TIDMSYME
RNS Number : 1360U
Supply @ME Capital PLC
27 July 2020
27 July 2020
Supply@Me Capital plc
(The "Company" or "SYME")
Trading Update
Development of Dual-Funding Model
Supply@ME Capital plc, the innovative fintech platform which
provides the Inventory Monetisation(c) service to European
manufacturing and trading companies, is pleased to provide an
update on its Inventory funding process and Client company
originations.
The SYME platform works by aligning Client companies
(manufacturing and trading companies) seeking to monetise part of
their inventory for cash, with Inventory Funders (debt funds, banks
and similar financial institutions), that invest through the
platform into portfolios of inventory assets via Securitisation
Special Purpose Vehicles.
Highlights
1 The Company is now progressing two funding routes to achieve Inventory Monetisation:
o Open-Funding: The Company's securitisation note programme,
being managed and placed by StormHarbour Securities LLP, has seen
an increase in its list of interested investors to 16;
o Self-Funding: potential partnerships are progressing with two
leading Italian banking institutions that intend to use the SYME
platform to service their existing customers, whilst also providing
the inventory funding capital.
2 Client companies already originated and awaiting inventory
funding stand at 97 (up from 66 at 31 December 2019). A further 272
new Client companies have been introduced by one of the two new
Self-Funding Partners and are currently undergoing SYME's rigorous
assessment and due diligence processes.
3 Discussions with a large UK financial institution relating to
a UK inventory monetisation pilot programme are progressing. Target
to start the pilot by the end of 2020.
Details:
1. Inventory Funding Process
Based on positive discussions with a number of large
institutions interested in investing through SYME's platform into
inventory portfolios, the Company has further developed and refined
its multi-channel inventory funding offer. SYME's funding offer now
comprises Open-Funding and Self-Funding models.
Open-Funding
a. Client companies are originated by the Company and its commercial partners;
b. Inventory funding is delivered by securitisation programmes
subscribed, typically, by institutional investors. The first such
product is the inventory-backed note programme referred to in the
Company's Interim statement published on 30 June 2020, and
currently being placed by StormHarbour Securities LLP.
Storm Harbour's placing is progressing, notwithstanding the
impact of COVID-19. Potential Inventory Funders involved in the
securitisation programme are now working closely with Supply@ME to
assess the client companies that form the inventory portfolio as
the next step towards funding. There are now 16 institutional
investors (mostly global asset managers) interested in
progressing/investing through the process.
SYME has also started a process with two major credit rating
agencies with the objective of rating future securitisation
programme issuances. The Company believes that an independent
third-party credit rating would further widen the group of
potential inventory funders able to invest.
Self-Funding
This is an important new development of the funding model and
has been requested by a number of interested institutional
investors: Client companies and Inventory funding are both provided
by the financial institution itself. SYME is now developing the
Self-Funding model with two leading Italian Banks and is targeting
a first Agreement during Q3 2020.
a. Client companies are originated from within the existing
customer base of the Inventory Funder (such as Banks and other
institutions);
b. The Inventory funding is also provided directly by the
institution - effectively funding their own customers through the
platform.
The Self-Funding approach enables banks and other institutions
to offer the SYME service direct to their customers, such that the
banks and their client base can benefit from the systems,
assessment and monitoring processes of the SYME inventory
monetisation platform.
2. Client Company Origination
Demand for Supply@ME Inventory Monetisation(c) from pipeline
client companies remains high.
The average target client company typically has EUR100m of
turnover. The average target size for each inventory monetisation
transaction is circa EUR15m.
As reported in the latest interim financial statements, the
Company's portfolio of client companies has continued to grow. This
Portfolio is expected to increase significantly should the
Self-Funding transaction model described above proceed because the
funding institutions would add-in many of their own existing
clients into the portfolio.
The tables below show growth in origination from December 2019
to June 2020 together with a breakdown of the sectors in which the
client companies operate.
Value (Euro) Dec 19 31.3.20 30.6.20
Gross origination 972m 1.22bn 1.43bn
------- -------- --------
Number of client companies 66 82 97
------- -------- --------
Sectoral concentration %
Retail 20,62%
-------
Materials 17,53%
-------
Capital Goods 13,40%
-------
Food, Beverage & Tobacco 12,37%
-------
Food & Staples Retailing 9,28%
-------
Consumer Durables & Apparel 8,25%
-------
Automobiles & Components 5,15%
-------
Pharmaceuticals, Biotechnology
& Life Sciences 3,09%
-------
Technology Hardware & Equipment 3,09%
-------
Energy 2,06%
-------
Consumer Services 1,03%
-------
Health Care Equipment & Services 1,03%
-------
Household & Personal Products 1,03%
-------
Media & Entertainment 1,03%
-------
Telecommunication Services 1,03%
-------
A further 272 potential new Client companies have been
introduced by one of the two Self-Funding Partners mentioned
above.
3. Roll-out of the service into the UK and other new geographies
Supply@ME is working with a large, UK financial institution to
arrange a first UK inventory monetisation pilot (up to 10 UK client
companies) by the end of 2020, whereby a positive outcome may lead
to a first Self-Funding agreement in the UK. In parallel, the
Company is in discussions with several other potential UK
commercial partners to commence origination of the first UK client
companies.
Further feasibility studies have been initiated to assess
roll-out of the Inventory Monetisation service in other
geographies, as per the Company's business plan. As part of this,
Supply@ME is also analysing opportunities in non-European
regions.
Contacts
Alessandro Zamboni, CEO, Supply@ME Capital plc:
investors@supplymecapital.com
Paul Vann, Walbrook PR Limited, +44 (0)20 7933 8780
Brian Norris, Cicero/AMO, +44 (0)20 7947 5317
Notes
Supply@ME enables businesses to generate cashflow, without
incurring debt, by monetising their existing stock. Before a
business has found an end customer for its inventory, the Supply@ME
platform enables them to sell part of their stock and receive cash
immediately, thus boosting their working capital. The Supply@Me
service enables strong companies to improve their working capital
cycle. SYME does not monetise inventory for companies in financial
difficulty or with inventory that they are struggling to sell.
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END
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