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Sancus Lending Group Limited reported its final results for the year ended 31 December 2025, with profit before tax increasing to £1.2m (2024: £0.1m) on group revenue up 32% to £22.1m. Loans under management grew 29% to £306.7m, while originated new facilities increased 96% year-on-year to £212.5m. Post-period, as of 28 February 2026, assets under management totaled £321.3m and the facility with Pollen Street Capital was increased to £300m in February 2026.
| Date | 19 Mar 2026 |
| Time | 07:00:06 |
| Category | Results |
| ID | 2152X |
Sancus Lending Group Limited
("Sancus" the "Company" or the "Group")
Final Results for the year ended 31 December 2025
Sancus Lending Group Limited (AIM: LEND) is pleased to announce its audited results for the year ended 31 December 2025.
HIGHLIGHTS
Rory Mepham, Chief Executive Officer of Sancus Lending Group Limited, commented:
"I am pleased to report another encouraging set of results for Sancus and a significant uplift in profitability. More importantly, 2025 represents a meaningful milestone in the five-year journey to reposition and strengthen the Group. Since 2021, we have focused on rebuilding our platforms, enhancing leadership, improving credit quality and simplifying our capital structure. The progress we are now reporting reflects the cumulative impact of that disciplined work, delivered against what has remained a challenging market backdrop.
For the year ended 31 December 2025, we grew turnover by 32% to approximately £22.1m, driven by continued momentum in our UK and Irish core businesses, alongside an improved performance in the Channel Islands. During the year we originated £212.5m of new facilities, a 96% increase year on year, and finished the year with £306.7m of loans under management, up 29%. Alongside growth, we have remained firmly focused on strengthening the balance sheet. Further steps were taken to reduce leverage and future financing risk, including additional ZDP repurchases, contributing to improved profitability. As a result, we report a profit before tax of £1.2m (2024: £0.1m), reflecting both operating momentum and a structurally stronger financial position.
Today, the Group operates through three strategic operating units: Sancus (UK & Ireland), our core property lending platform; Amberton, our private wealth and asset management business; and Hawk, our Channel Islands joint venture. Sancus Lending Group Limited acts as the holding company, providing strategic oversight, capital discipline and governance across these platforms. This clearer structure positions us well for the next phase of development.
The Board and I are encouraged by the progress made in enhancing our lending and funding platforms. Our UK and Irish businesses are operating at greater scale, Amberton continues to diversify and lower our cost of capital, and Hawk strengthens both our offshore presence and private wealth connectivity. With disciplined cost control and prudent underwriting remaining central to our approach, we have entered 2026 with increasing confidence in our ability to deliver sustainable, run-rate profitability.
While macroeconomic conditions remain mixed, structural undersupply in our core residential markets, continued retrenchment by traditional lenders and growing appetite for secured private credit provide attractive opportunities. From a significantly stronger foundation than five years ago, we are excited about the next phase of growth and the continued strategic development of the Group."
Financial Highlights
· Group revenue increased by 32% to £22.1m (2024: £16.8m).
· A further expected credit loss ("ECL") credit of £0.2m (2024: £0.4m credit), reflecting continued stabilisation in the credit quality of the Group's on balance sheet loan portfolio and continued progress in managing legacy loan exposures.
· Group Profit Before Tax ("PBT") for the year of £1.2m (2024: £0.1m) including gains of £2.6m (£2024: £2.8m) on the buy-back of some Zero Dividend Preference Shares ("ZDP Shares").
Operational Highlights
· Loan book at year end of £306.7m, a 29% increase in the year (2024: £237.6m).
· UK AUM increased by 49% to £125.4m (2024: £84.0m), with the business writing £93.5m of new facilities vs £48.3m in 2024.
· Irish loan book grew by 76% to £84.3m (2024: £47.8m) with the business writing new facilities of £84.2m (2024: £39.9m).
· Channel Islands Hawk joint-venture wrote new facilities of £33.9m in continued challenging market conditions (2024: £20.1m). At the year-end it had AUM of £97.1m (2024: £105.8m), including £61.6m (2024: £83.1m) relating to the legacy Sancus Jersey and Hawk businesses.
· Amberton joint venture had a very strong year, including launching various new loan notes and increasing its loan note programme AUM to £73.5 million (2024: £41.7m).
Strategic Highlights
· Achievement of £1.2m PBT, reflecting business growth and improved operating performance especially in the latter part of 2025 and also supported by £2.6m of gains from the buy-back of ZDP Shares.
· Significant progress in our UK and Irish property lending businesses, specifically:
o Further strengthening and development of our UK business, including a broadening of its leadership team and the opening of a larger Manchester office to allow us to accelerate the growth of the UK business.
o Continued expansion and strong profitability within the Irish business.
· The private wealth and asset management joint venture, Amberton, has continued to grow and helped support the Group's diversification of funding, including through the launch of three new loan notes.
· There has been significant growth in the financing facilities that the Group has access to. During the year we announced a £20m facility with Paragon Bank. In February 2026 we announced an increase in our facility with Pollen Street Capital to up to £300m (£150m drawn at the year-end).
· Further strengthening and simplification of the Group's capital position and flexibility:
o Repurchase of 2.9m of ZDP Shares, resulting in a gain on purchase of c. £2.6m and adjustments to their terms and conditions. The Group now has no further interest expense on these shares.
o Somerston, the Group's largest shareholder, committed to provide up to £10m of junior capital to support growth in the finance facilities that support our UK and Irish lending business. £7.05m was drawn under this commitment in 2025.
Current Trading and post balance sheet events
· Management is confident that the business is capable of delivering run-rate profitability in 2026. In the first two months of 2026 we generated unaudited revenues of £3.9m, a 30% increase on revenues generated in the equivalent 2025 period (2025: £3.0m). This growth reflects continued business momentum, including in new facilities. New Facilities written in the first two months were £27.8m, a 14% increase on loans written in the equivalent 2025 period (2025: £24.3m).
· AUM as at 28 February 2026 were £321.3m, a 5% increase on AUM as at 31 December 2025 of £306.7m.
· In February 2026, and in order to support the business's continued growth, we announced an increase in our facility with Pollen Street Capital to £300m and an extension of its maturity date to February 2031. The growth in this facility has also been supported by Somerston subscribing for a further £1.4m of preference shares in Sancus Loans Limited in January 2026 and agreeing to other changes to the terms of theses preference shares to align them with this increased and extended facility. In March 2026 Somerston also subscribed for £0.75m of Sancus Bond in order to support our working capital flexibility.
For further information, please contact:
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Gwen Norman |
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CHAIRMAN'S STATEMENT
Introduction
During 2025 we made good progress, returning the Group to profitability and positioning the business for growth as a private credit and property focussed asset manager.
Results and Strategic Progress
We have reported a Profit before Tax of £1.2m (2024: £0.1m), a second consecutive year of profitability before tax. This result reflects various factors. Notably, a 32% growth in revenue to £22.1m, lower group borrowing costs and the recording of a modest reduction in our ECL IFRS9 provisions, allowing us to significantly reduce our operating loss to £1.7m (2024: £2.3m). After the impact of other items, including the gains on the buy-back of some ZDP Shares, we have delivered Profit Before Tax of £1.2m (2024: £0.1m).
Management made more progress to enhance the strategic positioning of the business. In the UK we further strengthened the leadership team and opened a larger Manchester office. This will allow us to accelerate our UK growth, including increasing the volume of bridging business. Our Irish business continues to perform very well and achieved another record set of results in 2025. Our Hawk Channel Islands joint venture gives us a differentiated presence in the local property financing market, improving our access to family office wealth networks. Although Hawk delivered an operating profit, the Channel Islands property market conditions remain challenging.
Overall, these actions along with measures taken to strengthen our capital position and lower our group borrowing costs, persuade us that the business could deliver run rate profitability in 2026.
Capital
Somerston continues to provide significant support to the Group. In January 2025 Somerston, the Group's largest shareholder, entered into a commitment to provide the Group with up to a further £10m of junior capital to support growth in the Group's loan financing facilities. During the year £7.05m of capital was drawn under this commitment. Somerston also subscribed for £1.4m of Sancus Bond in June 2025 and March 2026 and £2.0m of Ordinary Shares in December 2025 in order to facilitate the buyback of some ZDP Shares.
Dividend and Shareholders
The Group remains committed to the recovery programme but does not have the capacity to declare a dividend this year. The Board will revisit this policy as soon as cash flow and profitability permit.
On behalf of the Board, I would like to thank shareholders for their continued support and patience. Thanks to the continuing efforts of our team the Group has made good progress this year. While the Board does not underestimate the scale of the challenge ahead, we believe the business is increasingly well positioned to deliver sustained profitability and growth.
I look forward to reporting further positive developments in the coming year.
Steve Smith
Chairman
18 March 2026
Overview
Since joining the Sancus Group in 2021, our focus has been clear: to stabilise, strengthen and reposition the Group for sustainable growth. Over the past five years we have built our lending platforms, enhanced leadership capability, simplified the capital structure, diversified funding sources and materially improved credit quality across the loan book.
The results reported for 2025 represent a significant milestone in that journey. Revenue has grown from £9.0m in 2021 to £22.1m in 2025, while Loans Under Management have increased from £142m to £306.7m over the same period. Importantly, we have moved from substantial operating and overall losses in 2021-2023 to achieving a second consecutive year of profitability, delivering £1.2m Profit Before Tax in 2025.
This is not simply a cyclical recovery. It reflects structural improvements in how we originate, fund, manage and risk-control our lending activities. 2025 marks the point at which the foundations laid over recent years have begun to translate into consistent operating momentum.
Our immediate focus is to build on this and deliver sustained operating profitability. Over the next five years our strategic vision is to transform the Group into a broader business which focuses on private credit, property (equity & debt) and other complementary alternative strategies in which the management, our shareholders and funders have specific sectorial expertise and deal flow.
