TIDMWISE
RNS Number : 9562T
Wise PLC
30 November 2021
30 November 2021
Wise plc
Unaudited results for the six months ended 30 September 2021
"We're on a mission to make moving and managing money across
borders faster, easier, cheaper and more transparent for everyone,
everywhere.
Each quarter we strive to make progress on this mission. Over
the first half of this year we've improved our products and
engineered away substantial points of friction in the payments
process, enabling us to sustainably lower prices while continuing
to invest in growing the business for the long term. So a virtuous
circle of investment continues, and our service gets faster, better
and cheaper than ever for our personal and business customers.
Whilst we have made significant progress, millions of people and
businesses continue to be overcharged and poorly served by banks
and other payment providers."
Kristo Käärmann, Co-founder and Chief Executive Officer
Highlights for the six months ended 30 September 2021 (1)
We've made progress on our Mission
- We managed to reduce the average price our customers pay for
moving money across borders to 0.62% in Q2 FY22, down 7bps compared
to the average prices in Q4 FY21;
- Our payments got faster too. 40% of all transfers were delivered instantly in Q2 FY22;
- We enhanced our Wise Account; excitingly we launched our
Assets feature for customers in the UK, and made the account more
useful for businesses around the world, who can now issue company
cards to their employees and manage their expenses on Wise;
- We've increased our platform partners with a further 10
partnerships commencing, taking the total
number to 30, and
- We expanded our customer base: we served 3.9 million active
customers in Q2 FY22, an increase of 7% from Q1 FY22 or 23% as
compared to Q2 FY21;
- Combined, this progress is driving our growth: we transferred
over GBP34 billion for our customers in the period, 44% more than
H1 FY21 (GBP24 billion).
We've become a stronger business, as we continue to generate
healthy gross margins whilst reducing prices for our customers and
investing in our long term growth
- While growing volume by 44%, we also engineered and optimised
away marginal costs and passed back the savings to customers;
- As a result, whilst take rate reduced by 6bp to 0.75%, revenue
grew by 33% to GBP256 million;
- Gross profit grew by 46% to GBP174 million, with gross profit
margin expanding from 62% to 68%;
- Adjusted EBITDA margin of 24% was slightly lower than the 26%
margin last year due to planned investment in our teams and
products;
- Free Cash Flow remains healthy, growing 39% to GBP59.0M compared to H1 FY21.
Outlook
- Based on our progress and current outlook for volumes and
price drops, we now expect annual revenue growth for FY22 to be
mid-to-high 20s on a percentage basis;
- As a result of the larger than anticipated cost savings
flowing through into price reductions in the first half, we
continue to expect the take rate to be slightly lower in the second
half and for the gross margin to be c.65-67% for FY22, subject to
foreign exchange-related costs continuing to remain broadly
stable.
(1) All comparisons are against the six months ending 30
September 2020, unless otherwise stated.
Financial information
Selected financial Information:
Half-year ended 30 September
YoY
2021 2020 Movement (%)
Revenue 256.3 192.2 33%
Gross profit 173.8 119.2 46%
Gross profit margin 67.8% 62.0% 5.8 pps
Adjusted EBITDA(1) 60.6 50.6 20%
Adjusted EBITDA margin(2) 23.6% 26.3% -2.7 pps
Free cash flow (FCF)(1) 59.0 42.3 39%
FCF conversion(3) 97.4% 83.6% 13.8 pps
=================================== ============== ============== =================
(1) Refer to note 1.4 of the financial statements for definitions
of adjusted EBITDA and FCF.
(2) Adjusted EBITDA as a proportion of revenue.
(3) FCF as a proportion of Adjusted EBITDA.
Growth metrics:
FY22 FY21 YoY Movement (%)
Q1 Q2 H1 * Q1 Q2 H1 * Q1 Q2 H1
Customers (million)(1) 3.7 3.9 - 2.8 3.2 - 29% 23% -
Personal (million) 3.4 3.7 - 2.7 3.0 - 28% 22% -
Business (million) 0.22 0.23 - 0.14 0.16 - 56% 44% -
Volume Per Customer(2)
(GBP thousand) 4.5 4.6 - 3.8 4.2 - 19% 10% -
Personal (GBP thousand) 3.6 3.7 - 3.0 3.4 - 18% 6% -
Business (GBP thousand) 18.6 19.4 - 17.5 17.7 - 6% 9% -
Volume(3) 16.4 18.0 34.4 10.7 13.2 23.9 54% 36% 44%
Personal (GBP billion) 12.4 13.5 25.9 8.2 10.4 18.6 50% 30% 39%
Business (GBP billion) 4.0 4.5 8.5 2.4 2.8 5.3 66% 57% 61%
Revenue 123.5 132.8 256.3 86.3 105.9 192.2 43% 25% 33%
Personal (GBP million) 96.9 103.4 200.3 70.8 87.0 157.8 37% 19% 27%
Business (GBP million) 26.6 29.4 56.0 15.5 18.9 34.4 72% 56% 63%
Cross-currency
revenue take rate -10
(%) 0.66% 0.64% 0.65% 0.75% 0.74% 0.74% -9 bps bps -9 bps
Take rate (%) 0.75% 0.74% 0.75% 0.81% 0.80% 0.81% -6 bps -6 bps -6 bps
======================== ===== ===== ===== ===== ===== ===== ====== ====== ======
* We do not report the number of customers or volume per customer
on a half-yearly basis.
(1) Total number of unique customers who have completed at least
one cross currency transaction in a given period.
(2) Average volume per each active customer, calculated as total
volume divided by total active customers in the period.
(3) Total cross-currency funds converted by customers.
Total fees on international transfers as a proportion of volume.
Total revenue as a proportion of volume.
Results presentation
A presentation of the half-year results will be held at 9.30am
Tuesday 30 November at Wise's offices in Shoreditch.Please contact
Owner Relations if you wish to attend. A live webcast will be
available via our website, www.wise.com/owners , and will be
available for on-demand replay shortly after the presentation
concludes.
Enquiries
Martin Adams - Head of Owner Relations
martin.adams@wise.com
Abigail Daniels - Global Head of Public Relations
press@wise.com
Brunswick Group
Charles Pretzlik / Sarah West / Samantha Chiene
Wise@brunswickgroup.com
+44 (0) 20 7404 5959
About Wise
Wise is a global technology company, building the best way to
move money around the world. With the Wise account people and
businesses can hold over 50 currencies, move money between
countries and spend money abroad. Large companies and banks use
Wise technology too; an entirely new cross-border payments network
that will one day power money without borders for everyone,
everywhere. However you use the platform, Wise is on a mission to
make your life easier and save you money.
Co-founded by Kristo Käärmann and Taavet Hinrikus, Wise launched
in 2011 under its original name TransferWise. It is one of the
world's fastest growing tech companies and is listed on the London
Stock Exchange under the ticker, WISE.
Over 11 million people and businesses have used Wise since it
was founded. Today we process over GBP5.5 billion in cross-border
transactions every month, saving customers over GBP1 billion a
year.
