,330
|
-
|
-
|
1,330
|
|
*Excluding Input Value-Added Tax
(VAT)
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
Trade and other payables
|
242,302
|
-
|
-
|
242,302
|
|
Non-recourse distributions from
loans receivable
|
52,325
|
-
|
-
|
52,325
|
The fair values at the end of the
reporting period are approximately in line with their reported
carrying values unless specifically mentioned in the notes to the
financial statements.
(f)
Deferred financing costs
i. Share
issue/offering
Direct offering costs consisted of
fees and expenses incurred in connection with the sale of the
Group's common stock, including the legal, consulting, accounting,
printing, and other offering-related costs. Upon completion of the
Initial Public Offering or share issuance process, these
offering/issue costs were charged against the net proceeds from the
offering and share issuances.
ii. Debt issue
costs
Debt issuance costs include fees and
commissions paid to third parties in connection with the issuance
of debt, including investment banks, law firms, auditors, and
regulators. Upon issuance of the debt instrument, the debt issue
costs will be recognised as a direct deduction from the carrying
value of the associated debt.
(g)
Receivables
Loans receivable is recognised at
the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised
at fair value, in accordance with IFRS 15 and subsequently measured
at amortised cost using the effective interest method, less
allowance for expected credit loss.
Expected credit losses are
calculated in accordance with the simplified approach permitted by
IFRS 9, using a provision matrix applying lifetime historical
credit loss experience to the trade receivables. The expected
credit loss rate varies depending on whether, and the extent to
which, settlement of the loan receivables is overdue, and it is
also adjusted as appropriate to reflect current economic conditions
and estimates of future conditions. The unobservable inputs used to
calculate the fair value of these loans include historical loss
rates, recent default trends and estimated remaining loan terms.
Therefore, the carrying value of the loan's receivable approximates
the fair value.
When a loan receivable is determined
to have no reasonable expectation of recovery it is written off,
firstly against any expected credit loss allowance available and
then to the income statement.
Subsequent recoveries of amounts
previously provided for or written off are credited to the income
statement.
(h)
Payables
Payables are obligations to pay for
goods or services that have been acquired in the ordinary course of
business from suppliers. Payables are recognised initially at fair
value and subsequently measured at amortised cost using the
effective interest method. Payables are classified as current
liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities. Payables are derecognised
when the obligation specified in a contract is discharged,
cancelled or has expired.
(i)
Borrowings
Borrowings are initially recognised
at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost.
Any difference between the proceeds
(net of transaction costs) and the redemption amount is recognised
in profit and loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be
drawn down.
Borrowings are removed from the
condensed consolidated interim statement of financial position when
the obligation specified in the contract is discharged, cancelled
or expired.
Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the
reporting period.
(j)
Provisions
Provisions for legal claims and make
good obligations are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably
estimated.
Provisions are not recognised for
future operating losses.
Provisions are measured at the
present value of management's best estimate of the expenditure
required to settle the present obligation at the end of the
reporting period.
(k)
Expenses
Expenses are recognised when a
decrease in future economic benefit related to a decrease in an
asset or an increase in liability has arisen that can be measured
reliably. Expenses are recognised: (i) on the basis of a direct
association between the costs incurred and the earning of specific
items of income; (ii) on the basis of systematic and rational
allocation procedures (i.e., when economic benefits are expected to
arise over several accounting periods and the association with
income can only be broadly or indirectly determined); or (iii)
immediately when an expenditure produces no future economic
benefits or when, and to the extent that future economic benefits
do not qualify, or cease to qualify, for recognition in the
statements of financial position.
(l)
Taxes
i. Current tax
Income taxes include all taxes based
on the taxable profits of the Group. Taxable profit differs from
net profit as reported in the profit and loss account because it
excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by
the reporting end date.
ii. Deferred tax
Deferred income tax is provided in
the financial statements using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts. Deferred income tax assets relating to the
carry-forward of unused tax losses are recognised to the extent
that it is probable that future taxable profit will be available
against which the unused tax losses can be utilised.
Current and deferred income tax
assets and liabilities are offset when the same taxation authority
levies the income taxes and when there is a legally enforceable
right to offset them.
iii. Other taxes
Other taxes not based on income,
such as value added, property, and capital axes, are included
within prepayments, current liability, or operating expenses
according to their nature.
(m)
Business combinations
The acquisition method of accounting
is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The
consideration transferred for the acquisition of a subsidiary
comprises the:
· fair
values of the assets transferred;
· liabilities incurred to the former owners of the acquired
business;
· equity
interests issued by the Group;
· fair
value of any asset or liability resulting from a contingent
consideration arrangement; and
· fair
value of any pre-existing equity interest in the
subsidiary.
Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at
their fair values at the acquisition date.
Acquisition-related costs are
expensed as incurred.
The excess of the consideration
transferred, amount of any non-controlling interest in the acquired
entity, and acquisition-date fair value of any previous equity
interest in the acquired entity, over the fair value of the net
identifiable assets acquired is recorded as goodwill. If those
amounts are less than the fair value of the net identifiable assets
of the business acquired, the difference is recognised directly in
profit or loss and other comprehensive income as a bargain
purchase.
Where settlement of any part of cash
consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The
discount rate used is the entity's incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from
an independent financier under comparable terms and
conditions.
Contingent consideration is
classified either as equity or a financial liability. Amounts
classified as a financial liability are subsequently remeasured to
fair value with changes in fair value recognised in profit or loss
and other comprehensive income.