Our Strategy
The business continues to prioritise achieving profitability through delivering on the following strategic priorities:
1. Focusing on targeted revenue growth
In 2025 we achieved a £5.3m (32%) increase in revenue to £22.1m. Our strong revenue growth during the year reflects our success in 2025 in improving the scale and quality of business written in the UK and Ireland in particular, driving increased fee income and an increased interest margin from a larger loan book. Our UK and Irish platforms continued to develop their strength in providing development loans (2025 New Facilities: £148.5m, 2024: £86.0m). Our strengthened teams and capabilities allowed us to increase the volume of bridging business written (2025 New Facilities: £64.1m, 2024: £22.2m).
2. Achieving operating and cost efficiency
Operating expenses in the year were £1.1m higher at £7.1m (2024: £6.0m). This includes general operational growth, including required expense investment to position our business for growth as well as some one-off costs. We are committed to achieving further expense savings and efficiency gains in future years, including through greater use of our in-house technology platform and enhanced expense discipline.
3. Becoming a capital efficient business and lowering our cost of capital
Our disciplined capital management approach focuses on reducing the amount of own capital within loans and driving down the cost of funding. We made progress in lowering our cost of funding during the year and we anticipate some of the benefits to be realised in 2026 and future years, including:
· Committed credit lines. As at 31 December 2025 we had drawn £150m under a committed credit line we have with Pollen Street Capital. In February 2026 we announced an increase in the size of this facility to £300m and an extension of its term to February 2031. During the year we established new financing facilities with two other challenger banks. Operationalisation of these facilities will allow us to lower our cost of capital.
· Loan notes: We continued to grow our Loan Note programme via our Amberton joint-venture and had £73.5m of Loan Notes in issue at the year-end at rates well below the institutional funding line secured by the Group. Specifically:
o We launched 3 new loans notes (Amberton Loan Note 1 in May 2025 Amberton Loan Note 2 in December 2025 and Warehouse Loan Note 1 in November 2025). Loan Note 9 also raised new monies prior to the launch of the three new loan notes. Total new subscriptions into Loan Notes during the year were £31.1m (2024: £14.9m).
· Private Wealth Co-funders: At 31 December, co-funders provided £59.3m of funding to us. We are committed to further enhancing and refining our private wealth co-funder proposition alongside our Amberton Loan Note offering.
We achieved a £69.1m (29%) increase in AUM to £306.7m (2024: £237.6m) during the year. Jurisdictional progress of AUM was as follows:
· Our UK AUM increased by 49% to £125.4m (2024: £84.0m) with the business writing £93.5m of new facilities (2024: £48.3m). We continued to broaden and deepen our UK business' leadership team and it was notable that the business's volumes picked up markedly in the 2nd half of 2025.
· Our Irish loan book grew by 76% to £84.3m (2024: £47.8m) with the business writing new facilities of £84.2m (2024: £39.9m). We continue to be excited about the prospects for our Irish business.
· Our Channel Islands Hawk joint-venture, which commenced in January 2024, wrote new facilities of £33.9m (2024: £20.1m) in very challenging market conditions. At the year-end it had AUM of £97.1m (2024: £105.8m), including £61.6m relating to the legacy Sancus Jersey and Hawk businesses.
Overall, the new facilities written this year (£212.5m vs £108.2m 2024), combined with the other steps taken to enhance the positioning of our businesses, gives us confidence in our ability to further increase our AUM in 2026 and deliver profitable growth.
Financial Summary - Profit and Loss Account
We have reported a Profit before Tax of £1.2m (2024: £0.1m). This reflects various factors:
· Group revenue increased by 32% year on year from £16.8m in 2024 to £22.1m in 2025 with the UK revenue up by 49% to £5.5m (2024: £3.7m) and Ireland up by €1.1m (2024: €2.3m). Interest income increased strongly to £13.2m (2024: £10.4m), helped by the growth in AUM and the successful resolution of non-interest bearing loans previously provided for.
· A reduction in group borrowing costs to £2.1m (2024: £2.3m), primarily reflecting the buy-back of 1.2m of ZDP Shares in June 2025 and a further 1.7m buy-back of ZDP Shares in December 2025. Following changes to the terms and conditions of these ZDP Shares we no longer have to record an interest expense from these shares.
· A £0.2m ECL credit under IFRS9 in comparison to a £0.4m credit for ECL under IFRS9 in 2024 as the business benefitted from continued stable credit quality.
· Operating expenses in the year were £1.1m higher at £7.1m (2024: £6.0m). Other net gains of £2.5m (2024: £2.7m), primarily reflect the gains on the buy-back of ZDP Shares.
· A profit of £0.4m from the Group's share of the Hawk joint venture represented a turnaround from the loss in the first year in operation.
Financial Summary - Balance Sheet
The Group's total assets as at 31 December 2025 were £195.0m (31 December 2024: £122.1m). The increase in total assets primarily reflects growth in loans financed through Sancus Loans Limited. Sancus Loans Limited had loans of £156.2m at 31 December 2025 (31 December 2024: £91.4m). The Group transitioned into net assets of £1.1m at 31 December 2025 (31 December 2024: net liabilities £2.1m) as a result of the combined impact of the profit before tax outlined above and the share issue in December 2025 for the ZDPs bought back in December 2025.
Group cash and cash equivalents were £3.2m at 31 December 2025 (31 December 2024: £2.5m) of which £1.1m related to Group operational cash and £2.1m was within Sancus Loans Limited.
Our investment in the Hawk joint venture had a carrying value of £14.7m at the year-end (31 December 2024: £14.4m). Note 10 below provides further details of our investments in joint ventures.
The Group's liabilities consist of the Bond instrument, the ZDP Shares and the Pollen credit facility drawdown. The outstanding value of the Bond instrument at the year-end was £20.3m (31 December 2024: £17.0m). In June 2025, bondholders approved an amendment to the terms of the bonds to introduce a payment-in-kind interest option, allowing bondholders to elect to receive interest rolled up and paid on maturity at an increased rate of 8.5% per annum, instead of the 8% cash coupon paid quarterly. As at 31 December 2025 the ZDP Shares had a carrying value of £3.3m (31 December 2024: £8.8m), the decrease reflecting the ZDP Share buy-back transactions completed during the year. The ZDP shares have a maturity date of 5 December 2030 following ZDP shareholders approving a 3 year extension of the final capital entitlement repayment date on 24 June 2025. On this date, the ZDP shareholders also approved the suspension of any further capital growth from 24 June 2025, resulting in the final capital entitlement being £2.0990 per ZDP share. This also means that from that date the Group does not need to accrue any further interest charge related to the ZDP Shares.
The Pollen credit facility of £200m (31 December 2024: £125m) stood at £150m drawn as at 31 December 2025 (31 December 2024: £90m). During the year Sancus Loans Limited, one of the Group's funding subsidiaries, issued £4.65m of preference shares to Somerston. These preference shares carry a non-cash cumulative coupon of 15%.
Key Performance Indicators
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2021 |
2022 |
2023 |
2024 |
2025 |
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Revenue (£ million) |
£9.0m |
£10.0m |
£12.3m |
£16.8m |
£22.1m |
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Loans under management (£ million) |
£142.0m |
£169.0m |
£202.1m |
£237.6m |
£306.7m |
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Operating loss (£ million) |
(£10.2m) |
(£4.7m) |
(£9.8m) |
(£2.3m) |
(£1.7m) |
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(Loss) / Profit before tax (£ million) |
(£10.4m) |
(£14.0m) |
(£9.0m) |
£0.1m |
£1.2m |
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Operational Updates
Wholly Owned Business units
· Sancus Lending UK: We continued to build out our UK business. We further enhanced the leadership in Manchester during the year and also relocated to a larger office. These steps, alongside our existing London based capabilities and operations, enhance our ability to grow our UK loan book, including in bridge financing, and achieve greater operating efficiency.
· Sancus Lending Ireland: Our Irish business continued to perform well during the year, reporting continued profitability from an increased loan book. The business is well positioned to take advantage of opportunities in the Irish market and we believe further profitable growth is achievable.
Joint Venture Businesses
· Hawk Lending - Channel Islands: Our Hawk joint venture commenced operations in January 2024. Market conditions in the Channel Islands in 2024 were very challenging. The joint venture has turned a profit in 2025 whilst still navigating challenging market conditions.
· Amberton: Amberton, our private wealth and asset management joint venture (co-owned with our majority shareholder, the Somerston Group) continued to develop during the year. It plays an important part in allowing us to diversify our funding and lower our cost of capital and during the year launched ALN1, ALN2 and WLN1. Assets under management through the loan notes totalled £73.5m at the year-end (31 December 2024: £41.7m). We are planning further growth in this business in 2026.
Loan book management and reduction in non-performing loans
Continued emphasis has been placed on actively managing loans once the initial drawdown has been made. This has been particularly important against the backdrops of various market related pressures such as cost inflation. We are pleased to report that the percentage of loan book in recovery continues to reduce.
In the year ended 31 December 2025 we recognised an ECL credit under IFRS9 of £0.2m (31 December 2024: £0.4m), reflecting continued stabilised credit quality.
Diversification of funding
We continue to focus on increasing the funding capacity and diversifying the off-balance sheet funding sources of the business, on improved terms. We are seeking to work with a diversified mix of funders, both private and institutional, to match funders with loans meeting their varied risk and reward criteria.
Private Wealth Co-Funders remain one of our largest funding channels, with the majority of the Offshore loan book being co-funded. As at 31 December 2025 co-funders provided £59.3m of funding (31 December 2024: £64.3m). We continue to nurture relationships with the Co-Funder base, with these typically being Offshore private individuals and family offices. We expect that our Hawk joint-venture will enhance our capabilities here.
Loan Notes, managed by Amberton Limited, remain an important funding instrument and a part of the business that we are committed to growing. Loan Note 8, which was launched in January 2022, was £33.1m as at 31 December 2025 (31 December 2024: £33.1m). Loan Note 9 was launched in October 2024 and had an AUM of £25.6m by the year-end. ALN1, ALN2 and WLN1 had AUMs of £9.0m, £2.6m and £2.5m respectively as at 31 December 2025.