Forward looking statements and other important information
This report may include forward-looking statements, including
within the meaning of the US Private Securities Litigation Reform
Act of 1995, which are based on current expectations and
projections about future events. These statements may include,
without limitation, any statements preceded by, followed by or
including words such as "target", "believe", "expect", "aim",
"intend", "may", "anticipate", "estimate", "plan", "project",
"will", "can have", "likely", "should", "would", "could" and any
other words and terms of similar meaning or the negative thereof.
These forward-looking statements are subject to risks,
uncertainties and assumptions about Wise and its subsidiaries. In
light of these risks, uncertainties and assumptions, the events in
the forward-looking statements may not occur. Past performance
cannot be relied upon as a guide to future performance and should
not be taken as a representation that trends or activities
underlying past performance will continue in the future. No
representation or warranty is made or will be made that any
forward-looking statement will come to pass.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by
these forward-looking statements. Details of the potential risks
and uncertainties affecting the Wise Group are described in the
Group's filings with the London Stock Exchange, including in the
TransferWise Ltd Annual Report and Accounts 2021.
The forward-looking statements in this report speak only as at
the date of this report.Wise expressly disclaims any obligation or
undertaking to update, review or revise any forward-looking
statements contained in this report and disclaims any obligation to
update its view of any risks or uncertainties described herein or
to publicly announce the results of any revisions to the
forward-looking statements made in this report, whether as a result
of new information, future developments or otherwise, except as
required by law.
An update from Kristo, our Co-founder and CEO
We started Wise 10 years ago with the mission to make
international banking faster, easier, cheaper and more transparent
for everyone, everywhere. We've come a long way since then,
including some significant strides forward in the last six months:
we lowered costs and dropped prices (even faster than expected!),
our payments got faster, we developed more features for businesses,
initiated more platform partnerships and we launched our exciting
new 'Assets' feature for customers in the UK.
Wise: infrastructure built for speed and efficiency
Improving our infrastructure allows us to lower our unit costs,
letting us charge substantially less than leading traditional banks
and consistently below many payment companies. We proudly charge
our customers a transparent fee for each of our services, without
cross-subsidising between customers, products or routes. We
calculate the precise costs of our offering, and we charge the
customer that amount plus a margin which we reinvest in the
business. When our costs go down, we aim to lower our prices as
soon as possible. We do this because we can, because it's fair, but
also because we believe that over time this approach will ensure we
create the lowest cost way to move money around the world.
In the most recent quarter, this average customer price was just
0.62%, a reduction of 7 basis points as compared to the average
prices in Q4 FY21. This is a substantial reduction for millions of
customers, with an exceptional 5 basis points coming in the most
recent quarter. This reflects the amazing work from the team to
reduce costs and our commitment to invest in sustainably lower
prices.
We're continuously increasing the speed of our transfers as we
develop our infrastructure, and in the most recent quarter 40% of
our transfers were instant, 58% were delivered in under one hour,
and 86% arrived in under 24 hours. We're able to estimate the time
of delivery with an accuracy of nearly 80% which our customers
value as important information. This compares to the two to five
business days, on average, it takes a traditional bank to complete
an international transfer with a high level of uncertainty on the
exact time-frame for delivery.
Our coverage took an important step forward in the period as we
launched in India, allowing Indian residents to send money to 40+
countries at the real exchange rate, with lower and more
transparent fees. We then went on to make sending money to India a
lot faster and more convenient. With the rollout of payouts via
Unified Payments Interface (UPI), Wise customers can also send
money to India instantly, and without needing to know their
recipient's bank details.
Product and platform enhancements
Our Wise account continues to drive our growth as demonstrated
by the 33% increase in our customer balances from GBP3.7 billion as
at the year end to almost GBP5 billion as at 30 September 2021.
The Wise account enables our personal and business customers to
send, receive, hold, convert, and spend money in a growing number
of currencies, all in one place with only a few taps or clicks. In
the past six months we made the account even more useful: UK
customers can now invest with the UK launch of Assets. Assets give
customers a potential return on their balance held with Wise by
holding it in an index fund, while still being able to spend and
send in an instant as though it were held as cash. We're also very
pleased to be announcing today the launch of cards in Canada.
Our Wise Business proposition improved in the period with the
launch of a number of new features, including the ability to attach
receipts and notes to card transactions; and enhanced controls such
as the ability for an account holder to delegate tasks, payment
approvals and assign spending limits to accountants and team
members.
Additionally, we have made further progress in serving customers
through our platform partners. Wise Platform allows many more
people and businesses to conveniently access Wise's cheap, fast and
transparent international money transfers. Over the last six months
we are delighted to have announced partnerships with Google Pay,
Sable, Shinhan Bank, Temenos and Thought Machine, while enhancing
the service provided with existing partners, most notably with
Monzo and OnJuno. It's still early days but we're excited to help
these Partners and their customers with their cross-border
needs.
We've been investing in our infrastructure for a long time, and
there is still a lot more to build. But it seems to be working. Our
most recent Net Promoter Score was 75, Wise is rated 4.6/5 on
TrustPilot with over 135,000 reviews and scores 4.7 out of 5 on the
Apple App Store. This helps drive our growth in customers, as
approximately 68% of new customers came through "word-of-mouth". In
the last six months customers moved GBP34 billion through our
platform, which represents a 44% growth over the same period last
year.
But there are still many trillions moved outside of our
platform, largely through the world's banks. So we have a long way
to go to help these customers and achieve our Mission. Onwards.
Kristo.
A financial update from Matt, our CFO
Our mission is to create the best way to move and manage money
around the world. We have a relentless focus on solving the
problems facing our customers whilst building a sustainable and
profitable business to support this mission. In doing this, and in
particular, bringing transparency and fairness into how we price
our products, we've found a common ground of creating value for our
customers and also for our shareholders. A fundamental part of our
mission is to reduce prices where we have engineered process
friction and costs away, or as a result of scaling.
In the second quarter of FY22, 3.7 million personal customers
and 230 thousand business customers used Wise Transfer and the Wise
account to move and manage money across borders. This was an
increase of 22% in the number of personal customers and 44% in the
number of business customers as compared to the same period last
year which were 3.0 million and 160 thousand respectively.
Across the first six months of the year, we processed GBP34.4
billion in cross-border payments (GBP23.9 billion in H1 FY21) which
was a 44% increase as compared to the same period last year. Our
personal customer and business customer volumes grew by 39% and 61%
to GBP25.9 billion and GBP8.5 billion respectively.
The volume growth was faster than the growth seen in the number
of customers, driven by the average volume per customer. This was
significantly lower in the first quarter of last year due to the
impact of the COVID-19 pandemic on customer demand for
international payments, but quickly rebounded in the second quarter
of prior year.
Furthermore, businesses typically send larger volumes compared
to personal customers, and, as they represent a growing proportion
of the total number of customers, the average volume per customer
for the Group is gradually increasing and in the second quarter it
stood at its highest point to date of GBP4.6 thousand.
In the first six months of FY22 we generated GBP256.3 million in
revenue, a 33% increase versus GBP192.2 million in the same period
last year. Revenue is largely a function of the volume our
customers move and the prices we charge them.
