SUPPLY@ME CAPITAL PLC Annual Report
& Accounts 2021
Contents
01
Strategic Report
05. Highlights
- Chief Executive Officer's Statement
- The Market
- The Business Model Canvas
- Our platform
- Engaging with our stakeholders
- Financial review
- Sustanability
- Principal risks and uncertainties
02
Corporate Governance Report
51. 2021 Director Information
56. Statement of current Compliance
with QCA Corporate Governance Code
- Report of the Nomination Committee
- Report of the Audit Committee
- Directors Remuneration Report
- Report of the Directors
03
Financial Statements
102. Independent Auditor's Report
- Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2021
- Consolidated Statement of Financial Position as at 31 December 2021
112. Consolidated Statement of Changes in Equity for the Year Ended 31 December 2021
114. Consolidated Statement of Cash Flows for the Year Ended 31 December 2021
116. Company Statement of Financial Position as at
31 December 2021
- Company Statement of Changes in
Equity for the Year Ended 31 December 2021
- Notes to the Company Financial Statements for the Year Ended 31 December 2021
04
Company Information
171. Company Information
Annual Report & Accounts 2021 | 3 |
01 Strategic Report
Highlights
2021 was a formative year. Across the Group, being Supply@ME Capital Plc (the "Company") and its subsidiaries, we have built into our business significant value by way
of technological improvements, welcoming new talent, strengthening our internal processes and the acquisition of TradeFlow Capital Management Ltd (TradeFlow Capital Management Pte. Ltd). Achieving these important milestones in succession has laid the foundations for new growth in 2022.
Our proprietary Inventory Monetisation platform has an intrinsic value and has generated significant interest from other operators, from banks to debt funders, to improve or facilitate their own inventory backed
or based facilities. Accordingly, we launched our White-label initiative at the end of
August 2021.
Leveraging technology and people developments, we continued to fine-tune our warehouse goods monetisation structure, limiting the number of client companies under analysis. While this initially resulted in a reduction of revenue, over the longer term we believe it has resulted in an improvement of the fundamentals required to scale our unique business model.
We continued to adopt a 'test and learn' approach. We are now eager to put these lessons into practice.
4
Financial KPIs
Total revenue | Gross (loss)/profit | Adjusted operating (loss)1 | |
£0.5m | (£0.3m) | (£4.4m) | |
£1.1m in 2020 | £0.4m Gross profit in 2020 | (£1.4m) in 2020 | |
(Loss) before tax | Total assets | Net (liabilities) | |
(12.2m) | 10.6m | (£1.4m) | |
(£2.8m) in 2020 | £3.3m at 31 December | (£0.5m) at 31 December | |
2020 | 2020 | ||
Operational KPIs | |||
In-transit monetisation | Net growth in capital under | Warehoused Goods monetisation | |
Net growth in capital under | Pipeline | ||
management in 2021 | management in Q1 2022 | ||
4% | 17% | £164.8m | |
The increase in the net growth in Q1 2022 is a combined increase | The pipeline KPI represents the current | ||
from the existing TradeFlow USD and EURO funds. The movement | potential value of warehoused goods | ||
was due to the volatility seen in other asset classes over this | inventory to be monetised rather than | ||
period, and the removal of travel restrictions and COVID-19 | pipeline revenue expected to be earned by | ||
controls in many parts of the world, both of which resulted | the Group. As such, this provides a good | ||
in a rise of new investors looking for fixed income alternative | indicator of the level of demand for the | ||
investments. | Groups warehoused goods monetisation | ||
services. This pipeline represent the value | |||
as at most practical date possible prior to | |||
the issue of this annual report | |||
(being 24 May 2022). |
1 Adjusted operating loss is the operating (loss) before deemed cost of listing, acquisition related costs and impairment charges.
5
Chief Executive Officer's
Statement
The need for Supply@ME, and the need for the services which this business offers, is even greater now than when we launched on the London Stock Exchange in 2020. 2021 was a year of global crisis and disruption. Business confidence for many fell to new lows and the focus was on surviving COVID-19. Supply chains have had to be rebuilt stronger: "just in time" has given way to "just in case". This did not happen overnight. Local driver shortages have exacerbated global problems. Supply@ME has learnt considerably from the experiences of the past two years, and as a result we believe the future is very bright.
We Completed the Acquisition of TradeFlow
The addition of TradeFlow to our Group provides the ability to offer an unrivalled inventory monetisation journey, allowing us to offer a unique, and end-to-end, inventory monetisation journey from exporters to importers, followed by a unique warehouse goods monetisation service.
With a broader footprint and customer base in Singapore, TradeFlow gives us a clear launch pad for the Asian marketplace and links to key trading hubs globally.
We Clarified the Business Model
We distinguished the pure FinTech business from the inventory funding structure as the provider of each inventory monetisation transaction. Details of the current business model can be found on page 14 including those activities that are expected to be delivered by the Group in their capacity as inventory servicer, and those that are expected to be delivered by segregated stock (trading) companies
which will be owned by the Global Inventory Fund (the "Fund").
While the TradeFlow acquisition complemented the existing business model, the value of what Supply@ ME has built, in terms of the technology and talent, also became apparent. Our proprietary Platform has an intrinsic value and has generated significant interest from other operators, from banks to debt funders, to improve or facilitate their own inventory- backed or based facilities. Accordingly, we launched our White-label initiative at the end of August 2021. We have also invested heavily, both in terms of time and resources, upgrading the underpinning architecture and how it can avail of TradeFlow's technology within its TradeFlow+ system. Our discussions with potential inventory funders regarding the introduction of an equity line into the capital structure of each inventory monetisation led to, and was addressed by, the launch of the Fund as announced in August 2021. This Fund can serve as an equity partner as well as on a standalone basis. The Fund also leverages the funding structure of TradeFlow Capital, a further benefit to, and justification for, the acquisition.