We continue to make use of an institutional funding line arranged by Pollen Street Capital ("Pollen Street") and which is designed to be complementary to our Co-Funder base and Loan Note program. At 31 December 2025 the total drawn was £150m (31 December 2024: £90m). The Pollen Street facility continues to be strategic for the business and is generally utilised in relation to funding development loans. We also recognise that the availability, cost, diversification and flexibility of funding is key to achieving our growth ambitions.
Operations
A focus on operational efficiency continued into 2025. At the end of 2025, the Group headcount was 51 (31 December 2024: 42). We believe the business is now well resourced to meet its strategic objectives and are focussing on continuous improvement and the development of our people. We may continue to selectively and carefully grow our team, not least in the UK where the establishment of a Manchester office gives us flexibility and the ability to access additional talent pools.
ESG
We recognise our responsibility to incorporate sustainability practices through our business and our environmental, social and governance ("ESG") journey continued in 2025. We continue to use the materiality assessment to assist us in prioritising the key ESG issues we face and have commenced utilising a data-driven approach to support our progress in improving our approach to managing ESG factors.
We are pleased to publish our 2025 ESG report on our website. The report identifies the progress against our key objectives set in 2022, recognises the key challenges we have faced and summarises key data. An extract of the ESG report is included on page 12 of this report.
Going Concern
The Company and Group do not have any debt liabilities that fall due within the next 12 months. We took a number of steps during 2025 to further simplify our capital structure. Based on this, the Directors are of the opinion that the Company and group has adequate financial resources to continue in operation and meet its liabilities as they fall due for the foreseeable future.
Outlook
While the macroeconomic environment remains mixed, several structural trends support our outlook:
· Continued undersupply of housing across the UK and Ireland
· Increasing regulatory pressure on traditional banks, constraining credit availability
· Growing institutional and private wealth appetite for secured private credit strategies
· Demand for specialist, relationship-led development and bridging finance
We believe the small-to-mid-market residential and mixed-use property sector remains particularly attractive. Developers continue to require flexible, responsive funding partners who combine credit discipline with sector expertise.
Beyond our core lending operations, we see opportunity in:
· Expanding our private wealth distribution capabilities
· Scaling structured credit solutions
· Selectively introducing complementary private credit strategies where we have expertise and deal flow advantage
We will pursue these opportunities with the same disciplined approach that has underpinned our recovery.
Five years ago, the Group faced significant operational and financial challenges. Through disciplined execution, strengthened leadership and careful capital management, we have rebuilt the foundations of the business. The achievement of meaningful profitability in 2025 represents an important milestone in that journey. While there remains work to do, we now operate from a position of greater stability, stronger momentum and increasing strategic flexibility. We are excited about the next phase of our development.
Rory Mepham
Chief Executive Officer
18 March 2026
The Group aims to carefully manage the risks which are inherent across its business activities in order to deliver an appropriate risk adjusted commercial return. The principal risks which the Group has consciously accepted in the pursuit of value creation are capital and liquidity risk, regulatory and compliance risk, market risk, credit risk, strategic risk, and investment risk. With regard to the FinTech activities, exposure to investment risk is a factor of the strategic, liquidity, credit and operational risks assumed by the platforms in which the Group is invested.
This section on the Group's Principal Risks should be read together with the sections on the Group's Governance Framework, the operation of the Audit and Risk Committee, as well as Note 22 which describes the sensitivity of the Group's financial results to its Financial Risk exposures. These sections explain how these risks are being managed, monitored and governed.
The table below describes the Group's assessment of the principal risks being those which have the potential to have a significant impact on the Group's business model, future performance, solvency or liquidity.
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Principal Risks |
Internal controls mitigating Risks |
Current Rating of Risks |
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Group |
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1. Capital and Liquidity Risk |
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Medium |
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Sancus' own funding is sourced primarily from the Corporate Bond (as detailed in Note 17), along with preference shares that have been injected into one of the Group's subsidiaries.
Expansion of lending and investment activities will be constrained to the extent of retained profits unless further sources of funding are secured. |
Sancus has a Treasury Committee which meets once a month to manage its capital and liquidity position, and forecasts over several years to predict longer term funding requirements.
Management of each of the operating companies balance their lending and funding and proposals to advance lending are typically contingent on sufficient funding having been secured in advance.
The business seeks to maintain a liquidity buffer at all times. |
Completion of fundraising and liability management exercises over the last couple of years has significantly improved the Group's capital and liquidity position.
Management at Group and subsidiary level are focussed on raising additional on and off balance sheet funding in order to grow lending activities and support funding commitments.
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2. Regulatory and Compliance Risk |
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Medium |
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As a Financial Services business, compliance with regulation is considered paramount within the Group, particularly with regard to the various regulators in the jurisdictions that Sancus operating entities conduct business within and the various Anti Money Laundering (AML) regulations with the regulatory landscape in all jurisdictions continually evolving.
The Company has chosen to comply with the provisions of the QCA Corporate Governance Code. Refer Page 18 for further detail.
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All entities have developed and implemented appropriate policies and procedures relating to regulatory compliance and Anti Money Laundering.
The Executive Risk Committee monitors these risks, and forthcoming regulations, with appropriate reporting from the Risk and Compliance Director and Money Laundering Reporting Officers. External, independent partners complete additional regulatory horizon scanning reviews and conduct periodic reviews of internal compliance including AML file reviews.
The Company has an appointed NOMAD, Shore Capital, whom it liaises with regularly, to ensure compliance with the AIM rules, including the Market Abuse Regulations.
The Board receives quarterly reports including, where appropriate from Money Laundering Reporting Officers, on compliance monitoring plans and any breaches identified. |
The compliance framework as described is considered to be operating effectively and has recently been enhanced to increase oversight of all risks within the Sancus lending business through the Executive Risk Committee.
Measures are in place to monitor clients against various databases to identify if any sanctions.
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3. Market risk |
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High |
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The primary market risks are considered to be interest rate and foreign exchange risk. Given the nature of the business operations, with relatively short-term lending and currencies on lending opportunities being matched (or hedged) the exposure is considered to have limited impact on its position as a going concern.
Foreign exchange risk primarily arises from the USD and Euro investments in the FinTech portfolio and Euro loans held in the Irish lending book.
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Exposures to these risks are monitored regularly by the Sancus Treasury Committee and reported to the Board on a quarterly basis.
These risks are identified and assessed at the time of entering into new transactions. |
More information on the sensitivity to these risks is contained in Note 22.
Macro-economics including increased inflation and bank base rate and euro margin fluctuations may have an effect on margin. The introduction of variable base rate loans and foreign exchange hedging are having an impact on mitigating the risk.
With changes in bank base rates, Co-Funders might look elsewhere to invest; however, variable rate Co-Funder returns should minimise this risk with investors continuing to receive attractive risk adjusted returns on asset backed lending. |
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4. Credit Risk |
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High |
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The Group has direct credit exposures through its on balance sheet lending and credit support. Indirect credit risk (potential losses to Co-Funders) could impact further business development.
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Each operational entity has its own credit policies and procedures which are the subject of at least annual review by operating entity Boards.
The respective Credit Committees take all credit decisions, monitor credit exposures on an ongoing basis and manage recoveries situations. Following Covid-19 tighter lending criteria was implemented.
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The IFRS9 provision remained comparatively steady during 2025, reflecting a stabilisation in the credit quality of the Group's on balance sheet loan portfolio and continued progress in managing legacy exposures.
See Note 22 (5) for further details.
Increases in material costs, base rate and inflation have created downside risk through potential delays in loan repayments and reduced recoveries. Increased loan management oversight will help mitigate this risk.
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5. Operational Risk - Execution of the Sancus strategy |
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Medium |
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The majority of Sancus' capital has been deployed into the various trading subsidiaries. There is a risk that the planned growth of these businesses will not be realised primarily as a result of sub optimal levels of loan origination and funding.
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The Board and Executive Risk Committee of Sancus Group recognise the challenge of building the business to meet the financial targets and actively manage all aspects of the business on an ongoing basis. Plans and budgets are in place and performance against these is monitored regularly by the management team and the Executive Risk Committee.
There continues to be strong demand from both Borrowers and Co-Funders for the lending products offered across the business, and the risk adjusted returns available to Co-Funders.
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By its nature, this risk remains an on-going area of focus for the Board, particularly with respect to business development in the UK and Ireland.
The emergence of Covid-19 created downside risk on new loan origination levels although we believe this risk has now dissipated.
IT capabilities for Sancus were further enhanced in recent years, providing Co-Funders with online interactive services and creating operational efficiencies. |
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6. Operational Risk - Operating entities |
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High |
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Loan funding is provided by a blend of institutional and co-funding models, with jurisdictional variations in the utilisation of these models. The limited availability of diverse funding presents an operational risk to continued growth of the lending model.
With the recent focus on increasing the loan book and resourcing the operation effectively, there is a risk that management of the existing loan book is under resourced and key milestones in the loan lifecycle are missed.
With reliance on various proprietary and third-party IT systems to conduct the lending operations, whilst ensuring these systems remain effective for the business, enable automation, are utilised to maximum effect, maintain data integrity and remain secure from external factors remains an ongoing challenge and presents potential risks.
|
The Executive Risk Committee of Sancus Group is in active engagement with additional institutional funding lines to increase diversity, consider the cost of funds and continue to evolve the co-funder model with the view to increase exposure across the lending operation.
The lending operation is mitigating this through the introduction of technology improving oversight of key milestones and is actively engaged in acquiring additional resource for loan management.
Introduction of new technology to complement the existing operational framework ensures elements of these risks are mitigated with effective automation and data resilience. Continual development of the existing technology and enhancements to the back-office systems ensures the systems remain secure. |
Oversight of these risks is completed by the Executive Risk Committee, with agreement on the mitigation necessary to minimise the risks and monitoring to ensure these controls are effective.
|
|
7. Investment risk - FinTech Ventures Platform Valuations |
|
Low |
|
Across the majority of the FinTech portfolio, the growth rates historically have been slower than originally anticipated and the business models have proved more capital intensive.