Our cross-currency take rate reduced by 9bps to 0.65% in the
first six months of FY22 as compared to 0.74% in the same period in
the prior year. This was primarily as a result of the price drops
mentioned above, however, the comparison to the prior period is
also impacted by route mix volatility at the onset of the pandemic
where we saw more volume being moved on higher priced routes. The
reductions in price were enabled by reduced unit costs from more
favourable terms with our banking partners and lower FX costs. With
price reductions being funded in this way we are able to grow the
business and strengthen our market position while generating the
same level of gross profit to reinvest into our future.
The total take rate reduced by 6bps to 0.75% in H1 FY22 as
compared to 0.81% in the same period in FY21, and is in line with
the 0.75% in H2 FY21. This was less than the decline in the
cross-currency take rate due to the growth in other fees which now
represent 13% of our revenue for the period. The popularity of the
Wise account has seen growth in other fees such as interchange fees
on the account's debit card and fees on domestic transfers.
We produced GBP173.8 million of gross profit, a 46% increase as
compared to GBP119.2 million in the same period last year and
equivalent to a 68% gross margin (H1 FY21: 62%). This was due to
cost of sales only increasing by 13% to GBP81.2 million from
GBP71.8 million in H1 FY21. Increase in cost of sales is less than
the increase in volumes over the same period due to the
aforementioned reductions in unit costs that we passed on to our
customers. This growth in gross profit, which is in line with our
growth in volume, demonstrates that reductions in price can be made
whilst sustaining our ability to invest.
We have three primary areas of investment focus: marketing, our
product and sustainably lowering prices; all of which we believe in
the long term drive more volume and more scale. This means we get
to a lower unit cost and even more capacity to invest. This is how
we create sustainable shareholder value.
Administrative expenses increased 56% to GBP152.2 million in the
first six months of FY22 (H1 FY21: GBP97.6 million) which is
primarily due to increase in employee costs and outsourced services
and other administrative costs.
Employee costs increased GBP17.1 million or 25% to GBP84.8
million in the first six months of FY22 (H1 FY21: GBP67.7 million)
as we continue to invest in our team to support further growth. We
have expanded the size of the team by 688 people or 32% over the
last year, with 2,883 Wisers working to deliver our mission at the
end of H1 FY22.
Outsourced services and other administrative costs grew 101% to
GBP58.3 million as compared to GBP29 million in H1 FY21. This
increase was primarily due to additional costs incurred as part of
becoming a public company, additional IT and marketing investments,
as well as other costs relating to travel and events returning
post-pandemic.
Capitalisation in the first six months reduced versus the same
prior last year by 74% to GBP2.5 million (GBP9.6 million in H1
FY21). We expect our capitalisation to remain broadly at this lower
level going forward. This change does not impact our cash flows and
we continue to expand and invest in our engineering team.
Our Adjusted EBITDA margin was 24% for the period (H1 FY21: 26%)
which corresponds to GBP60.6 million of Adjusted EBITDA (H1 FY21:
GBP50.6 million) and a 20% increase over the prior year which
reflects our commitment to investment in future growth whilst
maintaining sustainability in our approach.
In the first six months of FY22 our profit before tax was
GBP18.8 million compared to GBP20.0 million in the same period last
year. This level of profit was slightly lower than the previous
year as we continue to reinvest the majority of the additional
gross profit delivered in the period while also incurring
exceptional costs in the completion of our direct listing.
Free cash flow increased 39% over the prior year to GBP59.0
million (H1 FY21: GBP42.3 million) giving a free cash flow
conversion ratio of 97% relative to Adjusted EBITDA (H1 FY21: 84%).
This year-on-year increase in free cash flow reflects the
underlying growth in Adjusted EBITDA.
As at 30 September 2021 we held GBP5.4 billion of cash and
highly-liquid investment grade assets, up 32% from the end of FY21
(GBP4.1 billion). The majority of these assets are used to cover
the GBP4.9 billion of Wise account customer deposits (GBP3.7
billion at the end of FY21), which we keep safeguarded and readily
available. We also hold GBP344.6 million of Wise's "own cash",
which is increasing thanks to the cash generating qualities of the
business we've built.
We are well capitalised for the future and as at 30 September
2021, our group eligible capital of GBP230.7m is significantly
above the minimum requirements set by our regulators around the
world. We expect Wise to be subject to the new capital regime for
investment firms in the UK known as Investment Firm Prudential
Regime (IFPR). This will become effective from 1 January 2022
prospectively. Wise is well in excess of the upcoming new
requirement and we do not expect any impact to our capital
management policy in the near term as a result of this change.
In summary, our growth has been fuelled by building products and
features that customers love and recommend. We re-invest our
margins into improving our product and customer experience,
marketing to help spread the word, and sustainably lowering prices.
Our focus on our mission will not change as we continue to grow and
scale, and neither will our focus on building a strong, sustainable
and cash-generating business that is best placed to address the
evolving needs of our customers and, in so doing, deliver
shareholder value.
We're on a mission that will take a long time. It'll take
investment, patience and commitment to our strategy. But it's
working.
Financial outlook
Based on our progress and on our current outlook for both
volumes and price drops in the second half of the year, we now
expect annual revenue growth for FY22 to be mid-to-high 20s on a
percentage basis.
As previously guided, our strategy of reducing costs first and
then lowering our prices means that the take rate is expected to be
slightly lower in the second half of FY22 compared to the first
half. Our expectation for the gross margin for FY22 also remains
unchanged at c.65-67%, subject to foreign exchange-related costs
continuing to remain broadly stable.
Share issuance
As disclosed in the prospectus in respect of our direct listing
on the London Stock Exchange in July 2021, several legacy employee
share plans existed which, following admission, were to be closed
to any further options or awards being granted under any of these
employee share plans. As at the date of the prospectus, 93,959,944
vested and unvested options were outstanding under these legacy
employee share plans.
Wise operates an Employee Share Trust which can be used for the
purpose of providing benefits to employees and former employees of
the Group, including satisfying options and awards granted under
the Company's employee share plans through the provision of Class A
Shares.
The Employee Share Trust held 48,852,622 Class A Shares as at
the date of the prospectus, which were available to satisfy the
exercise or vesting of options and awards under the Company's
employee share plans. Comparing the number of Class A Shares held
in the Employee Share Trust with the number of options outstanding
indicated 45,107,322 additional Class A shares which may, at some
time, be required to provide the benefit offered under the legacy
employee share plans.
Today, we have announced our intention to issue 30,000,000 Class
A shares to be allotted to and held in the Employee Share Trust
until they are required to satisfy the exercising of vested
options. We will review our need to issue Class A shares in
relation to legacy and new employee share plans on at least an
annual basis. In line with best practice for employee benefit
trusts, the Employee Share Trust will not, without prior
shareholder approval, hold Class A shares representing more than 5%
of Wise's then issued share capital.
Adoption of the UK Corporate Governance Code
Following the direct listing on the London Stock Exchange in
July 2021, we have formally adopted the UK Corporate Governance
Code as published by the Financial Reporting Council (FRC) and will
be making the required disclosures in our FY22 Annual Report and
Accounts.