(n)
Goodwill
Goodwill on acquisitions of
subsidiaries is disclosed as a separate line item in the
consolidated statement of financial position and is carried at cost
less accumulated impairment losses. Goodwill represents the excess
of the fair value of the consideration over the fair values of the
identifiable net tangible and intangible assets acquired and is
allocated to cash-generating units. Gains and losses on the
disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Under IFRS 3 "Business
Combinations", goodwill arising on acquisitions is not subject to
amortisation but is subject to impairment testing or more
frequently if events or changes in circumstances indicate that it
might be impaired. Any impairment is recognised immediately in the
consolidated statement of total comprehensive income and is not
subsequently reversed. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are
separately identifiable cash inflows from other assets or groups of
assets (cash generating units).
(o)
Equity
Financial instruments issued by the
Group are treated as equity only to the extent that they do not
meet the definition of a financial liability. The Group's issued
ordinary shares are classified as equity instruments and recorded
as share capital at par value. Any excess of the consideration
received against par value is recorded as a premium, net of any
incremental fees. Shares subscribed are recorded as subscribed
share capital at their purchase value, net of any unpaid amount.
Subscribed shares are recorded as share capital, with excess of par
at share premium upon full payment of the purchase value or upon
happening of a contingent event.
Currency translation adjustments are
differences arising from translation of investments in overseas
subsidiaries. The differences arise from the translation of foreign
operations' results and financial positions from their respective
functional currencies to the Group's presentation
currency.
(p)
Earnings per share
The basic earnings per share is
calculated by dividing the net profit attributable to equity
holders of the Parent Company by the weighted average number of
Ordinary Shares in issue during the period, excluding any share
held in Treasury.
The diluted earnings per share would
be calculated by dividing the net profit attributable to ordinary
shareholders by the weighted average number of shares in issue
during the period, adjusted for potentially dilutive shares that
are not anti-dilutive. Diluted earnings per share has not been
presented as the Group is loss making.
(q)
Foreign currencies
Items included in the financial
statements of each of the Group's entities are measured using the
currency of the primary economic environment in which the entity
operates (the 'functional currency'). The condensed consolidated
interim financial statements are presented in GBP (£), which is the
Company's functional and the Group's presentational
currency.
Foreign currency transactions are
translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions, and
from the re-translation at period-end exchange rates of monetary
assets and liabilities denominated in foreign currencies, are
generally recognised in profit or loss and other comprehensive
income.
Foreign exchange gains and losses
are presented in the condensed consolidated interim statement of
total comprehensive income within 'other income'.
The results and financial position
of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that condensed consolidated interim statement of financial
position;
· income and expenses for each statement of profit or loss are
translated at average exchange rates (unless this is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions);
and
· all
resulting exchange differences are recognised in other
comprehensive income.
Goodwill and fair value adjustments
arising on the acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation and translated at
the closing rate if material.
(r)
Judgements or key sources of estimation
uncertainty
The preparation of the condensed
consolidated interim financial statements require management to
make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expense. Actual results might
differ from these estimates.
Critical judgments and estimates applied
follows:
· Critical estimates in the impairment of goodwill - Goodwill
arising on business combination is not amortised but is reviewed
for impairment on an ongoing basis, or more frequently if there are
indications that goodwill may be impaired. Goodwill acquired in a
business combination is allocated, at acquisition, to cash
generating units (CGUs) that are expected to benefit from the
business combination. An impairment loss is recognised for the
amount which the assets or CGUs carrying amount exceeds its
recoverable amount. The recoverable amount is higher of fair value,
reflecting market conditions, less costs to sell, and value in use
based on an internal discounted cash flow evaluation. Goodwill is
subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist. Goodwill recognised in
the period amounted to £2,939 relating to the Group's acquisition
of MRAL US Corporation, however full impairment was recognised in
the period to 30 June 2024, refer to Note 8;
· Expected credit loss (ECL) assessment - Allowance for ECLs is
maintained at a level considered adequate to provide for
uncollectible receivables. ECLs are unbiased probability-weighted
estimates of credit losses which are determined by evaluating a
range of possible outcomes and taking into account past events,
current conditions, and assessment of future economic
conditions.
The Group used historical loss
rates, recent default trends and estimated remaining loan terms to
determine the probability of default of the financial assets. The
recognised provision for ECL is disclosed in Note 11.
2
Revenue
|
|
|
Six Months
Ended
31 Dec 2024
£
|
|
Period
Ended
30 June
2024
£
|
|
Six Months
Ended
31 Dec 2023
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Interest revenue
|
|
7,493
|
|
27,243
|
|
12,234
|
|
Financial management fees
|
|
3,776
|
|
149,667
|
|
5,650
|
|
Loans fee revenue
|
|
-
|
|
48,000
|
|
-
|
|
|
|
11,269
|
|
224,910
|
|
17,884
|
Financial management fees, loans fee
revenue, and certain interest revenue pertain to services made to a
related party (see Note 15).