Many of the FinTech platforms require additional capital to fund their ongoing growth to enable them to reach profitability. There remains a risk that some platforms may not be successful in the longer term, either as a result of lack of loan funding, lack of working capital funding or difficulties in establishing a competitive position in their chosen markets.
|
The Group has board observer rights on most of the remaining investee company boards and thus is able to participate in the strategic discussions and monitor the progress on each platform.
The Group regularly monitors the progress of each business, with regular review of financial and KPI reporting.
Quarterly valuations are conducted for all investments in platforms. These are based on a variety of factors including the pricing for any recent relevant capital transactions by the respective platform or using an appropriate valuation methodology. |
As a result of the platforms taking longer to reach profitability, and given that several are seeking additional capital, the Board has valued our holding of the FinTech portfolio at Nil at the end of 2025 (2024: £Nil).
The valuations are also subject to a number of material estimation uncertainties, refer to Note 22 (4).
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Introduction and ESG ambition
We continue to focus on a data-driven approach to ESG. This section is an executive summary of Sancus' full ESG report, which will be made available on our website.
Our headline ESG objectives are:
|
Environmental |
Social |
Governance |
|
Promote the efficient use of resources by reducing the environmental impacts associated with our operations and business activities. |
Enhance our approach to social impact by supporting our people and communities to thrive. |
Strengthen our governance around decision-making, data and reporting to support our internal and external stakeholders in delivering our ESG goals. |
An important part of the overall strategy is to improve data quality, to allow us to understand our impact and identify strategies for reducing our carbon emissions and our impact on the wider environmental landscape. We acknowledge the impact the built environment may have on carbon emissions and are working with our partners to evolve sustainable practices. We continue to be committed to improving the communities we operate in through charitable work and supporting local economies. We strive to maintain high ethical standards across our business through our governance practices and continue to consider how a more diverse organisation can support these standards.
Further information will be set out in the ESG report that will be uploaded to our website at https://corporate.sancus.com/investor-relations/.
Our plan and priorities
Our ESG team has members from across our business and are supported by industry experts. The ESG team have the full support of the Executive team. We believe that as Sancus grows ESG will be a key topic. We recognise that data places an important role in setting and attaining goals and continue to strive for improved data collation. We continue to ensure appropriate resources are available to help us achieve our ESG targets.
Our ambition is for ESG to become an integrated part of Sancus and be established in all our practices. We will leverage this to deliver positive impacts for our stakeholders while continuing to help drive long-term value and growth for Sancus.
The key overarching priorities for Sancus are set out below. We have also outlined specific progress to date and next steps across our ESG objectives.
1. Improving our ESG data maturity and addressing quick wins.
2. Strengthening our ESG capability by building expertise and embedding into wider business decision-making processes.
3. Establishing targets and accelerating action on our most material ESG topics.
4. Exploring ways of leveraging ESG in the delivery of business value to influence industry change.
Our key enablers
The key enablers for us to achieve our ESG objectives are:
· Data - continuing to improve our systems and processes ensuring quality data is obtained to maximise confidence in our measurement against targets and how we report.
· Employee engagement - placing our people at the centre of our ESG strategy to understand how our business impacts on them and how they can be empowered to have an impact on our business from an ESG perspective.
· Technology - integration of technology to support business scale and enhance delivery of our ESG strategy and data collection whilst streamlining the business operations.
· Training - continued education and training of key ESG matters with a focus on building employee engagement and confidence.
As mentioned above, our full ESG report has been uploaded to our website. This includes a more detailed overview of our 2025 commitments and challenges and our objectives for 2026.
Task Force on Climate-related Financial Disclosures ("TCFD") Statement 2025
Governance - Sancus' governance around climate-related risks and opportunities
Board oversight of climate-related risks and opportunities
As set out in the Corporate Governance section the Group has elected to comply with the 2023 QCA Corporate Governance Code. The Sancus board has overall responsibility for business strategy, including setting the strategy, approach and monitoring its implementation. The board receives quarterly reports from the Executive Management, including matters relating to ESG and climate-related risks.
The CEO has responsibility for delivery of the business strategy including ESG and climate-related risk matters and is present at board meetings including those where ESG and climate-related matters are raised, with these discussions helping steer the overall strategy.
Management's role in assessing and managing climate-related risks and opportunities
Management of ESG and climate-related matters has been delegated to the Executive Management team, with representatives from across the business operations as members of the ESG Team, who provide recommendations for new initiatives, activities and overall ESG and climate-related matters strategy.
Strategy - Impacts of climate-related risks and opportunities on the business, strategy and financial planning
Climate-related risks and opportunities identified by the organisation over short, medium and long term. How climate-related risks and opportunities impact the organisation's business, strategy and financial planning.
Sancus considers risk and opportunity in the short, medium and long term:
Short: 0-1 years Medium: 1-5 years Long: 5-10 years
The core business model is the provision of short-term funding for property development and bridging. There is potential impact on the model from climate-related risks and opportunities in several ways. Sancus has identified two key categories with regard to climate-related risk and opportunity: (1) risks and opportunities related to a low-carbon economy; and (2) risks and opportunities related to the physical impacts of climate change - summarised in Table 1 below.
This allows Sancus to assess and consider climate-related risks and how the opportunities they present can be considered in developing the overall strategy.
The annual ESG report provides key data across GHG Protocol Scope 1, Scope 2 and Scope 3 emissions. As stated in the report, we continue to engage with our key suppliers to further improve data, which will allow us to better measure our GHG emissions and develop a longer term strategy on reduction.
Resilience of organisation's strategy, taking into consideration different climate-related risks scenarios, including a 2°C or lower scenario.
Sancus continues developing its requirements under TCFD, however currently does not have the capability and resources to perform climate-related scenario analysis as part of the reporting exercise. We anticipate we will be equipped to complete thorough climate scenario analysis within the next 3-4 years.
Table 1a - Summary of Sancus' climate related risks
|
Type |
|
Climate-related risk |
Potential financial impact |
Timeframe |
|
Transition risks |
Policy & legal |
Change in building regulation policy, such as imposing minimum EPC/BER ratings. |
Increased build cost for clients to meet improved policy standards. |
Medium |
|
Market |
Change in home purchaser preferences, such as a preference towards more energy efficient homes. |
Reduced demand for sale of older buildings, resulting in extended exit, or inability to sell homes. |
Long |
|
|
Reputation |
Reputational risk, such as increased scrutiny from co-funders and investors. |
Reduced availability of appropriate funding lines or increased cost of funds to meet investor expectations. |
Medium |
|
|
Physical risks |
Physical risk |
Increased severe weather events as a result of global warming and changing climates, such as increased flood risks. |
Reduced asset values due to changes in flood risk assessments by local authorities/Environment Agency. |
Medium/Long |
|
Physical risk |
Increased severe weather events as a result of global warming and changing climates, such as increased drought and erosion risks. |
Reduced asset values due to changes in subsidence assessments by local authorities/British Geological Survey. |
Medium/Long |
Table 1b - Summary of Sancus' climate related opportunities
|
Type |
Climate-related opportunity |
Potential financial impact |
Timeframe |
|
Products |
Develop lending products incentivising borrowers to meet high energy efficiency ratings. |
Increased demand for built assets resulting in improved exit strategies. |
Medium |
|
Increased interest from co-funders and investors helping maintain or decrease cost of funding. |
Medium |
Risk Management - Climate-related risk management and metrics
Processes for identifying and assessing climate related risks
Sancus continues to develop its strategy for identifying, assessing and managing climate-related risks and opportunities. The ESG Team are responsible for the overall ESG risk management framework, which includes identifying and assessing climate-related risks. The credit-risk process for all borrowers includes assessment for known climate-related risks (e.g. flood risk).
Processes for managing climate-related risks
Sancus recognises further investment in training and support for the ESG Team is fundamental to build the strategy for managing climate-related risks and is committed to providing necessary resources to achieve this.
Processes for integration of identifying, assessing and managing climate-related risks within the organisations overall risk management.
Through the Executive Risk Committee, Sancus intends to further integrate climate-related risk management into the overall risk management strategy within the next 12 months.
Metrics and Targets
Metrics used by the organisation to assess climate-related risks and opportunities in line with the strategy and risk management process. Including Scope 1, Scope 2 and Scope 3 greenhouse gas emissions (GHG) and the related risks.
We summarise below the Scope 1, 2 and 3 GHG Emissions data for 2025 and 2024.
GHG Emissions data (tCO2e)
|
|
2025 |
2024 |
|
Scope 1 |
3.950 |
3.387 |
|
Scope 2 |
3.417 |
3.189 |
|
Scope 3 |
39.410 |
40.911 |
Capturing and understanding quality emissions data is key to developing a carbon reduction strategy. Despite progress and engagement, obtaining accurate carbon emissions data from key providers can still be difficult. Whilst data quality has improved, Sancus recognises further improvements present opportunities in understanding GHG emissions and support the development of a longer term reduction strategy.
Introduction
The Board recognises the importance of a strong corporate governance culture.
The composition of the Board is the subject of ongoing review. Somerston Group had the right to nominate a candidate for appointment to the Board and presently exercises this right via the appointment of Tracy Clarke (bio noted below).
Board of Directors
The Company operates a unitary Board Structure, comprised of both Executive and Non-Executive Directors. Biographical details of the Directors can be found below. The terms of Directors' appointments are available from the Company Secretary.
On joining the Board, any new director will have received an induction through face to face meetings with existing directors, senior management and the Company Secretary.
The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company, its corporate governance responsibilities, and addressing any training or development needs of the directors.
Steve Smith - Independent Non-Executive Director
Mr Smith was formerly an Executive Director and the Chief Investment Officer of The British Land Company PLC, the FTSE 100 property investment trust, with responsibility for the group's property and investment strategy, standing down in 2013. Prior to this, Mr Smith was Global Head of Asset Management and Transactions at AXA Real Estate Investment Managers, where he was responsible for the asset management of a portfolio of assets valued at more than €40 billion on behalf of life funds, listed property vehicles, unit linked and closed end funds. Prior to joining AXA in 1999, Mr Smith was Managing Director at Sun Life Properties for over five years. Over the last decade, Mr Smith has worked extensively in governance related roles for a number of property focused organisations. Mr Smith is Chairman of the Board and is a member of the Audit and Risk Committee and Remuneration and Nomination Committee. Mr Smith was appointed to the Board on 11 May 2021. He is resident in the UK.