Responsibility statement of the directors in respect of the
interim financial statements
We confirm that to the best of our knowledge:
-- the condensed set of financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting as contained
in UK-adopted IFRS;
-- the condensed set of financial statements give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Group;
-- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
On behalf of the Board of directors:
Kristo Käärmann, Director
Date: 30 November 2021
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Condensed consolidated statement of comprehensive income
for the half-year ended 30 September 2021 (unaudited)
Half-year ended 30
September
Note 2021 2020
================================================ ==== ========== ========
Revenue 2 256.3 192.2
Cost of sales 3 (81.2) (71.8)
Net credit losses on financial assets 3 (1.3) (1.2)
Gross profit 173.8 119.2
================================================ ==== ========== ========
Administrative expenses 3 (152.2) (97.6)
Interest income from investments and operating
assets 1.5 1.0
Interest expense from operating assets (2.7) (1.6)
Other income 0.9 1.1
Operating profit 21.3 22.1
================================================ ==== ========== ========
Finance expense (2.5) (2.1)
Profit before tax 18.8 20.0
================================================ ==== ========== ========
Income tax expense 5 (6.1) (5.4)
Profit for the period 12.7 14.6
================================================ ==== ========== ========
Other comprehensive income
Items that may be reclassified to profit
or loss:
Fair value (loss)/gain on investments (4.8) 0.2
Currency translation differences 0.4 0.3
Total other comprehensive (loss)/income (4.4) 0.5
================================================ ==== ========== ========
Total comprehensive income for the period 8.3 15.1
================================================ ==== ========== ========
Earnings per share
Basic (in pence) 8 1.33 1.56
Diluted (in pence) 8 1.23 1.43
The condensed consolidated statement of comprehensive income has
been prepared on the basis that all operations are continuing.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Condensed consolidated statement of financial position
as at 30 September 2021 (unaudited)
As at 30 As at 31
September March
2021 2021
=================================== ========== ========
Non-current assets
Deferred tax assets 74.6 56.7
Property, plant and equipment 6 26.3 24.0
Intangible assets 7 23.6 27.5
Trade and other receivables 9 28.4 15.1
Total non-current assets 152.9 123.3
=================================== ========== ========
Current assets
Current tax assets 1.4 1.1
Trade and other receivables 9 106.2 81.3
Short-term financial investments 10 1,182.1 737.5
Cash and cash equivalents 11 4,209.4 3,358.6
Total current assets 5,499.1 4,178.5
=================================== ========== ========
Total assets 5,652.0 4,301.8
=================================== ========== ========
Non-current liabilities
Deferred tax liabilities 0.3 2.0
Borrowings 13 94.4 95.2
Trade and other payables 12 37.8 22.6
Total non-current liabilities 132.5 119.8
=================================== ========== ========
Current liabilities
Borrowings 13 4.0 3.5
Current tax liabilities 1.9 2.0
Trade and other payables 12 5,175.0 3,891.2
Total current liabilities 5,180.9 3,896.7
=================================== ========== ========
Total liabilities 5,313.4 4,016.5
=================================== ========== ========
Equity
Share capital 15 9.9 9.4
Equity merger reserve (8.0) (8.0)
Share-based payment reserves 150.7 124.5
Own shares reserve (0.2) -
Other reserves (5.5) (0.7)
Retained earnings 193.8 162.6
Currency translation differences (2.1) (2.5)
Total equity 338.6 285.3
=================================== ========== ========
Total liabilities and equity 5,652.0 4,301.8
=================================== ========== ========
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Condensed consolidated statement of changes in equity
for the half-year ended 30 September 2021 (unaudited)
Note Share Equity Share-based Own shares Other Retained Currency Total
capital merger payment reserve reserves earnings translation equity
reserve reserves differences
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
At 1 April
2020 9.4 111.1 63.8 - 2.3 8.9 1.3 196.8
Profit for the
period - - - - - 14.6 - 14.6
Fair value
gain on
investments 10 - - - - 0.2 - - 0.2
Foreign
currency
translation
differences - - - - - - 0.3 0.3
Total
comprehensive
income for
the period - - - - 0.2 14.6 0.3 15.1
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Share-based
employee
compensation
expense - - 18.0 - - - - 18.0
Deferred tax
on
share-based
compensation - - 10.8 - - - - 10.8
Share options
exercises - 0.9 (2.6) - - 2.6 - 0.9
At 30
September
2020 9.4 112.0 90.0 - 2.5 26.1 1.6 241.6
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Profit for the
period - - - - - 16.3 - 16.3
Fair value
loss on
investments - - - - (3.2) - - (3.2)
Foreign
currency
translation
differences - - - - - - (4.1) (4.1)
Total
comprehensive
income for
the period - - - - (3.2) 16.3 (4.1) 9.0
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Reduction of
share capital - (120.0) - - - 120.0 - -
Share-based
employee
compensation
expense - - 18.9 - - - - 18.9
Deferred tax
on
share-based
compensation - - 15.8 - - - - 15.8
Share options
exercises - - (0.2) - - 0.2 - -
At 31 March
2021 9.4 (8.0) 124.5 - (0.7) 162.6 (2.5) 285.3
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Condensed consolidated statement of changes in equity (continued)
for the half-year ended 30 September 2021 (unaudited)
Note Share Equity Share-based Own shares Other Retained Currency Total
capital merger payment reserve reserves earnings translation equity
reserve reserves differences
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
At 1 April
2021 9.4 (8.0) 124.5 - (0.7) 162.6 (2.5) 285.3
Profit for the
period - - - - - 12.7 - 12.7
Fair value
loss on
investments 10 - - - - (4.8) - - (4.8)
Foreign
currency
translation
differences - - - - - - 0.4 0.4
Total
comprehensive
income for
the period - - - - (4.8) 12.7 0.4 8.3
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Issue of share
capital 15 0.5 - - (0.5) - - - -
Share-based
employee
compensation
expense - - 20.3 - - 1.0 - 21.3
Deferred tax
on
share-based
compensation - - 21.5 - - - - 21.5
Share options
exercises - - (15.6) - - 17.8 - 2.2
Disposal of
own shares - - - 0.3 - (0.3) - -
At 30
September
2021 9.9 (8.0) 150.7 (0.2) (5.5) 193.8 (2.1) 338.6
============== ==== ============ ======== =========== ========== =========== ========= ============ =======
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Condensed consolidated statement of cash flows
for the half-year ended 30 September 2021 (unaudited)
Half-year ended 30
September
Note 2021 2020
============================================= ==== ========= =========
Cash flows from operating activities
Cash generated from operations 14 1,257.3 1,012.0
Interest received 7.5 2.7
Interest expense paid (5.1) (2.7)
Corporate income tax paid (4.9) (0.8)
Net cash generated from operating activities 1,254.8 1,011.2
============================================= ==== ========= =========
Cash flows from investing activities
Payments for property, plant and equipment (3.2) (1.1)
Payment for intangible assets (3.1) (10.1)
Payments for financial assets at FVOCI (594.9) (222.7)
Proceeds from sale and maturity of financial
assets at FVOCI 149.0 41.1
Net cash used in investing activities (452.2) (192.8)
============================================= ==== ========= =========
Cash flows from financing activities
Proceeds from issues of shares and other
equity 2.2 0.9
Proceeds from borrowings 13 43.0 25.0
Repayments of borrowings 13 (43.0) (50.0)
Payments for lease liabilities (2.2) (2.4)
Net cash used in financing activities - (26.5)
============================================= ==== ========= =========
Net increase in cash and cash equivalents 802.6 791.9
============================================= ==== ========= =========
Cash and cash equivalents at beginning
of the period 11 3,358.6 2,077.6
============================================= ==== ========= =========
Effects of exchange rate changes on cash
and cash equivalents 48.2 2.6
Cash and cash equivalents at end of the
period 11 4,209.4 2,872.1
============================================= ==== ========= =========
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Notes to the interim condensed consolidated financial
statements
for the half-year ended 30 September 2021 (unaudited)
Note 1. Summary of significant accounting policies
1.1 General information and significant changes in the current
reporting period
Wise plc (the "Company") is a public limited company and is
incorporated and domiciled in England. The Company was incorporated
under the Companies Act 2006 on 18 February 2021 under the name
"456 Newco plc" and changed its name to Wise plc on 17 June 2021.
