Mash Group Plc Reports Interim Unaudited Q1 financials, ended 31st March 2019
Revenue continues to grow reaching a new record for the first quarter, up 69% from Q1/2018. EBIT grew by 68% to EUR 3.7 million for the same period. Demand growth is expected in all markets, according to CEO Hickson.
The first quarter of 2019 showed further growth in loan book, revenue, and EBIT, compared to Q1/2018, as Mash continues to execute its growth plan.
Strategic Highlights
- During the first quarter of 2019, Mash continued to invest in improving its capabilities in pay-by-invoice and lending services through POS, ecommerce and online/mobile channels. The development focus has been on the delivery of previously agreed and announced partnerships and consolidating and improving business and system performance.
- Sales and market development focused on improving cooperation with partners and merchants to increase business volume conversion.
- The Group evaluated its strategic positioning and compliance with current legislation and upcoming changes in the regulatory environment. The outcome was that the business of Mash Group is compliant and e.g. the impact of new pricing limitations has very little impact on business. The new regulatory environment in Finland has affected the Group’s competitors, which is expected to lead to an increased demand for Mash services in the Finnish market.
Operational Highlights
- The number of new customers grew by 81% during the first quarter of 2019 compared to Q1/2018. Mash payment customers increased by 221% for the same period, with 66% of new customers now coming through the payment channels (38% in Q1/2018).
- Mash repaid a EUR 20 million bond at the end of March and a EUR 9 million bond in April, and issued new bonds to enable further growth
- The Group made strategic new hires in its capabilities, with a new Chief Data Scientist and Chief Legal Officer joining the Group during spring 2019.
Financial Highlights
- Revenue grew by 69% year-on-year for Q1/19 compared to Q1/18, while EBIT grew by 68% to EUR 3.7 million.
- The Group’s solidity remains strong, maintaining a strong equity ratio at 26%, with equity increasing by 47% compared to Q1/2018, while the total loan portfolio increased by 80%.
- Total assets grew by 75% year-on-year to EUR 284 million.
Values based on pro-forma consolidated figures. For equivalent FAS values see below.
James Hickson, CEO of Mash Group outlines the development of the Group during the first quarter:
“We continue to see strong demand for our services particularly with our pay-later solution at point of sale and ecommerce channels, attracting record levels of customers and new merchants. We continue to make investments in our platform to support scalability and interoperability while focusing, critically, on the customer experience. We are focused on long term profitability investing in hiring staff, our culture and our technology platform. Our decisions will continue to be shaped by this philosophy.”
“We see strong demand for consumer lending in 2019, partly driven by regulatory changes in Finland and our investment in our platform and business model”, Hickson continues. “Unlike many of our competitors, we took proactive steps in summer 2017 to pivot our business further away from high fee/high interest products towards a sustainable business model that is focused on generating high quality portfolios. As a result, we are today largely insulated from regulatory changes in Finland and are well positioned to capitalize on the market opportunity as key players depart.”
Tommi Lindfors, Chairman of Mash Group, sees a strategic opportunity in the current market, and so do larger investors. “The field is clearly opening up and market shares are open for the taking, with massive demand growth expected especially through our pay-by-invoice acquisition channels. In our business, the key resource and bottleneck has always been funding. Growth requires additional funding, so we have worked on securing bigger incremental growth in our equity and funding base. Both debt and equity investors clearly like our proven business concept, as we have shown that we can deliver what we promise. We currently have several funding partnership options that have progressed to the point where we are now evaluating term sheets. These are exciting times.”
PRO FORMA CONSOLIDATED FIGURES*
| BALANCE SHEET (EUR '000) | 31.3.2019 | 31.12.2018 | 31.3.2018 |
| Intangible assets | 53 537 | 49 170 | 32 312 |
| Tangible assets | 526 | 561 | 18 |
| Investments | 17 759 | 7 516 | 3 813 |
| TOTAL NON-CURRENT ASSETS | 71 822 | 57 247 | 36 143 |
| Current receivables | 203 204 | 189 305 | 113 153 |
| Cash and Bank Receivables | 9 219 | 20 392 | 13 534 |
| TOTAL CURRENT ASSETS | 212 423 | 209 697 | 126 687 |
| TOTAL ASSETS | 284 245 | 266 944 | 162 830 |
| Share capital and issue | 92 | 93 | 93 |
| Translation difference | -646 | -514 | -455 |
| Reserve for invested non-restricted equity | 70 616 | 59 362 | 50 326 |
| Retained earnings | 4 567 | 4 249 | 224 |
| Profit for the Financial period | -911 | 441 | 89 |
| TOTAL EQUITY | 73 718 | 63 631 | 50 277 |
| Non-current Liabilities | 111 445 | 89 200 | 54 009 |
| Current liabilities | 99 082 | 114 113 | 58 545 |
| TOTAL LIABILITIES | 210 527 | 203 313 | 112 554 |
| TOTAL EQUITY & LIABILITIES | 284 245 | 266 944 | 162 830 |
| INCOME STATEMENT (EUR '000) | 3M/2019 | 3M/2018 |
| TURNOVER | 10 511 | 6 233 |
| Other operating income | 0 | 4 |
| Materials and services | -881 | -155 |
| Personnel costs | -1 295 | -856 |
| Depreciation | -2 011 | -901 |
| Other business-related costs | -2 649 | -2 133 |
| EBIT | 3 676 | 2 191 |
| Financial income and expenses | -4 575 | -2 088 |
| EBT | -900 | 103 |
| Tax | -11 | -15 |
| Net Profit | -911 | 88 |
| INCOME STATEMENT (EUR '000) | Q1/2019 | Q4/2018 | Q1/2018 |
| TURNOVER | 10 511 | 10 439 | 6 233 |
| Other operating income | 0 | 5 | 4 |
| Materials and services | -881 | -161 | -155 |
| Personnel costs | -1 295 | -1 315 | -856 |
| Depreciation | -2 011 | -1 684 | -901 |
| Other business-related costs | -2 649 | -4 344 | -2 133 |
| EBIT | 3 675 | 2 940 | 2 192 |
| Financial income and expenses | -4 575 | -3 441 | -2 088 |
| EBT | -900 | -502 | 105 |
| Tax | -11 | -7 | -15 |
| Net Profit | -911 | -509 | 90 |
* The interim pro-forma consolidated figures and comparison figures have been prepared by consolidating Mash Group figures prepared in compliance with Finnish Accounting Standards ("FAS") and Pausa Capital S.à.r.l. prepared in conformity with Luxembourg legal and regulatory requirements and according to generally accepted accounting principles applicable in Luxembourg ("Lux GAAP"). The following transactions between Mash Group and Pausa Capital S.à.r.l. have been eliminated in the pro-forma consolidated figures:
- Subordinated Notes issued by Pausa Capital S.à.r.l. and held by Mash Group
- Variable interest recognised by Mash Group related to the Subordinated Notes
- Servicing fees from Mash Group to Pausa Capital S.à.r.l., Mash Finance Oyj being the servicer of the funding facility.