3
Administrative expenses
|
|
|
Six Months
Ended
31 Dec 2024
£
|
|
Period
Ended
30 June
2024
£
|
|
Six Months
Ended
31 Dec 2023
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Consultancy costs
|
|
179,284
|
|
103,774
|
|
52,254
|
|
Salaries and benefits
|
|
62,047
|
|
96,134
|
|
43,294
|
|
Accounting and auditor's
fee
|
|
35,104
|
|
67,038
|
|
3,532
|
|
Loan fee
|
|
20,000
|
|
-
|
|
-
|
|
Legal expenses
|
|
18,823
|
|
49,564
|
|
5,400
|
|
Loss on abandonment of
bond
|
|
18,535
|
|
-
|
|
-
|
|
Utilities
|
|
13,147
|
|
26,294
|
|
13,578
|
|
Rent
|
|
5,078
|
|
11,200
|
|
6,122
|
|
Taxes and licenses
|
|
4,801
|
|
12,510
|
|
5,935
|
|
Bank charges
|
|
4,393
|
|
7,965
|
|
3,934
|
|
Provision for credit loss
|
|
3,773
|
|
767
|
|
2,848
|
|
Insurance
|
|
1,418
|
|
3,434
|
|
1,231
|
|
Provision for credit loss -
non-trade receivable
|
|
-
|
|
177,194
|
|
-
|
|
Company secretarial
services
|
|
-
|
|
9,530
|
|
3,112
|
|
Investor relations
|
|
-
|
|
32,924
|
|
32,924
|
|
Other administrative
expenses
|
|
7,634
|
|
5,206
|
|
2,986
|
|
|
|
374,037
|
|
603,534
|
|
177,150
|
4
Other income
|
|
|
Six Months
Ended
31 Dec 2024
£
|
|
Period
Ended
30 June
2024
£
|
|
Six Months
Ended
31 Dec 2023
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Write-off of related party
accounts
|
|
1,439
|
|
-
|
|
-
|
|
Foreign exchange gain
(loss)
|
|
(537)
|
|
2,022
|
|
(612)
|
|
Corporate fee
|
|
-
|
|
230,584
|
|
-
|
|
Goodwill impairment
|
|
-
|
|
(2,939)
|
|
-
|
|
Corporate management fee
|
|
-
|
|
-
|
|
279,598
|
|
Other
|
|
10
|
|
-
|
|
-
|
|
|
|
912
|
|
229,667
|
|
278,986
|
Corporate fee of £230,584 relates to
non-refundable corporate processing fees charged to shareholders on
their share allotments.
Corporate management fee of £279,598
represents management services provided to Investment Evolution
Credit S.A. and its subsidiaries.
5
Remuneration
There were two (2) employees of the Group in the period under review, other
than the two (2) directors.
|
|
|
Six Months
Ended
31 Dec 2024
£
|
|
Period
Ended
30 June
2024
£
|
|
Six Months
Ended
31 Dec 2023
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Wages and salaries
|
|
60,645
|
|
129,929
|
|
66,966
|
|
Social security costs
|
|
5,792
|
|
12,651
|
|
5,764
|
|
Health insurance cost
|
|
4,818
|
|
9,565
|
|
4,723
|
|
Pension costs
|
|
-
|
|
-
|
|
-
|
Salaries and benefits amounting
to £33,219, £71,290, and £36,380 were
included as part of cost of services for the six months ended 31
December 2024 and 2023 and the period ended 30 June
2024.
Remunerations paid to key management
personnel are disclosed in Note 15 of the condensed consolidated
interim financial statements.
6
Income (loss) per share
The basic income (loss) per share is
calculated by dividing the income (loss) attributable to the owners
of the Parent Company by the weighted
average number of ordinary shares in issue during the period.
Diluted income (loss) per share is computed by dividing net income
(net loss) by the weighted-average number of shares of ordinary
shares, contingently issuable shares, convertible shares, and
certain common share equivalents outstanding for the period. Common
stock equivalents are only included when their effect is
dilutive.
For the six months ended 31 December
2024 and 2023 and the period ended 30 June 2024, the Group has no
potential dilutive shares.
|
|
|
Six Months
Ended
31 Dec 2024
£
|
|
Period
Ended
30 June
2024
£
|
|
Six Months
Ended
31 Dec 2023
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Income (loss) attributable to
ordinary shareholders, basic and diluted
|
|
(405,149)
|
|
(273,449)
|
|
41,830
|
|
Weighted Average Shares used to
compute earnings (loss) per ordinary share, basic
|
|
15,844,341
|
|
13,819,507
|
|
17,172,583
|
|
Basic and diluted earnings (loss) per share
|
|
(0.03)
|
|
(0.02)
|
|
0.002
|
7
Income tax
For the six months ended 31 December
2024 and 2023, income tax expense is recognised based on the
management's estimate of the effective annual tax rate expected for
the full financial year. The estimated annual tax rate is
25%.
For the full financial period ended
30 June 2024, charges for the period used the standard rate
applicable in the UK and in the US.
|
|
|
Period Ended
30
June 2024
£
|
|
|
|
(Audited)
|
|
|
|
|
|
Loss on ordinary activities before tax
|
|
(246,546)
|
|
|
|
|
|
Loss on ordinary activities before
tax multiplied by standard rate of income tax in UK of 25% and US
of 21%
|
|
(52,531)
|
|
UK Marginal relief
|
|
(246)
|
|
Items not deductible for tax
purposes
|
|
126,300
|
|
US tax losses utilised
|
|
(46,620)
|
|
Total tax charge for the period
|
|
26,903
|
The Group has cumulative losses of
approximately £14.5 million relating to MRAL US Corporation as
of 30 June 2024 and 31 December 2024, available to carry forward
against future taxable profits. A deferred tax asset has not been
recognised because of uncertainty over future taxable profits
against which the losses may be utilised.
8
Business acquisition
On 1 July 2023, the Parent Company
acquired MRAL US, a company under common control, which is
incorporated in the United States of America from Investment
Evolution Credit S.A. (IEC SA) via a stock purchase agreement for
£240,000. As payment for the acquisition, the Parent Company
settled its loan receivable, with the same amount, to IEC
SA.
The Group did not incur any other
costs related to the acquisition.