The address of its registered office is 6th Floor Tea Building, 56
Shoreditch High Street, London E1 6JJ. The principal activity of
the Company and its subsidiaries (the "Group") is the provision of
cross-border money transfer services.
Group Reorganisation and Listing
The Class A ordinary shares of the Company were admitted to
trading on the London Stock Exchange on 7 July 2021. In connection
with the listing of the Company on the London Stock Exchange on 7
July 2021, the following steps were completed on 22 June 2021:
-- the existing preferred and ordinary shares in Wise Payments
Ltd were re-designated as A Ordinary Shares and a share split was
undertaken;
-- the existing shareholders of Wise Payments Ltd were offered
the opportunity to elect to receive the B Shares, in addition to
their A Shares, to create a dual class share structure comprising A
Shares and B Shares. Such B Shares were issued by way of bonus
issue to such electing, existing shareholders;
-- the existing shareholders in Wise Payments Ltd entered into
the share for share exchange with Wise plc, pursuant to which Wise
plc acquired the entire issued share capital of Wise Payments Ltd
in exchange for the issue of matching Class A Shares, Class B
Shares and a non-voting redeemable preference share in Wise plc to
the existing shareholders (and any unexercised options and unvested
awards respectively over shares in Wise Payments Ltd were exchanged
for options over Class A Shares in Wise plc);
As a result of the restructure, Wise Payments Ltd transferred
its share-based payment obligations to Wise plc, who will be
responsible for the settlement of the share-based payment awards.
This transfer did not impact the post-restructure consolidated
results of the Group.
1.2 Basis of preparation and accounting policies
These condensed consolidated interim financial statements of the
Group have been prepared in accordance with Accounting Standard IAS
34 Interim Financial Reporting and the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
On 22 June 2021, in connection with the pre-listing
reorganisation as disclosed in note 1.1, Wise Payments Ltd
shareholders entered into a share-for-share exchange with the
Company. As a result, the Company became the ultimate parent
company of the Group and indirectly holds a 100% investment in Wise
Payments Ltd.
The restructure does not constitute a business combination under
IFRS 3 Business Combinations. The condensed set of consolidated
financial statements included in this interim report have been
prepared as a continuation of the consolidated financial statements
of Wise Payments Ltd. As such, the comparative and current period
reserves of the Group are adjusted to reflect the statutory share
capital, equity merger reserve and own share reserve of the Company
as if it had always existed.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
The interim report does not include all the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the Annual Report and
Accounts of Wise Payments Ltd (formerly known as TransferWise Ltd
and former ultimate parent company of the Group) for the year ended
31 March 2021 and any public announcements made by Wise plc during
the interim reporting period.
The interim report has not been audited or reviewed by auditors
pursuant to the Financial Reporting Council guidance on Review of
Interim Financial Information.
The accounting policies adopted are consistent with those of the
previous financial year, except for the adoption of new and amended
standards as set out below.
1.3 Changes in accounting policy and disclosures
Adoption of new or revised standards and interpretations
The following new or revised standards and interpretations
became effective for the Group from 1 April 2021:
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 -
Interest Rate Benchmark Reform - Phase 2
The adoption of the above amendment did not have a material
impact on the Group. There are no other new or revised standards or
interpretations that are effective for the first time for the
financial year beginning on or after 1 April 2021 that would be
expected to have a material impact on the Group.
New standards, amendments and interpretations not yet
adopted
The following amendments have been published by the IASB and are
effective for annual periods beginning on or after 1 January 2022;
the amendments have not been early adopted by the Group. None of
the amendments are expected to have a material impact on the Group
in the current or future reporting periods or on foreseeable future
transactions:
-- Amendments to IAS 37 - Onerous Contracts: Cost of Fulfilling a Contract
-- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use
-- Annual Improvements to IFRS (2018-2020 cycle): IFRS 9
Financial Instruments - Fees in the '10 per cent' Test for
Derecognition of Financial Liabilities
1.4 Alternative performance measures
The Group uses a number of alternative performance measures
("APMs") within its financial reporting. These measures are not
defined under the requirements of IFRS and may not be comparable
with the APMs of other companies.
The Group believes these APMs provide stakeholders with
additional useful information in providing alternative
interpretations of the underlying performance of the business and
how it is managed and are used by the Directors and management for
performance analysis and reporting. These APMs should be viewed as
supplemental to, but not a substitute for, measures presented in
the financial statements which are prepared in accordance with
IFRS.
-- Adjusted EBITDA: Measure of profitability which is calculated
as profit for the year excluding the impact of income taxes,
finance expense, depreciation and amortisation, share-based payment
compensation expense as well as exceptional items.
-- Free Cash Flow: Represents the net cash flows from operating
activities less the change in working capital (excluding the change
in collateral and other pass-through items), the costs of
purchasing property, plant and equipment, intangible assets
capitalisation and payments for leases.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 2. Segment reporting
Description of segment
The information regularly reported to the Board of Directors, who
are considered to be the Chief Operating Decision Maker, for the
purposes of resource allocation and the assessment of performance,
is based wholly on the overall activities of the Group. Based on
the Group's business model, the Group has determined that it has
only one reportable segment under IFRS 8, which is "Cross-border
payment services provider".
The Group's revenue, assets and liabilities for this one reportable
segment can be determined by reference to the Statement of Comprehensive
Income and Statement of Financial Position. The analysis of revenue
by type of customers and geographical regions, is set out in the
note below.
The Group determines revenue across the following major geographical
regions based on the customer address:
Half-year ended 30
September
2021 2020 *
===================================================== ======== ==========
Revenue by geographical regions
Europe 84.4 61.4
United Kingdom 57.9 42.6
North America 54.2 42.0
Asia-Pacific 46.1 32.8
Rest of the world 13.7 13.4
Total revenue 256.3 192.2
====================================================== ======== ==========
No individual customer contributed more than 10% to the total revenue.
* Comparative figures for the North America and Asia-Pacific regions
have been re-presented. In the 2021 Annual Report and Accounts,
a portion of revenue for North America was incorrectly presented
as Asia-Pacific revenues and vice versa.
The correct revenue for the full financial year 2021 for North
America was GBP89.8 million and for Asia-Pacific was GBP72.4 million.
This did not impact the total revenue or the split for any other
geographical regions.