John Whittle - Independent Non-Executive Director
Mr Whittle has a background in large third party Fund Administration. He has worked extensively in high tech service industries and has in-depth experience of strategic development and mergers/acquisitions. He has experience of listed company boards as well as the private equity, property and fund of funds sectors. He is currently on the Board of BH Macro Limited after being appointed on 1 July 2025 and Director and Audit Chair of The Renewable Infrastructure Group Ltd ("TRIG") (both listed on the main market of the London Stock Exchange). Mr Whittle, a Chartered Accountant, has also served as Chairman of Starwood European Real Estate Finance Limited until 27 February 2026, Director and Audit Chair of Chenavari Toro Income Fund Limited (admitted to trading on the Specialist Fund Segment of the London Stock Exchange) until his resignation on 30 June 2025, Finance Director of Close Fund Services Limited (responsible for internal finance and client financial reporting), Managing Director of Hugh Symons Group PLC and Finance Director and Deputy MD of Talkland International Limited (now Vodafone Retail).
Mr Whittle was appointed to the Board, the Audit and Risk Committee and the Remuneration and Nomination Committee on 23 September 2016, after having served as an Alternate Director since December 2015. He is resident in Guernsey. Mr Whittle is Chairman of the Audit and Risk Committee, and of the Remuneration and Nomination Committee.
Tracy Clarke - Non-Executive Director
Ms Clarke is a representative of The Somerston Group ("Somerston"), the Company's largest shareholder which has the right to nominate one individual for appointment to the Board. Ms Clarke joined Somerston in 2016 and acts as the Group's Chief Operating Officer. Ms Clarke is also Managing Director of Carlton Management Services Limited, a licensed Jersey trust company business. Prior to joining Somerston, Ms Clarke worked for Deutsche Bank in Jersey and Zurich for over 10 years, specialising in financial Intermediary and external asset manager business. Ms Clarke is a Fellow of the Institute of Chartered Accountants in England and Wales and holds the CISI Investment Advice Diploma. Ms Clarke was reappointed to the Board on 31 March 2024 and is a member of the Audit and Risk Committee and Remuneration and Nomination Committee.
Rory Mepham - Executive Director
Rory joined Sancus in January 2021, assuming the role of Interim CEO on 1 July 2021 and was then confirmed as CEO and board member on 23 November 2021. Joining Sancus from Somerston where he managed their European property platform which includes businesses in the hotel, retail, land development, student housing and PRS sectors. Rory has over 20 years experience in the UK and European property market. He has spent his career working with institutional capital and has an extensive track record in M&A, corporate finance, capital raising, debt finance, investment management and property development. Rory holds an MBA from the Cranfield School of Management, a BSc (Hons) in Land Management from the University of Reading and qualified as a member of the Royal Institute of Chartered Surveyors (MRICS).
Executive Management Team
Rory Mepham - Chief Executive Officer
See above.
Keith Lawrence - Chief Financial Officer
Keith was appointed to the Executive Management Team on 1 April 2024. Keith has over 30 years experience in the financial services industry. After qualifying as a Chartered Accountant with KPMG Keith worked in investment banking for 20 years, focussing primarily on financial services clients. Prior to joining Sancus Keith was the CFO of an innovative private equity backed residential construction business. Keith holds a BA(Econ)(Hons) in Accounting and Finance from the University of Manchester. Keith joined Sancus in February 2024.
James Waghorn - Chief Investment Officer
James was appointed to the Executive Management Team on 8 March 2022. James has over 14 years experience in the UK and European property market. James has extensive experience across the corporate real estate, investment and property development sectors. For the past 6 years James has led Somerston's land development business, a strategic land and development focused business with capacity for in excess of 2,350 units within its strategic portfolio. James holds a BSc in Investment and Finance in Property from the University of Reading and is MRICS accredited. James joined Sancus in January 2021.
GOVERNANCE FRAMEWORK
The Board is committed to maintaining high standards of corporate governance throughout the Company's operations and to ensuring that all of its practices are conducted transparently, ethically and efficiently. The Board believes that scrutinising all aspects of the Company's business and reflecting, analysing and improving its procedures will minimise the potential for downside risk and will preserve shareholder value. In compliance with the AIM Rules for Companies, published March 2018, the Company has chosen to comply with the provisions of the 2023 QCA Corporate Governance Code (the "QCA Code"). The Company is also mindful of the provisions of the Finance Sector Code of Corporate Governance, as amended by the Guernsey Financial Services Commission in November 2021.
The Board believes that applying the principles and reporting against the provisions of the QCA Code accurately reflects the nature, scale and complexity of the business and enables the Board to provide information to shareholders on its activities in accordance with the principles set out in a recognised governance framework. Furthermore, through applying the relevant provisions the Company is better positioned to mitigate downside risk and in doing so, preserve long-term shareholder value. The Company's corporate governance framework has been based on these principles and is designed to deliver the Group's strategy, and the application of such principles to the operation of the Board ensures that its decision-making processes remain focussed on the long-term sustainable success of the Company.
As at 31 December 2025, the Company complied substantially with the relevant provisions of the QCA Code and it is the intention of the Board that the Company will comply with these provisions throughout the year ending 31 December 2026, save with regard to the following:
· The appointment of a Senior Independent Director: Given the size and composition of the Board, the Board does not consider it is necessary to appoint a Senior Independent Director. The Board considers that all the independent Directors have different qualities and areas of expertise on which they may lead where issues arise and to whom concerns can be referred.
· Internal audit function: The Board has considered the need for an internal audit function and is satisfied that the compliance policies, procedures and reporting mechanisms in place throughout the Group are sufficient, and that implementing a separate internal audit function would be unnecessary. This requirement is assessed annually by the Audit and Risk Committee.
How we apply the QCA Code
The Company has established specific formally constituted committees and implemented certain policies, to ensure that:
· It is led by an effective Board which is collectively responsible for the long-term sustainable success of the Company and establishes a culture whereby the tone is set from the top which is consistent with the objectives, strategy and business model of the Group.
· The Board and its committees have the appropriate balance of skills, experience, independence, and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively.
· The Board establishes a formal and transparent arrangement for considering how it applies the corporate reporting, risk management, and internal control principles and for maintaining an appropriate relationship with the Company's auditors.
· There is a dialogue with shareholders based on the mutual understanding and alignment of objectives, conducted primarily through the CEO and the Corporate Broker.
Risk management remains a key area of focus during Board meetings. Details of the Company's risk management and internal control framework is set out on pages 9-11.
Composition and Independence of the Board of Directors
The Board of Directors is responsible for ensuring the affairs of the Company are properly managed through formulating, reviewing and approving the Company's strategy, budgets, and corporate actions and that oversight, scrutiny and challenge is applied to Executives responsible for the day-to-day activities of the Group. The Company seeks to deliver long-term growth for shareholders and maintain a flexible, efficient and effective management framework within an entrepreneurial environment.
It is important that the Board itself contains the right mix of skills and experience in order to deliver the strategy of the Company. As such, the Board is comprised of:
· Two Independent Non-Executive Directors, one of which serves as the Chairman, who is responsible for leadership of the Board and ensuring its effectiveness on all aspects of its role.
· One Non-Executive Director who, whilst sharing the fiduciary and statutory duties of the independent directors, is also an executive director of The Somerston Group, a significant shareholder of the Company, and therefore not considered independent under the QCA Code.
· One Executive Director, who is also a member of the Group's Executive Committee and is therefore not considered independent under the QCA Code.
The Board is comprised of individuals holding professional qualifications and experience relevant to the activities of the Company. A biography of each of the Directors is included on pages 16 and 17. The time requirement expected from each of the Directors is set out in writing in their respective appointment letters.
Shore Capital has been appointed as the Company's Corporate Broker and Nominated Adviser under the AIM Rules and advises on compliance with the AIM Rules, corporate communications and acts as financial adviser to corporate actions. Additionally, the Company has appointed a professional Company Secretary who assists the Board of Directors in preparing for and running effective board meetings, including the timely dissemination of appropriate information. The Company Secretary provides guidance to the extent required by the Board on certain aspects of the legal and regulatory environment, within which the Company operates.
The Board believes that long serving Directors should not be prevented from forming part of the Board or from acting as Chairman and no limit has been imposed on the overall length of service of the Directors. Each Director will retire and seek reappointment at every third annual general meeting, with those serving for nine years or more subject to reappointment annually. The Board meets on at least a quarterly basis during the financial year.
The Board has appointed several committees to support it in different areas of the business; each with formal terms of reference, with specific roles as set out below.
The Board undertakes an annual evaluation of its own performance, the performance of its formally constituted committees and that of individual Directors. This includes a formal process of self-appraisal reviewing the balance of skills, experience, independence and diversity present on the Board, and individual director performance, contribution and commitment to the Group to ensure that the Board and its committees continue to operate effectively, or to identify areas where action is required. The remainder of the Board is responsible for evaluating the performance of the Chairman. The Chairman also has responsibility for assessing the individual Board members' training requirements. No significant findings were identified in the 2025 evaluation which required further action.
The Directors remain mindful of the benefits which can flow from increasing the level of diversity represented on the Board including, but not limited to, cultural, gender, experience and background. Such factors will be taken into consideration by the Nomination Committee during any selection process.
Executive Management Team
As at the year end, the Company's Executive Management Team comprised Rory Mepham (Chief Executive Officer), Keith Lawrence (Chief Financial Officer), and James Waghorn (Chief Investment Officer) (together the "Executive Management Team" or "Management"). Management are responsible for the day-to-day management of the Company's operations. The non-executive independent Directors monitor and evaluate the performance of Management on an ongoing basis.
The Audit and Risk Committee conducts formal meetings at least twice a year. The Audit and Risk Committee's key duties include:
· Monitoring the integrity of the financial statements of the Group, including its annual and half-yearly reports and any other formal announcement relating to its financial performance, reviewing, challenging (where necessary) and reporting to the Board on significant financial reporting issues and judgements which they contain having regard to matters communicated to it by the auditor, and how they were addressed.