Details of the purchase
consideration, the net assets and goodwill are as
follows:
|
|
|
£
|
|
Purchase consideration
|
|
|
|
Fair value of receivables
settled
|
|
240,000
|
The assets and liabilities
recognised as a result of the acquisition are as
follows:
|
|
|
Fair value
|
|
|
|
£
|
|
|
|
|
|
Cash and cash equivalents
|
|
241,220
|
|
Trade and other
receivables
|
|
85,145
|
|
Other current assets
|
|
1,322
|
|
Trade and other payables
|
|
(3,277)
|
|
Provision for credit
losses
|
|
(8,886)
|
|
Non-recourse distribution from loans
receivables
|
|
(32,844)
|
|
Funding advance for new
loans
|
|
(45,619)
|
|
Net identifiable assets
acquired
|
|
237,061
|
|
Goodwill
|
|
2,939
|
|
|
|
240,000
|
|
|
|
£
|
|
|
|
|
|
Goodwill
|
|
2,939
|
|
Impairment
|
|
(2,939)
|
|
Net
|
|
-
|
Goodwill amounting to £2,939 was
recognised on the acquisition of MRAL US (dba Mr. Amazing Loans),
being the excess of the purchase consideration over the fair value
of net assets acquired. For the period ended 30 June 2024, full
impairment was recognised on Goodwill.
9
Other current assets
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Input VAT
|
|
9,870
|
|
17,525
|
|
Prepayments
|
|
5,196
|
|
-
|
|
Security deposit
|
|
1,342
|
|
1,330
|
|
|
|
16,408
|
|
18,855
|
Input VAT relates to VAT on costs on
expenses incurred from January to September 2024, VAT returns of
which were submitted in December 2024. Refer to Note 11 for further
information regarding VAT receivables.
10
Deferred financing cost
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Deferred share issue cost
|
|
174,000
|
|
47,896
|
|
Deferred bond issue cost
|
|
-
|
|
18,535
|
|
|
|
174,000
|
|
66,431
|
Deferred share issue costs consist
of fees and expenses incurred in connection with the sale of the
Group's common stock, including the legal, consulting, accounting,
printing, and other offering-related costs. Upon completion of the
Initial Public Offering or share issuance process, these
offering/issue costs are charged against the net proceeds from the
offering and share issuances.
As at 30 June 2024, bond issue costs
incurred relate to expenses associated with the potential issuance
of bonds and will be capitalised as a component of the bond
liability at bond issue date. These expenses were incurred by
engaging professionals to assist in the issuance of bonds. However,
in December 2024, the Board decided to change strategy and no
longer proceed with issuing bonds. As at 31 December 2024, the
related bond issue costs were written off.
For further information, please
refer to Note 21.
11
Trade and other receivables
Trade and other receivables consist
of:
|
As
at 31 December 2024
|
|
(Unaudited)
|
|
|
Loan fee
receivable
£
|
|
Advances to related
parties
£
|
|
Other
receivables
£
|
|
Total
£
|
|
|
|
|
|
|
|
|
|
|
Gross amount
|
48,150
|
|
-
|
|
34,258
|
|
82,408
|
|
Provision for credit
losses
|
(1,129)
|
|
-
|
|
-
|
|
(1,129)
|
|
Net amount
|
47,021
|
|
-
|
|
34,258
|
|
81,279
|
|
As
at 30 June 2024
|
|
(Audited)
|
|
|
Loan fee
receivable
£
|
|
Advances to related
parties
£
|
|
Other
receivables
£
|
|
Total
£
|
|
|
|
|
|
|
|
|
|
|
Gross amount
|
58,435
|
|
3,874
|
|
210,953
|
|
273,262
|
|
Provision for credit
losses
|
(1,222)
|
|
-
|
|
(176,917)
|
|
(178,139)
|
|
Net amount
|
57,213
|
|
3,874
|
|
34,036
|
|
95,123
|
As of 30 June 2024, advances to
related parties include a balance of £3,874 owed by Investment
Evolution Credit S.A. to the Parent Company deemed collectible. In
November 2024, Investment Evolution Credit S.A. went into
liquidation. As at 31 December 2024, the advances were deemed
uncollectible and have been written off.
A reconciliation of the allowance
for credit losses consists of the following:
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Beginning
|
|
178,139
|
|
8,886
|
|
Provision of credit
losses
|
|
3,773
|
|
177,961
|
|
Write-offs
|
|
(180,783)
|
|
(8,708)
|
|
Ending
|
|
1,129
|
|
178,139
|
The following is an age analysis of
past due receivables:
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Current
|
|
55,436
|
|
89,229
|
|
1 - 30 days past due
|
|
-
|
|
176,917
|
|
31 - 60 days past due
|
|
-
|
|
1,648
|
|
Over 90 days past due
|
|
26,972
|
|
5,468
|
|
|
|
82,408
|
|
273,262
|
The following is a breakdown of
gross loan principal amounts outstanding in each US state for the
Group's current active loan portfolio, excluding uncleared
collections:
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Illinois
|
|
21,570
|
|
26,862
|
|
California
|
|
17,704
|
|
22,637
|
|
Georgia
|
|
4,637
|
|
2,866
|
|
Nevada
|
|
3,385
|
|
4,070
|
|
Texas
|
|
563
|
|
558
|
|
New Jersey
|
|
291
|
|
1,385
|
|
Missouri
|
|
-
|
|
57
|
|
|
|
48,150
|
|
58,435
|
Net other receivables include a
balance of £26,791 relating to a refund claim for input VAT
incurred on transactions completed before the Group's VAT
registration which commenced on 1 December 2023. Senior management
believe the submission to be in final review stages and a refund
should be received soon. As at 31 December 2024, the Group has not
yet received the refund.
Further, cash being held by the
payment partner of MRAL US was under dispute and has been
transferred to other receivables and provided a full provision. The
Group issued a legal demand letter against the payment partner. As
at 31 December 2024, the Group has written off the entire
receivable.
12
Cash and cash equivalents
|
|
|
As
at
|
|
As
at
|
|
|
|
31
December 2024
£
|
|
30
June 2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Cash in banks and on hand
|
|
37,151
|
|
101,110
|
Cash in banks earn interest at
prevailing bank deposit rates. Interest income earned from banks
amounted to £368, £1,056, and £514 for the periods ended 31
December 2024, 30 June 2024, and 31 December 2023,
respectively.