Half-year ended 30
September
2021 2020
========================= ========= =========
Revenue by customer type
Personal 200.3 157.8
Business 56.0 34.4
Total revenue 256.3 192.2
========================== ========= =========
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
At the end of each period, the majority of the non-current assets
were carried by Wise Payments Ltd in the UK. The following geographical
breakdown is prepared based on the location of the non-current
asset:
As at 30 As at 31
September March
2021 2021
==================================================== ============ =========
Non-current assets by geographical region
United Kingdom 131.5 99.4
Rest of the world 21.4 23.9
Total non-current assets 152.9 123.3
===================================================== ============ =========
Note 3. Cost of sales and administrative expenses
Breakdown of expenses by nature:
Half-year ended 30
September
2021 2020
======================================================== ========== ========
Cost of sales
Bank and partner fees 66.6 54.4
Net foreign exchange loss and other product
costs 14.6 17.4
Total cost of sales 81.2 71.8
========================================================= ========== ========
Net credit losses on financial assets
Amounts charged to credit losses on financial
assets 1.3 1.2
Total net credit losses 1.3 1.2
========================================================= ========== ========
Expected credit losses are presented as net credit losses within
gross profit and subsequent recoveries of amounts previously
written off are credited against the same line item.
Half-year ended 30
September
2021 2020
============================================= ========= =========
Administrative expenses
Employee benefit expenses 84.8 67.7
Outsourced services and other administrative
costs 58.3 29.0
Depreciation and amortisation 11.6 10.5
Less: Capitalisation of staff costs (2.5) (9.6)
Total administrative expenses 152.2 97.6
============================================== ========= =========
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 4. Employee benefit expenses
Half-year ended 30
September
2021 2020
========================================== ========= =========
Salaries and wages 52.4 41.5
Share based payment compensation expense 20.6 18.0
Social security costs 8.8 6.8
Pension costs 1.6 0.9
Other employment taxes and insurance cost 1.4 0.5
Total employee benefit expense 84.8 67.7
=========================================== ========= =========
The average number of employees during the half-year ended 30
September 2021 was 2,683 (half-year ended 30 September 2020: 2,202
employees).
Note 5. Income tax expense
Half-year ended 30
September
2021 2020
====================== ========= =========
Current tax charge 9.9 7.7
Deferred tax charge * (3.8) (2.3)
Total tax charge 6.1 5.4
======================= ========= =========
* The deferred tax charge/credit predominately relates to share
based payments.
Income tax expense for the current half-year period is calculated
using the best estimate of the annual effective tax rate expected
for the full year, by geographical unit, applied to the pre-tax
income of the six month period, which is then adjusted for tax on
exceptional items.
The effective tax rate for the half-year ended 30 September 2021
is 32% (half-year ended 30 September 2020: 27%). The rate for this
half-year period has been affected by a number of one-off items,
including non-deductible listing costs and revaluation of deferred
tax due to the substantive enactment of the change in UK corporate
tax rate from 19% to 25%.
On 24 May 2021, an increase in the UK corporation tax rate from
19% to 25%, effective from 1 April 2023, was substantively enacted.
Therefore, the UK deferred tax assets and liabilities, which are
expected to unwind after 1 April 2023, have been re-measured in
the current reporting period based on the increased UK corporation
tax rate and reflected in the statement of profit and loss and equity.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 6. Property, plant and equipment
Right-of-use Leased office Office equipment Assets under Total
assets improvements construction
========================================= ============ ============= ================ ============= ======
At 31 March 2021
Cost 26.4 7.5 4.0 0.4 38.3
Accumulated depreciation (7.7) (4.6) (2.0) - (14.3)
Net book value 18.7 2.9 2.0 0.4 24.0
========================================= ============ ============= ================ ============= ======
Half-year ended 30 September 2021
Additions 1.6 3.6 0.7 0.4 6.3
Reclassifications - 0.1 0.2 (0.3) -
Depreciation charge (2.3) (0.8) (0.4) - (3.5)
Write-offs (0.6) - - - (0.6)
Foreign currency translation differences - - 0.1 - 0.1
At 30 September 2021
Cost 27.4 9.7 4.9 0.5 42.5
Accumulated depreciation (10.0) (3.9) (2.3) - (16.2)
Net book value 17.4 5.8 2.6 0.5 26.3
========================================= ============ ============= ================ ============= ======
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 7. Intangible assets
Software Other intangible Prepayments Total
assets
================================== ======== ================ =========== ======
At 31 March 2021
Cost 45.8 1.6 - 47.4
Accumulated amortisation (19.7) (0.2) - (19.9)
Net book value 26.1 1.4 - 27.5
=================================== ======== ================ =========== ======
Half-year ended 30 September 2021
Additions 2.7 0.4 1.1 4.2
Amortisation charge (7.9) (0.2) - (8.1)
At 30 September 2021
Cost 42.1 2.0 1.1 45.2
Accumulated amortisation (21.2) (0.4) - (21.6)
Net book value 20.9 1.6 1.1 23.6
=================================== ======== ================ =========== ======
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 8. Earnings per share
The following table reflects the income and share data used in
the basic and diluted earnings per share (EPS) calculations:
Half-year ended 30
September
2021 2020 *
===================================================== ========== ========
Profit for the period 12.7 14.6
Weighted average number of ordinary shares
for basic EPS (in millions of shares) 954.7 938.2
Plus the effect of dilution from
Share options (in millions of shares) 75.8 83.9
Weighted average number of ordinary shares
adjusted for the effect of dilution (in
millions of shares) 1,030.5 1,022.1
====================================================== ========== ========
Basic EPS, in pence 1.33 1.56
Diluted EPS, in pence 1.23 1.43
* For comparability and consistent presentation, the weighted average
number of ordinary shares and share options for 2020 were determined
on the same basis as the 2021 figures, i.e. as if all shares (common
and preference) were redesignated into a single class of A Ordinary
Shares, then each Class A Ordinary shares split into 26 Class A
Ordinary Shares. Refer to note 15 for further details.
Note 9. Trade and other receivables
As at 30 As at 31
September March
2021 2021
=============================================== ========== ========
Non-current trade and other receivables
Office lease deposits 1.0 1.0
Other non-current receivables 27.4 14.1
Total non-current trade and other receivables 28.4 15.1
================================================ ========== ========
Current trade and other receivables
Receivables from payment processors 62.9 44.3
Collateral deposits 26.3 26.0
Prepayments 4.4 6.0
Other receivables * 12.6 5.0
Total current trade and other receivables 106.2 81.3
================================================ ========== ========
* Net of expected credit loss provision of GBP15.6 million as at
30 September 2021 (31 March 2021: GBP14.2 million).
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 10. Financial assets at fair value through other
comprehensive income
Short-term financial investments are recognised as debt investments
at FVOCI and comprise the following investments in listed bonds:
As at 30 As at 31
September March
2021 2021
================================================ =========== =========
Short-term financial investments - level
1
Listed bonds 1,182.1 737.5
Total short-term financial investments 1,182.1 737.5
================================================= =========== =========
During the period, the following (losses)/gains were recognised
in other comprehensive income:
Half-year ended 30
September
2021 2020
===================================================== ========== ========
Debt investments at FVOCI
Fair value (losses)/gains recognised in
other comprehensive income (4.8) 0.2
Total fair value (losses)/gains in other
comprehensive income (4.8) 0.2
====================================================== ========== ========
Note 11. Cash and cash equivalents
As at 30 As at 31
September March
2021 2021
============================================ ========== ========
Cash and cash equivalents
Cash at banks and in hand 3,790.2 2,968.6
Cash in transit between Group bank accounts 50.3 49.4
Cash in transit to customers 131.7 108.6
Investment into money market funds 237.2 232.0
Total cash and cash equivalents 4,209.4 3,358.6
============================================= ========== ========
Of the GBP4,209.4 million (31 March 2021: GBP3,358.6 million) cash
and cash equivalents at the period end, GBP344.6 million (31 March
2021: GBP286.1 million) is considered corporate cash balance not
related to customer funds which are held on Wise Accounts or collected
from customers for Wise Transfers. Refer to note 14 for further
details.