· Reviewing the Group's internal financial controls and the Group's internal control and risk management systems.
· Making recommendations to the Board for it to put to the shareholders for their approval in general meeting in relation to the appointment, re-appointment or removal of the external auditor and to recommend the remuneration and terms of engagement of the external auditor.
· Monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into account relevant professional and regulatory requirements.
· In conjunction with executive management, advise the Board on the overall risk appetite, tolerance and strategy of the Group, current risk exposures and future risk strategy.
· Keep under review the Group's overall risk assessment processes that inform the Board's decision making, ensuring both qualitative and quantitative metrics are used.
The Audit and Risk Committee has three members, two of whom are independent, non-executive directors and one of whom is a non-executive director, and at least one member has recent and relevant financial experience. The current members of the Committee are John Whittle as the Chairman, Steve Smith and Tracy Clarke.
The Audit and Risk Committee is supported by a risk management and oversight process employed by the Executive Management Team and receives reports twice a year on key risks and developments during the period, or as otherwise required in the case of a material development.
The terms of reference of the Audit and Risk Committee are available from the Company Secretary.
The purpose of the Remuneration and Nomination Committee is to determine and agree with the Board the framework or broad policy for the remuneration of the Company's Directors, senior executives, and any bonus-related arrangements in place by the Company as well as to consider the structure, size and composition of the Board. The key duties of the Remuneration and Nomination Committee include:
· Determining and agreeing with the Board the framework or broad policy for the remuneration of the Company's Chairman, executive and non-executive directors and such other members of the management as it is designated to consider.
· Reviewing the ongoing appropriateness and relevance of the remuneration policy.
· Reviewing the structure, size and composition of the Board.
· Considering the succession planning for Directors and the Executive Management Team.
· Reviewing the leadership needs of the organisation.
· Identifying candidates for appointment to the Board.
The Remuneration and Nomination Committee has three members, all of whom are non-executive directors and two are independent. The current members of the committee are John Whittle as the Chairman, Steve Smith and Tracy Clarke.
The terms of reference of the Remuneration and Nomination Committee are available from the Company Secretary. Please refer to the Remuneration Report on page 26 for details of fees paid to the Directors during the year.
Meetings and attendance
The Directors meet on a quarterly basis ('Quarterly' meetings per the table below) and at other unscheduled times ('Other' meetings per the table below) when necessary to assess Group operations and the setting and monitoring of strategy and performance.
The table below, details the attendance of the Board at eligible Board and Committee meetings during the year, noting that certain Directors retired or were appointed during the course of the year as set out below the table:
|
|
Board |
|
|
|
|
|
Quarterly |
Other |
Remuneration & Nomination Committee |
Audit and Risk Committee |
|
Total number of meetings held during the year |
4 |
5 |
1 |
2 |
|
Steve Smith |
4 of 4 |
3 of 5 |
1 of 1 |
2 of 2 |
|
John Whittle |
4 of 4 |
4 of 5 |
1 of 1 |
2 of 2 |
|
Tracy Clarke |
4 of 4 |
3 of 5 |
1 of 1 |
2 of 2 |
|
Rory Mepham |
4 of 4 |
4 of 5 |
N/A |
1 of 2* |
*by invite only
Relations with Stakeholders
The Board's advisers and the Executive Management Team maintain regular dialogue with key shareholders, the feedback from which is reported to the Board and the Chairman. Shareholders who wish to communicate with the Board should contact the Company Secretary in the first instance, whose contact details can be found on page 82.
The Board also regularly monitors the shareholder profile of the Company. All shareholders have the opportunity to and are encouraged to attend the Company's annual general meeting at which members of the Board are available in person to meet shareholders and answer questions.
Whilst the primary duty of the Directors is owed to the Company as a whole, the Board takes into consideration the interests of all key stakeholder groups as part of its decision-making process and particular consideration is given to the impact of any decision on holders of its securities, the Co-Funders to the underlying loan businesses, and providers of the Group's long-term debt capital. The Board also recognises the crucial roles played by those involved throughout the Group's operations who contribute to delivering strategy, including staff and key service providers, to ensure a continued alignment of interests between their activities and those of the Company.
Terms of Reference of Committees
Committee Terms of Reference are available from the Company Secretary.
The Audit and Risk Committee
The Audit and Risk Committee has a formal terms of reference mandate documenting the duties and responsibilities which it has been delegated by the Board. These are available from the Company Secretary. The Audit and Risk Committee has been in operation throughout the year under review.
Chairman and Membership
The Audit and Risk Committee comprises of John Whittle as Chairman, Steve Smith and Tracy Clarke. Only Non-Executive Directors serve on the Audit and Risk Committee and members of the Audit and Risk Committee have no links with the Company's external auditor and are independent of the Executive Management Team. The Audit and Risk Committee meets not less than twice a year in Guernsey and meets the external auditor at least twice a year virtually. The identity of the Chairman of the Audit and Risk Committee is reviewed on an annual basis and the membership of the Audit and Risk Committee, and its terms of reference are kept under review. Regular attendees at the Audit and Risk Committee include the CEO, CFO and CIO.
Duties
The Audit and Risk Committee is responsible for monitoring the financial reporting process, including the appropriateness of the Company's accounting policies and the effectiveness of the Company's risk management and internal control systems. The Committee continues to spend a considerable amount of time reviewing significant risks and areas of judgement. In particular, the Committee conducts detailed reviews and analysis of the valuations prepared by the Executive Management Team of the FinTech Ventures investments, the investment in JV value in use models to assess if any impairment might be required and the Expected Credit Loss model. These valuations are key elements in the Group's financial statements and the Audit and Risk Committee questions these carefully.
External Audit
The Audit and Risk Committee is responsible for overseeing the relationship with the external auditor, including the ongoing assessment of the auditor's independence. The Committee makes recommendations to the Board with regard to the appointment of the external auditor and approves their terms of engagement and fees. The Committee discusses and agrees the nature and scope of the audit as set out in the audit scoping report, reviews the results of the audit as described in the audit completion report and the ongoing independence and objectivity of the external auditor.
Processes are in place to safeguard the independence of the external auditor, including controls around the use of the external auditor for non-audit services. The external auditor also provides the Audit and Risk Committee with further assurance as to the procedures that it maintains to preserve objectivity and confirmation that it remains independent. All non-audit services are pre-approved by the Audit and Risk Committee. No non-audit services were provided in the year.
Effectiveness of External Auditor
The Committee assessed the effectiveness of the external auditor and the external audit process for 2025 through a number of steps, including:
· Agreement of their engagement letter and fees.
· Review of the external audit plan.
· Meetings with the external auditors.
· Considering the extent of any non-audit services provided by the external auditors.
· Considering the external auditors' fulfilment of the agreed audit plan and variations from it.
· Considering the report from the auditor highlighting any major issues that arose during the course of the audit.
· Conducting interviews to obtain feedback from the Executive Management Team to evaluate the performance of the audit team.
For the audit for the year ended 31 December 2025, the Audit and Risk Committee was satisfied that the audit was effective and that there were no factors which had any bearing on the independence or effectiveness of the external auditor.
Financial Reporting
The Audit and Risk Committee reviews, considers and, if thought appropriate, recommends to the Board the approval of the contents of the half yearly report and annual report and audited financial statements together with the external auditor's report thereon. It focuses particularly on compliance with legal requirements and accounting standards. The ultimate responsibility for reviewing and approving the half year report and annual report and audited financial statements remains with the Board.
The Audit and Risk Committee provides a forum through which the external auditor reports to the Board and the external auditor is invited to attend Audit and Risk Committee meetings at which annual and half yearly financial statements are considered. After discussions with the Executive Management Team and external auditor, the Audit and Risk Committee determined that the key risks of misstatement of the Group's financial statements relate to the valuation of financial assets at fair value through profit or loss, the valuation and recoverability of the investment in JV, loan impairments and revenue recognition.
Freely tradeable market prices are not available for the majority of the Group's financial assets, including the carrying value of the investment in JV, which are therefore based on a discounted cash flow basis. Investment in JV impairment testing is carried out annually or sooner where an indicative event of impairment has been identified. As set out in Note 10 to the financial statements, on 5 December 2023, the Group sold its Jersey operations in exchange for a 50% shareholding in a new joint venture, Hawkbridge Limited. The goodwill attributable to these Jersey operations has therefore been fully transferred to Hawkbridge Limited as part of the consideration.
For the valuations of the FinTech Ventures portfolio, the Executive Management Team provides a detailed valuation report on a quarterly basis. The Executive Management Team has confirmed to the Audit and Risk Committee that the valuation methodology has been applied consistently during the year. The accounting policies are described in detail in Note 2 (f) to the financial statements.
The Audit and Risk Committee has assessed the processes around the expected credit loss provisions recorded in respect of the Group's loan assets and reviewed the IFRS 9 model adopted at year-end which has been approved by the credit committee.
The accounting policies for revenue recognition are described in detail in Note 2 (o) to the financial statements. The Audit and Risk Committee has reviewed the revenue recognition policies of the Group and has determined that they are in accordance with the accounting standards and have been applied consistently.
After due consideration, the Audit and Risk Committee recommends to the Board that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's performance, business model and strategy.
Non-Audit and audit related fees paid to the External Auditors
During 2025 no non-audit fees were paid to Moore Kingston Smith LLP, the external auditors. £25,500 was paid to Moore Kingston Smith LLP for audit related services, being the half year review. There is no perceived threat to auditor independence given the nature of the services provided and the safeguards in place.
During 2025, management continued to enhance its reporting on risk management to the Board and the Audit and Risk Committee, which cover the operation of the Company, its wholly owned subsidiaries and JV. The Audit and Risk Committee has received and considered these reports on three occasions, which has been the basis for its conclusion below.
In addition to the review of risk management reports, and in accordance with the guidance published in the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting by the Financial Reporting Council (the "FRC"), the Audit and Risk Committee has reviewed the Company's internal control procedures and concluded that these are adequate to manage the current risk profile.