13
Funding advances of new loans and Non-recourse distribution from
loans receivable
In 2023, IEC US received
$100,000 funding advance from Full Circle
Financial Services (FCFS) to fund new consumer loans in accordance
with the Funding and Participation Agreement and related
agreements. Under the Funding and Participation Agreement, no
interest is charged by FCFS to the Company, with an agreed split of
interest revenue from the loans distributed to FCFS along with
monthly distributions of the principal of consumer loan repayments
which reduce the funding advance.
An overview of the FCFS funding
advance, loan funding and future distributions process is provided
below:
a) Funding Advance for New Loans
The funds received are initially
recorded under the "Funding Advance for New Loans" account, to be
used for the purpose of funding new consumer loans as outlined in
the specified agreements.
b) Funded Loan Assets
When new consumer loans are funded
by the Company, the assets from consumer loans are recorded in a
separate subaccount under Loans Receivable of the
Company.
c) Funded Loan Allocation to Non-Recourse Account
Following the funding of loans, the
"Non-Recourse Distributions from Loans Receivable" account is used
to record the future distributions that will be sent to FCFS from
the consumer loan principal repayments. This account is not a debt
of the Company and is classified as a 'non-recourse' liability, as
FCFS only has rights to these specific consumer loan assets with
distributions made when the consumer makes loan
repayments.
d) Funded Loan Defaults
In cases of individual loan
defaults, the outstanding capital is reassigned from the Company to
FCFS, reducing the "Non-Recourse Distributions on Loans Receivable"
account. This structure insulates the Company from potential credit
losses, negating the need for credit loss provisions on these
loans.
e) Funded Loan Revenue Sharing and Principal
Distributions
Interest revenue from these loans is
shared between the Company and FCFS as per the Funding and
Participation Agreement. The Company also remits principal
repayments received from consumers to FCFS, resulting in a decrease
in the Non-Recourse Distributions on Loans Receivable
account.
As at 31 December 2024, there were
fifteen (15) consumer loans funded totaling £50,283 with a final
account balance of £42,502, net of principal payments received from
consumers and remitted to FCFS.
As at 30 June 2024, there were
twenty-one (21) consumer loans funded totaling £66,445 with a final
account balance of £52,325, net of principal payments received from
consumers and remitted to FCFS.
14
Trade and other payables
|
|
|
As at
|
|
As at
|
|
|
|
31 December
2024
£
|
|
30 June
2024
£
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
|
|
Amounts owing to a
shareholder
|
|
150,000
|
|
100,000
|
|
Accounts payable
|
|
98,970
|
|
80,343
|
|
Income taxation
|
|
26,903
|
|
26,903
|
|
Accrued expenses
|
|
26,248
|
|
35,056
|
|
|
|
302,121
|
|
242,302
|
On average trade and other payables
are settled within one month.
15
Related
party transactions
Following are the outstanding
balances and transactions, as at and for the six months ended 31
December 2024 and 2023 and the period ended 30 June 2024, with
related parties. Transactions between the Parent Company and its
subsidiaries, which are related parties, have been eliminated and
are not disclosed on this note.
|
|
As
at and for the six months ended
31
December 2024
|
|
|
Note
|
|
Amount
|
|
Receivable
(Payable)
|
|
|
|
|
£
|
|
£
|
|
Directors and Shareholders
|
|
|
|
|
|
|
Consulting fees and salaries
(b, e, f, g, h and
i)
|
|
|
278,575
|
|
(4,462)
|
|
Loans (c)
|
|
|
50,000
|
|
(150,000)
|
|
Share issuances (b, e, g and h)
|
|
|
216,000
|
|
-
|
|
|
As at and for the period
ended
30 June
2024
|
|
|
Note
|
|
Amount
|
|
Receivable
(Payable)
|
|
|
|
|
£
|
|
£
|
|
Related parties under common control
|
|
|
|
|
|
|
Loan (a)
|
|
|
240,000
|
|
-
|
|
Financial management fee
|
2
|
|
60,000
|
|
3,874
|
|
Loans fee revenue (a)
|
2
|
|
48,000
|
|
-
|
|
Interest revenue (a)
|
2
|
|
5,980
|
|
-
|
|
|
|
|
|
|
|
|
Directors and Shareholders
|
|
|
|
|
|
|
Consulting fees and salaries
(b and e)
|
|
|
401,497
|
|
|
|
Corporate fee
|
4
|
|
230,584
|
|
-
|
|
Loan (c)
|
14
|
|
100,000
|
|
(100,000)
|
|
Share issuances (b and e)
|
|
|
47,061
|
|
-
|
|
|
As at and for the six months
ended
31 December
2023
|
|
|
Note
|
|
Amount
|
|
Receivable
(Payable)
|
|
|
|
|
£
|
|
£
|
|
Related parties under common control
|
|
|
|
|
|
|
Loan (a)
|
|
|
240,000
|
|
-
|
|
Corporate management fee
|
4
|
|
279,598
|
|
63,874
|
|
|
As at and for the six months
ended
31 December
2023
|
|
|
Note
|
|
Amount
|
|
Receivable
(Payable)
|
|
|
|
|
£
|
|
£
|
|
Directors and Shareholders
|
|
|
|
|
|
|
Consulting fees and salaries
(b, e, and g)
|
|
|
126,000
|
|
-
|
|
Share issuances (b and e)
|
|
|
47,061
|
|
-
|
a. On 1 June 2023, the Group entered into a £240,000 loan
agreement with Investment Evolution Credit S.A. with a loan
repayment date of 31 May 2024 and 29.9% interest per annum.