At 30 September 2021, in addition to other highly liquid assets,
such as money market funds and investment grade bonds, the Group
held GBP3,187.6 million (31 March 2021: GBP2,472.9 million) of
cash at bank in segregated, safeguarded bank accounts to secure
customer deposits.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 12. Trade and other payables
As at 30 As at 31
September March
2021 2021
=========================================== ========== ========
Non-current trade and other payables
Non-current accruals and provisions 37.8 22.6
Total non-current trade and other payables 37.8 22.6
============================================ ========== ========
Current trade and other payables
Outstanding money transmission liabilities 162.3 141.2
Wise accounts 4,949.2 3,712.7
Accounts payable 2.4 3.1
Accrued expenses 36.1 23.1
Deferred revenue 4.2 3.2
Other payables 20.8 7.9
Total current trade and other payables 5,175.0 3,891.2
============================================ ========== ========
Note 13. Borrowings
As at 30 As at 31
September March
2021 2021
============================= ========== ========
Current
Lease liabilities 4.0 3.5
Total current borrowings 4.0 3.5
============================== ========== ========
Non-current
Revolving credit facility 78.2 78.6
Lease liabilities 16.2 16.6
Total non-current borrowings 94.4 95.2
============================== ========== ========
Total borrowings 98.4 98.7
============================== ========== ========
Debt movement reconciliation:
Revolving
credit facility Lease liabilities Total
========================================= ================ ================= ======
As at 31 March 2021 78.6 20.1 98.7
========================================= ================ ================= ======
Cash flows:
Proceeds 43.0 - 43.0
Transaction costs related to revolving
credit facility (0.7) - (0.7)
Repayments (43.0) (1.7) (44.7)
Interest expense paid (1.3) (0.5) (1.8)
Non-cash flows:
New leases - 1.6 1.6
Interest expense accrued 1.6 0.5 2.1
Foreign currency translation differences - 0.2 0.2
As at 30 September 2021 78.2 20.2 98.4
========================================= ================ ================= ======
Wise plc Interim report for the half-year ended 30 September 2021,
Registered number: 07209813
All amounts are in GBP million unless otherwise stated
In August 2021, the Group exercised an accordion within the current
revolving credit facility. An additional GBP52m was secured from
Barclays Bank plc, Goldman Sachs Lending Partners LLC and Morgan
Stanley Senior Funding Inc. The currency denomination, maturity
date, interest rate, covenant and security terms of the revolving
credit facility remain consistent with that disclosed in the 2021
Annual Report and Accounts. The Group has complied with the covenants
throughout the reporting period. The undrawn amount of the facility
as at 30 September 2021 was GBP132.0 million (31 March 2021: GBP80.0
million).
During the half-year ended 30 September 2021 the effective interest
rate on the relevant facility was between 2.8% and 3.0%.
Note 14. Cash generated from operating activities
Half-year ended 30
September
Note 2021 2020
================================================= ===== ========= =========
Cash generated from operations
Profit for the period 12.7 14.6
Adjustments for:
3, 6,
Depreciation and amortisation 7 11.6 10.5
Non-cash employee benefits expense - share-based
payments 21.7 18.1
Foreign currency exchange differences 12.3 (3.6)
Accrued income taxes 5 6.1 5.4
Effect of other non-monetary transactions 3.8 2.6
Changes in operating assets and liabilities:
(Increase)/decrease in prepayments and
receivables (12.5) 4.3
Increase in trade and other payables 33.2 4.7
(Increase)/decrease in receivables from
customers and payment processors (24.0) 7.6
Increase in liabilities to customers,
payment processors and deferred revenue 24.1 15.6
Increase in Wise accounts 1,168.3 932.2
Cash generated from operations 1,257.3 1,012.0
================================================= ===== ========= =========
The tables below show a non-IFRS view of the "Corporate cash" metric
that is used by the Group management as a Key Performance Indicator
in assessment of the Group's ability to generate cash and maintain
liquidity.
Information presented in the tables below is based on the Group's
internal reporting principles and might differ from the similar
information provided in IFRS disclosures.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Half-year ended 30
September
2021 2020
============================================= ========= =========
Cash flows from operating activities
Profit for the period 12.7 14.6
Adjustments for non-cash transactions 37.9 39.2
Change in corporate working capital 21.5 10.2
Payment of income tax and interest charges (9.7) (3.3)
Net cash generated from operating activities 62.4 60.7
============================================== ========= =========
Net cash used in investing activities (6.8) (11.1)
============================================== ========= =========
Net cash used in financing activities - (26.5)
============================================== ========= =========
Total increase in corporate cash 55.6 23.1
============================================== ========= =========
Corporate cash at beginning of period 286.1 155.1
Effect of exchange rate differences on
corporate cash 2.9 (3.6)
Corporate cash at end of the period 344.6 174.6
============================================== ========= =========
As at 30 September
Note 2021 2020
=========================================== ==== ========= =========
Breakdown of corporate and customer cash
Cash and cash equivalents and short-term 10,
financial investments 11 5,391.0 3,161.3
Receivables from customers and payment
processors 72.5 45.3
Adjustments for:
Outstanding money transmission liabilities
and other customer payables (169.7) (136.4)
Wise accounts 12 (4,949.2) (2,895.6)
Corporate cash at end of the period 344.6 174.6
=========================================== ==== ========= =========
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 15. Share capital
As at 30 September 2021 As at 31 March 2021
========== =================================== ===================================================================
Wise plc Wise plc Wise Payments Ltd
========== =================================== ================================= ================================
Class Nominal Number of Share Nominal Number of Share Nominal Number of Share
value, shares capital, value, shares * capital, value, shares capital,
GBP GBP GBP GBP * GBP GBP
*
========== ========= ============= ========= ========= =========== ========= ========= ========== =========
Class A
Ordinary 0.01 994,589,856 9,945,899 - - - - - -
Class B 0.000 000
Ordinary 001 398,889,814 0.40 - - - - - -
Ordinary - - - 0.01 433,918,706 4,339,187 0.000 01 16,689,181 166
Seed
preferred - - - 0.01 130,364,000 1,303,640 0.000 01 5,014,000 50
Series A
preferred - - - 0.01 176,410,000 1,764,100 0.000 01 6,785,000 68
Series B
preferred - - - 0.01 73,553,350 735,534 0.000 01 2,828,975 28
Series C
preferred - - - 0.01 65,033,436 650,334 0.000 01 2,501,286 25
Series D
preferred - - - 0.01 22,662,848 226,628 0.000 01 871,648 9
Series E
preferred - - - 0.01 39,911,482 399,115 0.000 01 1,535,057 15
Total 1,393,479,670 9,945,899 941,853,822 9,418,538 36,225,147 361
========== ========= ============= ========= ========= =========== ========= ========= ========== =========
* The share capital presented reflects the share capital structure of Wise plc as if it had been
the ultimate parent of the Group as of the comparative date.