A robust, ongoing process of Risk Management and Internal Control
The Board and Executive Management Team are responsible for safeguarding the assets of the Group through establishing effective systems of risk management and internal control. This responsibility is shared by the Directors of subsidiary companies, who are similarly responsible for safeguarding the assets of these companies.
The Board is also responsible for deciding on whether the nature and extent of risks taken within the Group are within its risk appetite. Such risks have been formally defined (refer page 9), setting the basis for the design and implementation of the Group's internal control framework.
On behalf of the Board, the Audit and Risk Committee oversees the Group's risk management and internal control systems. These systems are designed to ensure proper accounting records are maintained and that internal and published financial information is reliable, and that the assets of the Group are safeguarded. Such a system of internal controls can only provide reasonable and not absolute assurance against misstatement or loss.
Critical components of the Group's internal control framework include the documented policies which describe how each risk is to be managed and governed and the governance committees established in terms of such policies, which have mandates describing how they should operate, what reports they should receive and how they should govern the management of principal risks. Such policies have been implemented at Company as well as subsidiary levels.
On a semi-annual basis, the Executive Management Team review the key risks across the Group to ensure they are being managed within the Company's risk appetite. Action plans are drawn up if any risks are considered to be outside of the Company's risk appetite and these are monitored on a regular basis until they return to levels back within the risk appetite.
On a semi-annual basis, the Board and/or Audit and Risk Committee receive reports on risk management, the key risks and the exposures outstanding. Also included in these reports are the results of the Executive Management Team's risk and issue identification discussions noted above. These meetings also provide the Directors with the opportunity to consider any other issues which management may not have identified and give direction on any additional risk management actions which might be required.
Insurance
The Sancus and subsidiaries insurance programme is subject to annual review each year, with cover generally renewed in April of the following year. A significant amount of Insurance cover is held for Public Indemnity, Directors' and Officers' liability, Cyber, and Crime. Appropriate office and travel insurance is also in place.
During 2025, the Committee did not receive any reports relating to whistleblowing across the Group.
On behalf of the Audit and Risk Committee
John Whittle
Chairman
Audit and Risk Committee
18 March 2026
Introduction
An ordinary resolution for the approval of the annual remuneration report will be put to the shareholders at the annual general meeting to be held in 2026.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee comprises of John Whittle as Chairman, Steve Smith and Tracy Clarke. The key duties include, but are not limited to, agreeing a framework for Director remuneration, ensuring management staff are appropriately incentivised to enhance performance, and reviewing the effectiveness of the remuneration policy on an on-going basis. No Director is involved in determining their own remuneration.
Remuneration Policy
In February 2020 the Remuneration Policy was approved and adopted. The Company is committed to the objective of maximising shareholder return in the longer term. The remuneration policy aims to be competitive, aligned with shareholder interests and relatively simple and transparent. The Board takes into consideration the views of significant shareholders when determining the remuneration of directors.
The objective is to put in place a new remuneration package that, as a whole:
· Aligns the interests of employees with that of shareholders and the success of the Company.
· Is appropriately benchmarked, such that it aids retention and recruitment.
· Meets applicable legal or regulatory requirements, is tax efficient and simple to implement and administer.
The Board is currently reviewing the Remuneration Policy against these objectives.
The Policy is divided into two parts; the first part in relation to the remuneration of the non-executive directors of the Company, and the second part in relation to the remuneration of the Executive Directors of the Company.
Part 1 - Remuneration Policy of Non-Executive Directors
Each Non-Executive Director receives a fixed fee per annum based on their role and responsibility within the Company and the time commitment required. It is not considered appropriate that Non-Executive Directors' remuneration should be performance related and none of the Non-Executive Directors are eligible for pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as non-executive directors of the Company. Shares held by the Non-Executive Directors are disclosed in the Annual Report.
Pursuant to Article 30.3 of the Company's Articles of Incorporation (the "Articles") the Board may award additional remuneration to any Director engaged in exceptional work at the request of the Board on a time spent basis to compensate for the additional time spent over their expected time commitment.
The total remuneration of the Non-Executive Directors has not exceeded the £300,000 per annum limit (excluding amounts payable in respect of any out-of-pocket expenses pursuant to Article 30.2 or any additional remuneration awarded pursuant to Article 30.3) pursuant to an ordinary resolution passed at the Annual General Meeting of the Company held on 19 May 2016.
The Articles provide that Non-Executive Directors retire and offer themselves for re-election‑ at the first annual general meeting after their appointment and at least every three years thereafter. A Non-Executive Director's appointment may at any time be terminated by and at the discretion of either party upon three months' written notice. A Non-Executive Director's appointment will terminate immediately without notice (or payment in lieu of notice) if such director is not re-appointed at a General Meeting of the Company (if required under the Articles), if such director is removed as a director at a General Meeting of the Company, or if such director resigns or ceases to be a director in accordance with the provisions of the Articles.
The terms and conditions of appointment of each Non-Executive Director are available for inspection at the Company's registered office.
The last independent remuneration review was carried out in July 2014. A Long Term Incentive Plan was established for Senior Management during 2023, further details of which are set out below.
For comparative purposes the table below sets out the Non-Executive Directors' remuneration approved and actually paid for the year to 31 December 2024 as well as that proposed for the year ended 31 December 2025 (to be approved at the 2026 AGM).
|
Director |
Role |
Base for 2025 |
Additional fees for 2025 |
Total fees for 2025 |
Base for 2024 |
Additional fees for 2024 |
Total fees for 2024 |
|
Steve Smith |
Non-Executive Director and Chairman of the Board |
£35,000 |
£15,000 for Chairman of the Board |
£50,000 |
£35,000 |
£15,000 for Chairman of the Board |
£50,000 |
|
John Whittle |
Non-Executive Director, Chairman of the Audit and Risk Committee and Chairman of the Remuneration and Nomination Committee |
£35,000 |
£5,000 for Chairman of the ARC and £2,500 for Chairman of Rem & Nom Co |
£42,500 |
£35,000 |
£5,000 for Chairman of the ARC and £2,500 for Chairman of Rem & Nom Co |
£42,500 |
|
Tracy Clarke* |
Non-Executive Director |
£35,000 |
- |
£35,000 |
£26,250 |
£32,500 |
£58,750 |
|
Total |
|
£105,000 |
£22,500 |
£127,500 |
£96,250 |
£55,000 |
£151,250 |
* Ms. Clarke served as interim Group CFO from 1 January 2024 to 31 March 2024 and received the pro rata portion of an annual salary of £130,000. She then served as non-executive director from 1 April 2024 to 31 December 2024 and during which she received a pro-rata portion of her annual fees of £35,000.
Part 2 - Remuneration Policy of Executive Directors (audited)
For comparative purpose the following table sets out remuneration paid to Executive Directors for the years ended 31 December 2025 and 31 December 2024, excluding all reasonable expenses incurred in the course of their duties which were reimbursed by the Company.
|
|
31 December 2025 |
31 December 2024 |
|||||||
|
Director |
Base Salary |
Cash Bonus |
Pension Contribution |
Long-Term Incentive Scheme (2) |
Total |
Base Salary |
Cash Bonus |
Pension Contribution |
Total |
|
Rory Mepham |
£242,500 |
£95,000 |
£12,125 |
£27,500 |
£377,125 |
£231,250 |
£65,000 |
£11,563 |
£307,813 |
|
Tracy Clarke (1) |
- |
- |
- |
- |
- |
£32,500 |
- |
- |
£32,500 |
|
Total |
£242,500 |
£95,000 |
£12,125 |
£27,500 |
£377,125 |
£263,750 |
£65,000 |
£11,563 |
£340,313 |
1 As noted above, Ms Clarke served as Interim Group CFO from 30 March 2023 until 31 March 2024.
2 Represents the value of nil-cost share options that vested in connection with the LTIP award granted in 2023 and where the vesting conditions relate to the operating profit achieved for the year ended 31 December 2025. See additional disclosure below.
Long Term Incentives
The Board introduced a Long Term Incentive Plan ("LTIP") for Senior Management during 2023. An initial grant of share awards was made to Rory Mepham and James Waghorn as follows:
|
|
Value at grant of share awards |
No. of shares |
|
Rory Mepham |
£110,000 |
22,000,000 |
|
James Waghorn |
£70,000 |
14,000,000 |
These share awards vest in 2026, 3 years after grant. The level of vesting was subject to the achievement of operating profit targets measured up to the end of the 2025 financial year. Based on the profit before tax achieved for the year the 25% level of vesting has been achieved.
|
|
Operating Profit achieved in year ended 31 December 2025(1) |
Level of vesting |
|
Maximum |
£4m |
100% |
|
|
£3m |
75% |
|
|
£2m |
50% |
|
Threshold |
£1m |
25% |
|
Below threshold |
Below £1m |
0% |
1 Defined as operating profit after all debt financing including ZDP and Bonds, loan loss provisions/recoveries and a provision for other staff cash bonuses. Operating profit is measured pre-exceptional items and taxation.
The 2024 Annual General Meeting approved share awards to members of the Executive Management and certain members of senior management. The awards made to the Executive Management Team were as follows:
|
|
Value at grant of share awards |
No. of shares |
|
Rory Mepham |
£110,000 |
22,000,000 |
|
James Waghorn |
£80,000 |
16,000,000 |
|
Keith Lawrence |
£40,000 |
8,000,000 |
These awards will vest in 2027, 3 years after grant, and the level of vesting will be subject to the achievement of operating profit targets measured up to the end of the 2026 financial year.
|
|
Operating Profit achieved in year ending 31 December 2026(1) |
Level of vesting(2) |
|
Maximum |
£5m |
100% |
|
|
£4m |
80% |
|
|
£3m |
60% |
|
|
£2m |
40% |
|
Threshold |
£1m |
20% |
|
Below threshold |
Below £1m |
0% |
1 Defined as operating profit after all debt financing including ZDP and Bonds, loan loss provisions/recoveries and a provision for other staff cash bonuses. Operating profit is measured pre-exceptional items and taxation.