Interest and 20% loan origination fee earned from the loan amounted
to £5,980 and £48,000, respectively. The loan, interest, and loan
fee were subsequently settled through intercompany settlements
resulting in £nil balances as at 31 December 2024, 30 June 2024 and
31 December 2023.
b. On 31 July 2024, Sam Prasad resigned as Director and CFO and
COO of the Group. Sam Prasad was paid £nil, £50,000, and
£10,000 as consulting fees for the periods ended 31 December 2024,
30 June 2024 and 31 December 2023. Sam Prasad also received a
combined salary and bonus amounting to £23,000, £49,000, and
£26,000 for the periods ended 31 December 2024, 30 June 2024 and 31
December 2023. As at 31 December 2024, 30 June 2024 and 31
December 2023, Sam Prasad owns 4,350,394 (6.70%), 1,350,394
(8.57%), and 1,175,394 (9.46%) of the Parent Company.
c. On 20 June 2024, the Group entered into a £100,000 unsecured
and non-interest-bearing loan agreement with Sam Prasad with a loan
repayment date of 5 July and 30 September 2024. On 24 September
2024, the loan was restructured for a total draw down of £200,000,
of which £150,000 and £100,000 are outstanding as at 31 December
2024 and 30 June 2024, respectively.
d. On 31 December 2024 and 30 June 2024, the Parent Company
waived an intercompany balance of £49,283, and £193,673,
respectively, owing from its subsidiary, MRAL US
Corporation.
e. On 31 December 2024, Paul Mathieson resigned as Director of
the Group and previously on 30 September 2024 resigned as Chairman
and CEO of the Group. For the periods ended 31 December 2024, 30
June 2024, and 31 December 2023, he was paid £161,000, £295,252,
and £87,000 respectively, as consulting fees and salaries. As at 31
December 2024, £21,750 remains outstanding and on 30 June 2024 and
31 December 2023 no amount was owed to the director. As at 31
December 2024, 30 June 2024 and 31 December 2023, Paul Mathieson,
director of the Parent Company, owns 24,237,913 (37.31%), 6,387,913
(43.39%), and 6,387,913 (51.42%), respectively, of the Parent
Company
f.
Glendys Aguilera, appointed director of the Parent
Company since December 2023, received a combined salary and bonus
amounting to £25,000 and £26,000 for the periods ended 31 December
2024 and 30 June 2024, respectively. For the periods ended 31
December 2024 and 30 June 2024, Glendys received directors fee
amounting to £950 and £2,000, respectively.
g. Neil Patrick, another appointed director of the Parent Company
since December 2023, received director's fee amounting to £19,500,
£13,312, and £3,000 for the periods ended 31 December 2024, 30 June
2024, and 31 December 2023, respectively. As at 31 December 2024
and 30 June 2024, £4,462 and £1,707, respectively, remains
outstanding.
h. On 1 December 2024, Marc Howells signed a consultancy service
agreement with the Parent Company. For the period ended 31 December
2024, he received consulting fees amounting to £30,750.
i.
For the period ending 31 December 2024, Richard
Leaver, who was appointed as Board Advisor on 1 October 2024, and
Bob Mennie, who became the non-board CFO on 1 August 2024, received
consulting fees of £6,000 and £12,375, respectively.
16
Equity
Details of contributed capital as at
31 December 2024 and 30 June 2024 are as follows:
|
|
As at 31 December
2024
(Unaudited)
|
|
|
Number of
shares
|
Share
capital
|
Share
premium
|
Total
|
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
|
Ordinary share issuances at £.005
par value
|
64,963,671
|
324,818
|
318,206
|
643,024
|
|
|
As at 30 June
2024
(Audited)
|
|
|
Number of
shares
|
Share
capital
|
Share
premium
|
Total
|
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
|
Ordinary share issuances at £.005
par value
|
15,760,975
|
78,805
|
180,026
|
258,831
|
The Group was incorporated on 24 May
2023 and during the period, had the following issuances of ordinary
shares to fund the Company's business plan and general working
capital use.
a.
12,377,303 ordinary shares were issued to various shareholders at
par; and
b. 45,000
shares were issued to various shareholders at £0.200 per share, which is comprised of £0.005 par value and
£0.195 share premium.
On 10 November 2023, 2,538,672
shares were subscribed at £0.20 per share to raise a total of
£507,734 as a conditional placement for the Group's IPO, of which
225,000 shares were initially accounted for as subscription
receivable and were subsequently paid prior to full issuance
on
12 December 2023.
On 25 April 2024, 800,000 shares
were issued at £0.20 per share, raising a total of
£160,000.
On 6 August 2024, 500,000 shares
were issued at £0.20 per share, raising a total of
£100,000.
On 31 October 2024, 45,752,696
shares were issued at £0.01 per share raising a total of
£457,526.
On 7 November 2024, 250,000 shares
were issued at £0.01 per share through the Broker Offer, raising a
total of £2,500.
On 31 December 2024, 2,700,000
additional shares were issued £0.01, raising a total
£27,000.
As at 31 December 2024 and 30 June
2024, incremental costs related to share issuance and offering
recorded against share premium amounted to £328,937 and £527,686,
respectively.
17
Financial instruments
The following tables set out the
categories of financial assets and liabilities held by the
Group:
|
|
As at
|
|
As at
|
|
|
31 December
2024
|
|
30 June
2024
|
|
|
£
|
|
£
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Financial assets
|
|
|
|
|
Cash and cash equivalents
|
37,151
|
|
101,110
|
|
Trade and other
receivables
|
81,279
|
|
95,123
|
|
Other current assets (excluding
Input VAT)
|
1,342
|
|
1,330
|
|
|
119,772
|
|
197,563
|
|
|
As at
|
|
As at
|
|
|
31 December
2024
|
|
30 June
2024
|
|
|
£
|
|
£
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Financial liabilities
|
|
|
|
|
Trade and other payables
|
302,121
|
|
242,302
|
|
Non-recourse distributions from
loans receivable
|
42,502
|
|
52,325
|
|
|
344,623
|
|
294,627
|
Financial risk management
The Company's existing financial
assets and liabilities arise directly from the Group's operations.