On 22 June 2021, in connection with the preparation for the direct listing on the London Stock Exchange,
Wise Payments Ltd undertook a share reorganisation in which all shares (ordinary and preference)
were redesignated into a single class of A Ordinary Shares. Following which, each Class A Ordinary
Share was split into 26 Class A Ordinary Shares. Wise Payments Ltd then undertook a bonus issue of
B Ordinary Shares.
On the same day and following the above share reorganisation, Wise Payments Ltd shareholders entered
into a share-for-share exchange agreement with the shareholders of Wise plc, acquiring Wise Payments
Ltd's Class A and Class B Ordinary Shares with nominal values of GBP0.000 01 and GBP0.000 000 001,
in exchange for the issue of Wise plc Class A and Class B Ordinary Shares with nominal values of
GBP0.01 (i.e. 1,000 times greater than the nominal value of Wise Payments Ltd's Class A shares) and
GBP0.000 000 001, respectively. As a result, Wise plc became the ultimate parent company of the Group,
with a 100% indirect investment in Wise Payments Ltd through Wise Financial Holdings Ltd.
Each Class A Ordinary shareholder is entitled to one vote for each Class A Ordinary share held, subject
to any restrictions on total voting rights as set out in the Company's articles of association. Class
A Ordinary shareholders are entitled to interim or annual dividends to the extent declared and do
not hold any preferential rights to dividends. Class A Ordinary shares are non-redeemable.
Each Class B shareholder is entitled to nine votes for each Class B share held, subject to any restrictions
on total voting rights as set out in the Company's articles of association. Class B shares carry
no rights to distributions of dividends except on distribution of assets, up to their nominal value,
on a liquidation or winding up. Class B shares are strictly non-transferable, non-tradeable and non-distributable
to any person or entity whatsoever.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Note 16. Share-based employee compensation
The nature, accounting policies and key terms of the employee
share option plan remain consistent with that disclosed in the 2021
Annual Report and Accounts, unless stated otherwise below.
After the reorganisation of the Group, as described in notes 1
and 15, share options for Wise Payments Limited Ordinary shares
were replaced with share options for Wise plc Class A Ordinary
shares. The same share-split ratio was applied as for the share
capital reorganisation described in note 15.
As the result of the reorganisation, Wise Payments Limited
transferred its share-based payment reserves to retained earnings
as the obligation to settle share-based payment awards would be
with Wise plc. This transfer did not impact consolidated results of
the Group following the reorganisation and will be reflected in the
standalone financial statements of Wise Payments Limited.
Note 17. Contingencies
The Group does not have any material contingencies as at 30
September 2021 and 31 March 2021.
Note 18. Transaction with related parties
Kristo Käärmann and Matthew Briers are currently employed under
service agreements with the Company. Taavet Hinrikus is currently
employed under a service agreement with Wise Payments Ltd. Matthew
Briers is eligible to participate in the Company's annual bonus
plan, but the other Executive Directors' service contracts do not
provide for participation in an annual bonus plan.
David Wells, Ingo Uytdehaage, Clare Gilmartin and Hooi Ling Tan
receive a nominal fee of GBP1 per annum as remuneration for their
duties for the Company. Alastair Rampell received no fee in
relation to his duties for the Company.
There were no other related party transactions which had a
material impact on these condensed interim financial
statements.
Note 19. Alternative performance measures
The alternative performance measures ("APMs") used by the Group
remain consistent with those disclosed in the 2021 Annual Report
and Accounts of the Group and should be viewed as supplemental to,
but not as a substitute for, measures presented in the financial
statements which are prepared in accordance with IFRS.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Reconciliation of Free Cash Flow and Adjusted EBITDA to profit
for the period
Half-year ended 30
September
2021 2020
============================================ ========= =========
Profit for the period 12.7 14.6
============================================= ========= =========
Adjusted for:
Income tax expense 6.1 5.4
Finance expense 2.5 2.1
Depreciation and amortisation 11.6 10.5
Share-based payment compensation expense 20.6 18.0
Exceptional items 7.1 -
Adjusted EBITDA 60.6 50.6
============================================= ========= =========
Revenue 256.3 192.2
Adjusted EBITDA margin 23.6% 26.3%
============================================= ========= =========
Corporate cash working capital change
excl. collaterals 22.7 5.3
Adjustment for exceptional and pass-through
items in the working capital (15.8) -
Payments for lease liabilities (2.2) (2.4)
Capitalised expenditure - Property, plan
and equipment (3.2) (1.1)
Capitalised expenditure - Intangible assets (3.1) (10.1)
Free cash flow (FCF) 59.0 42.3
============================================= ========= =========
FCF conversion (FCF as a % of Adjusted
EBITDA) 97.4% 83.6%
============================================= ========= =========
Exceptional items: Exceptional items are the items of income or
expense that the Group considers to be material, one-off in nature
and of such significance that they merit separate presentation in
order to aid the reader's understanding of the Group's financial
performance. Such items include costs associated with the changes
in the Group's organisational structure and direct listing.
Note 20. Events occurring after the reporting period
On the date of this report the Company announced the intended
issuance of 30 million class A ordinary shares of GBP0.01 each in
the capital of the Company, with such shares to be allotted by the
Company to the trustee of the Company's employee benefit trust for
nominal value, for the purpose of satisfying the vesting of awards
under the Company's employee share plans. The shares, when issued,
will be issued fully paid and rank pari passu in all respects with
the existing issued class A ordinary shares of the Company.
Wise plc Interim report for the half-year ended 30 September
2021, Registered number: 07209813
All amounts are in GBP million unless otherwise stated
Principal risks and uncertainties
The principal risks and uncertainties that the Group faces for
the rest of the financial year are consistent with those previously
reported in the 2021 Annual Report and Accounts and include:
Strategic risk - The risk that Wise does not successfully
execute on its mission, or its business model is not sustainable
over the long-term. The Group faces a number of risks that may
impact its growth, including competition risk, macro-economic risk,
expansion risk and legal and regulatory risk.
Operational risk - The risk of loss resulting from inadequate or
failed internal processes and systems, financial crime, people
risks and risks from external events. The Group faces a range of
operational risks which can impact its profitability and reputation
with customers, including information security risk, data privacy
risk, IT infrastructure risk, key third-party risk, financial
control risk, fraud risk and people risk.
Financial risk - The risk that Wise fails to have adequate
financial resources, including solvency risks and its ability to
meet its payment obligations. The Group faces a range of financial
risks which can impact its profitability, capital and liquidity
position, including market risk, credit risk, prudential risk,
financing risk and tax risk.
Compliance risk - The risk of incorrect interpretation,
implementation, and compliance with regulatory requirements
applicable to Wise. The Group is subject to an evolving range of
regulatory, legal and tax requirements. Its failure to meet these
requirements, or significant changes in these regimes, can have an
impact on its business.
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END
IR FFFLFLDLAFIL
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