- Debt Collection fees charged by Mash Group to Pausa Capital S.à.r.l., Credito Cobro Oy being one of the collection agencies of the funding facility.
Pausa Capital S.à.r.l is a special purpose vehicle supporting the funding facility provided to Mash Group. According to Group Management, the pro-forma consolidated figures that include Pausa Capital S.à.r.l. provide a more comprehensive view of the financial position and performance of Mash Group, compared to FAS consolidated figures, which can be found below. These figures are unaudited. The reader is advised to refer to the 2018 annual review and financial statements for the latest audited figures and more information about the Group.
Financial Highlights (FAS)
- Revenue grew by 74% year-on-year for Q1/19 compared to Q1/18, while EBIT grew by 101% to EUR 2.3 million.
- The Group’s solidity remains strong, maintaining a strong equity ratio at 35%, with equity increasing by 47% compared to Q1/2018, while the total loan portfolio increased by 80%.
- Total assets grew by 75% year-on-year to EUR 210 million.
FAS CONSOLIDATED FIGURES*
| BALANCE SHEET (EUR '000) | 31.3.2019 | 31.12.2018 | 31.3.2018 |
| Intangible assets | 53 537 | 49 170 | 32 312 |
| Tangible assets | 526 | 561 | 18 |
| Investments | 17 759 | 7 516 | 3 813 |
| TOTAL NON-CURRENT ASSETS | 71 822 | 57 247 | 36 143 |
| Current receivables | 137 264 | 132 312 | 76 230 |
| Cash and Bank Receivables | 1 155 | 12 324 | 7 897 |
| TOTAL CURRENT ASSETS | 138 419 | 144 636 | 84 127 |
| TOTAL ASSETS | 210 241 | 201 883 | 120 271 |
| Share capital and issue | 80 | 80 | 80 |
| Translation difference | -646 | -514 | -455 |
| Reserve for invested non-restricted equity | 70 616 | 59 362 | 50 326 |
| Retained earnings | 4 567 | 4 249 | 224 |
| Profit for the Financial period | -911 | 441 | 89 |
| TOTAL EQUITY | 73 706 | 63 619 | 50 264 |
| Non-current Liabilities | 39 740 | 27 010 | 13 835 |
| Current liabilities | 96 795 | 111 254 | 56 171 |
| TOTAL LIABILITIES | 136 535 | 138 264 | 70 006 |
| TOTAL EQUITY & LIABILITIES | 210 241 | 201 883 | 120 271 |
| INCOME STATEMENT (EUR '000) | 3M/2019 | 3M/2018 |
| TURNOVER | 8 739 | 5 033 |
| Other operating income | 0 | 4 |
| Materials and services | -881 | -155 |
| Personnel costs | -1 295 | -856 |
| Depreciation | -2 011 | -901 |
| Other business-related costs | -2 239 | -1 972 |
| EBIT | 2 315 | 1 153 |
| Financial income and expenses | -3 220 | -1 055 |
| EBT | -905 | 98 |
| Tax | -6 | -10 |
| Net Profit | -911 | 89 |
| INCOME STATEMENT (EUR '000) | Q1/2019 | Q4/2018 | Q1/2018 |
| TURNOVER | 8 739 | 8 950 | 5 033 |
| Other operating income | 0 | 5 | 4 |
| Materials and services | -881 | -161 | -155 |
| Personnel costs | -1 295 | -1 315 | -856 |
| Depreciation | -2 011 | -1 684 | -901 |
| Other business-related costs | -2 237 | -3 160 | -1 972 |
| EBIT | 2 315 | 2 634 | 1 153 |
| Financial income and expenses | -3 220 | -3 136 | -1 055 |
| EBT | -905 | -501 | 99 |
| Tax | -6 | -7 | -10 |
| Net Profit | -911 | -509 | 89 |
About Mash
Mash has been at the forefront of fintech innovation since 2007. We leverage our advanced proprietary algorithms, machine learning capabilities, and automated platform to deliver superior finance and payments solutions to thousands of customers every day. We work hard for a future powered by technology, making every transaction seamless, flexible and worry-free. Today, Mash is one of Europe’s leading fintech companies.
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For more information please contact:
Jonas Lindholm
Mash Group Plc
Tel +358 10 217 1003
investor@mash.com
press@mash.com