What We Built
Business confidence in 2021 stymied our progress in some areas. Like many of our shareholders and partners, I expected us to have completed several inventory monetisations by the year end. However, the impact that COVID-19 had on business priorities for our partners, and which multiple lockdowns had on the speed of decision making, was significant. While we could not control this, our business and offering are stronger with the benefit of additional time and the feedback we have been able to incorporate into the Platform.
For Supply@ME, 2021 was a formative year.
We Secured Funding and Additional Investment
The proceeds from the two funding arrangements entered into during 2021 allowed the Company to complete the acquisition of TradeFlow (our first M&A deal), as well as to continue the important investment into the assets of the Group, including the intellectual property rights over the platform, and to invest in recruiting our new leadership team. The recent Capital Enhancement Plan, announced in April 2022, was fully subscribed by the long- term investor Venus Capital SA ("Venus Capital") which proved that professional investors believe in the inventory monetisation business model. We also intend to enable existing shareholders of the Company to acquire new ordinary shares on the same terms as Venus Capital. This combination of retail and institutional investment will provide the
Group with both commercial and financial support for the next phase of the Group's development.
We Built Our Leadership Team
The Group's unwavering approach is to build a scalable business which exemplifies the strong regulatory requirements required of a listed company. In this regard, we believe shareholders are in good hands thanks to the experience and dedication of our Executive Directors, Alessandro Zamboni, John Collis and Thomas (Tom) James and our leadership team comprising our Chief Financial Officer, our Chief People Officer, our Group Head of Enterprise Risk Management, our Group Head of Operations and Transformation and our Group Head of Origination. Further information
on our executive directors and members of our leadership team can be found on page 51 and 23, respectively. Additionally, the Company learned from, and leveraged, the deep corporate governance experience of our previous Chairman, James (Jim) Coyle. The Board and the Nomination committee are now focused on evaluating potential candidates for the Chair and Non-Executive Director positions with capabilities and experience that will complement those of the existing executive and Non-Executive Directors in order to future proof the Board as the Group enters its next stage of development.
6
7
Annual Report & Accounts 2021 Chief Executive Officer's Statement
What We Learned
As the impact of COVID-19 crystallised for many businesses, the minds of Chief Financial Officers (CFOs) at companies of every size have increasingly turned to how to survive and thrive in the 'new normal'. There is a universal need to find alternative solutions to manage the risks which the pandemic has brought about. Some of these are obvious and indeed are the same which Supply@ME was created to address. Businesses in every country in which we operate, or may wish to operate, are retaining more inventory for longer. Monetising this inventory and alleviating the increased cost holds an obvious and growing appeal.
However, there are also new risks which have arisen and gained prominence. Supply@ME is well placed to support businesses to find solutions to many of these. From working on the digitisation of operations to inventory cost optimisation and understanding client and supplier risk, the experience of the past two years has emphasised the depth of services which our platform can offer. Monetisation at the core will be combined with other services to bring us closer to our clients. There is clear evidence that the service developed by Supply@ME offers not only a means to allow corporates to sell goods but also a real commercial partnership which allows our clients to better manage their data, using this to monetise their inventory, optimise their supply chain, and so further receive value from the same information generated.
There is much more to come, and we will continue to adopt a 'test and learn' approach. We are now eager to put these lessons into practice.
Future Plans - Looking Ahead
There is now a new era of digitalisation and digitisation of supply chains. The speed at which we have reached this point has been accelerated by the recent geo-political crisis and the rise of new technology and business paradigms (such as Web 3.0).
It is clear that corporates need to improve their processes. They are having to set new objectives for their supply chains with greater focus on resiliency, risk management and efficiency - optimising inventory management and, enhancing the cash position as a key indicator for credit evaluation. In our experience, corporate treasurers are moving from a reactive approach to a more proactive and dynamic view.
For in-transit transactions, we are observing progress towards a new vision of a modernised global trade finance ecosystem, with networks and players focussed on digitalising parts of the trade and finance processes, providing a framework for digitally connecting and facilitating interoperation among these networks through sets of shared standards, processes, protocols, and guiding principles. An integral part of this new vision is the "interoperability layer", a global framework of standards and policies that enables participants in the trade ecosystem
to seamlessly connect to both present and future networks.
Our Group wants to play the key role in this huge target addressable market promoting its unique business proposition:
- Through our Platform, as an enabler of an innovative commercial model which allows each Corporate to manage new strategic objectives for their supply chain management (resiliency, cash optimisation, inventory efficiency and digitisation of the trade process regarding both international and domestic trade deals); and
- For investors, generating a unique opportunity in the alternative capital markets, presenting an attractive risk/reward proposition within an innovative asset class aimed at supporting the real economy.
We believe this can be achieved along global supply chains, both during the export-to-importin-transit journey and during the warehoused goods days- in-inventory phase, when goods are stored and enabling CFOs to more efficiently manage the core assets of their business.
This can be realised and scaled, by leveraging our unique business model, underpinned by the technology and the market expertise that our team has. The positive results achieved regarding client companies' origination activities and inventory funding routes expansion are further evidence of this.
It is fair to say the financial results for the year ended 31 December 2021 do not provide the full picture of the vast amount of work that the Supply@ME team have undertaken to continue to develop the Group and the Platform for future success.
Alessandro Zamboni
Chief Executive Officer and Executive Director
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Supply@ME Capital plc published this content on 06 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 June 2022 17:11:03 UTC.