There is minimal risk with these financial assets and liabilities
as they relate to day-to-day business expenditure and are invoiced
in Sterling, the Group's functional currency and the directors
believe their carrying value reasonably equate to fair
value.
Financial risk factors
The Group has recently been
incorporated and has limited operating history upon which
prospective investors may assess the likely performance of the
Group. The Group's success will depend upon the Directors' ability
to identify and manage future opportunities that may
arise.
Market risk
(a) Foreign exchange
risk
The Group has exposure to market
risk - foreign exchange risk arising from future commercial
transactions and recognised financial assets and liabilities not
denominated in GBP. The Group's income stream is exposed to
fluctuation in the US Dollar exchange rate against GBP.
This risk is managed predominantly
via policies approved by the Directors. Market risks are identified
and evaluated closely by directors. Directors provide written
principles for overall risk management, as well as policies
covering specific areas. These are reviewed monthly and discussed
at Director's meetings.
The Group's exposure to foreign
currency risk as at 31 December 2024 and 30 June 2024,
respectively, expressed in GBP follows:
|
|
As at
31 December
2024
|
|
A at
30 June
2024
|
|
|
£
|
|
£
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Liabilities
|
|
|
|
|
Trade and other payables
|
62,695
|
|
51,343
|
The aggregate net foreign exchange
gains recognised in profit or loss were:
|
|
Six months
ended
31 December
2024
|
|
Period
ended
30 June
2024
|
|
Six months
ended
31 December
2023
|
|
|
£
|
|
£
|
|
£
|
|
|
(Unaudited)
|
|
(Audited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Realised foreign exchange gain
(loss)
|
(1,499)
|
|
1,816
|
|
(1,195)
|
|
Unrealised foreign exchange
gain
|
962
|
|
206
|
|
583
|
|
Total net foreign exchange gain
(loss) recognised in profit before tax
|
(537)
|
|
2,022
|
|
(612)
|
A +/-10% shift in the USD exchange
rate would be expected to have an impact on profit before tax as
follows:
|
|
Impact on profit before
tax
for the six months
ended
31 December
2024
Increase
(Decrease)
|
|
Impact on profit before
tax
for the six months
ended
31 December
2024
Increase
(Decrease)
|
|
|
$
|
|
€
|
|
+10%
|
(4,489)
|
|
-
|
|
-
10%
|
4,489
|
|
-
|
|
|
Impact on profit before
tax
for the period
ended
30 June
2024
Increase
(Decrease)
|
|
Impact on profit before
tax
for the period
ended
30 June
2024
Increase
(Decrease)
|
|
|
$
|
|
€
|
|
+10%
|
(3,701)
|
|
-
|
|
-
10%
|
3,701
|
|
-
|
|
|
Impact on profit before
tax
for the six months
ended
31 December
2023
Increase
(Decrease)
|
|
Impact on profit before
tax
for the six months
ended
31 December
2023
Increase
(Decrease)
|
|
|
$
|
|
€
|
|
+10%
|
(7,883)
|
|
(24,520)
|
|
-
10%
|
7,883
|
|
24,520
|
(b) Interest rate
risk
The Group does not have
interest-bearing liabilities.
(c) Price risk
The Group is not exposed to either
commodity or equity securities price risk.
Strategic risk
The Group's ability to generate
profit (which cannot be guaranteed) will be reliant upon the
performance of investments and the successful execution of the
business strategy (in both its current form and as amended from
time to time). The Group seeks to mitigate this risk by
implementing a sustainable business model. The Board of Directors
meet at least four times a year to revisit the Group's strategy and
align it with current market and economic conditions.
Regulatory and legal risk
As the Group expands its activities,
the Group will become increasingly obligated to comply with the
laws, rules, regulations and policies of the jurisdictions in which
the Group operates.
Reputational risks
Reputational risk is the risk
resulting from failure to meet the reasonable expectations of
stakeholders regarding any event, behaviour, action, or inaction
undertaken by the Group, its employees, or its affiliated entities.
The Group seeks to ensure its business minimises reputational risk
through the Board of Directors policies, procedures and controls
for corporate governance and risk management.
Credit risk
Credit risk is the risk that the
Group will not be able to recover receivables from the counterparty
when due. Credit risk is managed by the experienced Executive
Management Team and Board of Directors.
The Group's credit risk arises from
cash and cash equivalents, and trade and other receivables. Cash in
bank is covered by insurance limits, which minimises the Group's
exposure to credit risk. Advances to related parties are transacted
with related parties with no history of default and are in good
financial condition. Credit risk is assessed as low considering
balances are collectible from the counterparties involved. Trade
receivables where there is no reasonable expectation of recovery
are written off. The Group's portfolio of loan receivables is with
consumers living throughout the United States and consequently,
such consumers' ability to honour their instalment contracts may be
affected by economic conditions in these areas.
The maximum exposure to credit risk
at the end of the reporting period is the carrying amount of cash
and cash equivalents, and trade and other receivables. The Group
applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected credit loss allowance for all
trade and other receivables. To measure the expected credit losses,
trade, and other receivables have been grouped on shared credit
risk characteristics and the days past due. The Funding and
Participation Agreement structure insulates the Group from
potential credit losses, negating the need for credit loss
provisions on these loans. Refer to Note 11 for the details of the
provision for credit loss and age analysis of past due
receivables.
Liquidity risk
Liquidity risk is the risk that the
Group will fail to meet its obligations associated with its
financial liabilities. The Group's approach to managing liquidity
is to ensure that it will have sufficient funds to meet its
liabilities when due without incurring unacceptable losses. In
doing this, the Board of Directors reviews sensitivity analysis to
different stress scenarios to simulate and analyse cash flows,
ensuring the Group has sufficient liquidity. A material and
sustained shortfall in the Group's cash flow could undermine the
Group's credit rating, impair investor confidence, and also
restrict the Group's ability to raise funds.
The table below summarises the
maturity profile of the Group's financial liabilities as
at
31 December 2024 and 30 June 2024,
respectively, based on contractual undiscounted
payments:
|
|
|
As at 31 December
2024
|
|
|
|
Less than One
year
|
One to two
years
|
Two to five
years
|
Total
|
|
|
|
£
|
£
|
£
|
£
|
|
|
|
(Unaudited)
|
|
Trade and other payables
|
|
302,121
|
-
|
-
|
302,121
|
|
Non-recourse distributions from
loans receivable
|
|
-
|
-
|
42,502
|
42,502
|
|
|
|
302,121
|
-
|
42,502
|
344,623
|
|
|
|
As at 30 June
2024
|
|
|
|
Less than One
year
|
One to two
years
|
Two to five
years
|
Total
|
|
|
|
£
|
£
|
£
|
£
|
|
|
|
(Audited)
|
|
Trade and other payables
|
|
242,302
|
-
|
-
|
242,302
|
|
Non-recourse distributions from
loans receivable
|
|
-
|
-
|
52,325
|
52,325
|
|
|
|
242,302
|
-
|
52,325
|
294,627
|
Capital risk
Capital risk encompasses the
possibility that the Group might lack adequate capital resources to
sustain its operations. The Group follows a cautious strategy in
capital management. The Board of Directors consistently assesses
budgets and forecasts, including capital and liquidity ratios, to
ensure prudent management of capital resources.
18 Directors' advances, credit and
guarantees
There are no directors' advances,
credit, or guarantees in the period, other than those disclosed in
Note 15, Related Party Transactions.
19
Capital management policy
The Directors' objectives when
managing the Group's capital are to safeguard the Group's ability
to continue as a going concern to provide returns for Shareholders
and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The capital
structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, share
premium, and reserves.
20
Capital commitments
There were no capital commitments as
at 31 December 2024 and 30 June 2024, respectively.
21
Contingent assets or liabilities
As at 30 June 2024, the Parent
Company has a contingent liability to pay its Corporate Broker,
Axis Capital Markets Limited, a sales commission of 5% on the gross
aggregate value of the equity or IEC bond funds raised from
investors introduced by Axis. This commission was to be deducted
from the proceeds of the placing. In addition, there was a
contingent obligation to pay a sales commission of 1% on the gross
aggregate value of the equity funds raised for which Axis did not
procure subscribers, also to be deducted from the proceeds of the
placing.
However, on 5 January 2025, the
Parent company mutually agreed to terminate the Corporate Broker
agreement with Axis Capital Markets Limited effective 8 November
2024. As at 31 December 2024, there were no contingent assets or
liabilities.
22
Ultimate controlling party
As at 31 December 2024 and 30 June
2024, respectively, there was no ultimate controlling party of the
Group.
23
Subsidiaries consolidated
The subsidiaries included in the
condensed consolidated interim financial statement of the Group are
detailed below. No subsidiary undertakings have been excluded from
the consolidation.
|
Company
|
Place of Business
|
Class of share capital held
|
Holdings
|
Principal Activities
|
|
Direct (%)
|
Indirect
(%)
|
|
MRAL US Corporation
(previously Investment Evolution
Corporation)
|
USA
|
Ordinary
|
100
|
-
|
Providing unsecured online consumer
loans
|
|
MRAL UK Group Ltd
(previously IEC Credit Group Ltd)
|
UK
|
Ordinary
|
100*
|
-
|
Management consultancy other than
financial management
|
|
MRAL UK Ltd
(previously IEC Credit Ltd)
|
UK
|
Ordinary
|
100*
|
-
|
Credit granting by
non-deposit-taking finance houses and other specialist consumer
credit grantors
|
*The Parent Company holds 1,000 £1.00 ordinary shares, unpaid
at period end
MRAL UK Group Ltd was incorporated
on 25 May 2023 and has not yet operated from its inception to the
period ended 31 December 2024. To streamline and simplify its
corporate structure, management resolved the voluntary dissolution
of MRAL UK Group Ltd on 31 December 2024, awaiting approval from
its application from Companies House. Prior to the dissolution,
MRAL UK Group Ltd wholly owned MRAL UK Ltd.
Upon dissolution of MRAL UK Group
Ltd, the Parent company assumed full ownership of MRAL UK Ltd. MRAL
UK Ltd was incorporated on 29 May 2023 and has not yet operated
from its inception to the period ended 31 December 2024.
On 5 March 2024, Parent company
acquired MRAL Spain Corporation. However, on 18 June 2024, the
Parent company terminated its Spain Implementation Agreement with
MRAL Spain Corporation and voluntarily dissolved its dormant wholly
owned subsidiary on 24 June 2024. MRAL Spain Corporation did not
commence any operations and has no assets or
liabilities.
24
Nature of the Group unaudited condensed consolidated interim
financial information
The condensed consolidated interim
financial statements do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act of 2006.
The financial statements
have not been reviewed, nor audited.
25
Significant post-balance sheet events
On 1 January 2025, Marc Howells and
Richard Leaver were appointed to the Board of the Company as
Executive Director and Chief Executive Officer, and Independent
Non-Executive Director, respectively.
There have been no other significant
events after the reporting period 31 December 2024 up to the date
of authorisation of these financial statements, that would require
adjustment of, or disclosure in, the financial
statements.