2 The level of vesting between the operating profit thresholds outlined above shall be adjusted on a sliding scale basis for every £0.1m change in the level of operating profit achieved between the thresholds outlined above.
The 2025 Annual General Meeting approved share awards to members of the Executive Management Team and certain members of senior management. The awards made to the Executive Management were as follows:
|
|
Value at grant of share awards |
No. of shares |
|
Rory Mepham |
£ 117,500 |
23,500,000 |
|
James Waghorn |
£ 85,000 |
17,000,000 |
|
Keith Lawrence |
£ 82,500 |
16,500,000 |
This award will vest in 2028, 3 years after grant, and the level of vesting will be subject to the achievement of operating profit targets measured up to the end of the 2027 financial year.
|
|
Operating Profit achieved in year ending 31 December 2027(1) |
Level of vesting(2) |
|
Maximum |
£5m |
100.0% |
|
|
£4m |
73.3% |
|
|
£3m |
46.8% |
|
Threshold |
£2m |
20.0% |
|
Below threshold |
Below £2m |
0% |
1 Defined as operating profit after all debt financing including ZDP and Bonds, loan loss provisions/recoveries and a provision for other staff cash bonuses. Operating profit is measured pre-exceptional items and taxation.
2 The level of vesting between the maximum and minimum operating profit thresholds shall be adjusted on a sliding scale basis for every £0.1m change in the level of operating profit achieved.
Proposals for a further grant of share awards to members of the Executive Management and certain members of senior management will be made to shareholders for their approval at the 2026 Annual General Meeting.
Discretionary Executive Bonus
£220k of discretionary cash bonuses were paid to the Executive Management Team in respect of the year ended 31 December 2025 (2024: £185k).
On behalf of the Remuneration Committee
John Whittle
Remuneration Committee Chairman
18 March 2026
DIRECTORS' REPORT
The Directors submit their Report together with the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Shareholders' Equity, the Consolidated Statement of Cash Flows and the related Notes for the year ended 31 December 2025, which have been prepared in accordance with UK-adopted International Accounting Standards, in accordance with any relevant enactment for the time being in force, and are in agreement with the accounting records, which comply with Section 238 of The Companies (Guernsey) Law, 2008.
Principal Activities
The Company was incorporated and domiciled in Guernsey, as a company limited by shares and with limited liability on 9 June 2005 in accordance with The Companies (Guernsey) Law, 1994 (since superseded by The Companies (Guernsey) Law, 2008). From January 2023 the Company changed its management and control from Guernsey to Jersey. Until 25 March 2015, the Company was Authorised as a Closed-ended Investment Scheme and was subject to the Authorised Closed-ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission ("GFSC"). On 25 March 2015, the Company was registered with the GFSC as a Non-Regulated Financial Services Business, at which point the Company's authorised fund status was revoked. The Company's Ordinary Shares were admitted to the AIM market of the London Stock Exchange on 5 August 2005. The ZDPs were listed and traded on the main market of the London Stock Exchange with effect from 5 October 2015 and following shareholder approval now have a maturity date of 5 December 2030. The ZDP shares were delisted in December 2024. The Company's 2021 bonds were repaid on 21 December 2021 and a total of £12.575m principal of new bonds (the "New Bonds") were issued on 22 December 2021. Somerston subscribed to a further £2.425m bonds on 1 December 2022, £2.0m in December 2024 and £3.3m in December 2025 taking the Company's aggregated bond principal to £20.3m of which £16.9m is now held by Somerston. In October 2024 the maturity date of the Bond instrument was extended to October 2027 from December 2025 and the quarterly coupon increased to 8% p.a. from 7% p.a. In June 2025, bondholders approved an amendment to the terms of the bonds to introduce a payment-in-kind interest option, allowing bondholders to elect to receive interest rolled up and paid on maturity at an increased rate of 8.5% per annum, instead of the 8% cash coupon paid quarterly.
The Company does not have a fixed life and the Articles do not contain any trigger events for a voluntary liquidation of the Company.
Following the approval by Shareholders at the Company AGM on 19 May 2016, the Company changed its status from being an investing company for the purpose of the AIM rules to a trading Company.
The Executive Management Team is responsible for the day-to-day management of the Company.
The Group
As at 31 December 2025, the Group comprises the Company and the entities disclosed in Note 20 to the financial statements.
Directors and Executive Management Team of the Company
A list of the Directors and the Executive Management Team who served the Company during the year and as at the date of this report is shown on pages 16 and 17.
Results and Dividends
The Group results for the year are set out on pages 39-42. No Dividends were paid during the year (31 December 2024: Nil).
Substantial Shareholdings
As at 31 December 2025, the Company was aware of the following substantial shareholders who held 3% or more of issued share capital of the Company:
|
|
Number of Ordinary Shares held |
Percentage of total ordinary shares issued held |
|
Somerston Group |
802,548,928 |
73.9% |
|
Philip J Milton & Company plc |
93,522,450
|
8.6% |
Directors' Interests
As at 31 December 2025, the Directors had the following beneficial interests in the Ordinary Shares of the Company:
|
|
31 December 2025 |
31 December 2024 |
||
|
|
No. of Ordinary Shares Held |
% of Ordinary Shares Held |
No. of Ordinary Shares Held |
% of Ordinary Shares Held |
|
|
|
|
|
|
|
John Whittle |
2,138,052 |
0.20 |
2,138,052 |
0.37 |
|
Rory Mepham |
7,000,000 |
0.64 |
6,000,000 |
1.03 |
Statement of Directors' Responsibilities
The Directors are responsible for preparing the financial statements in accordance with UK-adopted International Accounting Standards and The Companies (Guernsey) Law, 2008 for each financial period to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the profit or loss for that period. International Accounting Standard 1 requires that financial statements present fairly for each financial period the Group's financial position, financial performance and cash flows. This requires faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's "Framework for the preparation and presentation of financial statements". In virtually all circumstances a fair presentation will be achieved by compliance with all UK adopted International Accounting Standards.
In preparing these financial statements, the Directors are required to:
· Ensure that the financial statements comply with the Memorandum and Articles of Incorporation and UK-adopted International Accounting Standards.
· Select suitable accounting policies and apply them consistently.
· Present information including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information.
· Make judgements and estimates that are reasonable and prudent.
· Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements have been properly prepared in accordance with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors also confirm that the annual report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and Company's performance, business model and strategy.
Internal Controls Review
Taking into account the ongoing work of the Audit and Risk Committee in monitoring the risk management and internal control systems on behalf of the Board the Directors, the latter has conducted a robust assessment of the principal risks and uncertainties faced by the Group as set out on pages 9-11 and is satisfied that each of these has been properly identified and is being effectively managed through the operation of appropriate internal controls and risk management systems, within the constraints of the resources of the Group.
Statement as to Disclosure of Information to Auditor
The Directors who held office at the date of approval of this Directors' Report confirm that:
· There is no relevant audit information of which the Company's auditors are unaware.
· The Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
Auditor
Moore Kingston Smith LLP have indicated their willingness to continue in office and a resolution to re-appoint Moore Kingston Smith LLP will be tabled at the forthcoming AGM.
Going Concern
The Group has reported an operating loss of £1.7m (2024: £2.3m) for the year and an overall profit of £1.0m (2024: £nil). As at 31 December 2025 the Group had net assets of £1.1m (2024: net liabilities of £2.1m), including cash and cash equivalents of £3.2m (2024: £2.5m).
The Directors have considered the going concern basis in the preparation of the financial statements as supported by the Directors' assessment of the Company's and Group's ability to pay its liabilities as they fall due and have assessed the current position and the principal risks facing the business with a view to assessing the prospects of the Company. The Directors have prepared a cash flow forecast for the period to 30 June 2027 which shows that the Company and the Group will have sufficient cash resources to meet their ongoing liabilities as they fall due for at least twelve months from the date of approval of these financial statements. Following an extension to the maturity date of preference shares in issue by one of the Company's loan financing subsidiaries, the Company does not have any debt liabilities that fall due or expire within the next 12 months. Based on this the Group has adequate financial resources to continue in operation and meet its liabilities as they fall due for the foreseeable future.
It is expected that equity or junior capital may be required to facilitate an increase in drawdowns from the institutional funding lines that the Company has. The Company's largest shareholder, Somerston has entered into a junior capital commitment which supports the Company's growth plans. The Company will be looking at other options available to raise such additional growth capital over the course of the year if or as required.
The Directors therefore believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
Board Succession
The Directors remain focussed on ensuring the Board is comprised of individuals with the requisite skills, knowledge, experience and diversity to operate effectively and to meet the future leadership needs of the Company.
Independent auditor's report to the members of Sancus Lending Group Limited
Opinion
We have audited the Group financial statements of Sancus Lending Group Limited (the 'Group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted International Accounting Standards.
In our opinion the Group financial statements:
· give a true and fair view of the state of the group's affairs as at 31 December 2025 and of the group's profit for the year then ended;
· have been properly prepared in accordance with UK-adopted International Accounting Standards; and
· have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the audit of the financial statements section of our report. We are independent of the group, in accordance with the ethical requirements that are relevant to our audit of the financial statements in Guernsey, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the group's business, its environment and risk profile. We conducted substantive audit procedures and evaluated the group's internal control environment. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement. The components of the group were evaluated by the group audit engagement team based on a measure of materiality, considering the group's composition and understanding the group and each component, which allowed the group audit engagement team to assess the significance of each component by identifying and assessing the risks of material misstatement and to determine the planned audit response. The components were classified either as full scope, limited scope or out-of-scope based on the risk-based approach required under ISA 600 Audits of Group Financial Statements (Including the Work of Component Auditors).
For those components that were evaluated as requiring a full scope audit, we evaluated controls by performing walkthroughs over the financial reporting systems identified as part of our risk assessment, reviewed the accounts production process and addressed critical accounting matters. We then undertook substantive testing on a number of classes of transactions, account balances or disclosures which represented risks of material misstatement at the assertion level for the group financial statements, including a number of significant audit risks. We determined there to be five full scope components to the group, which were Sancus Lending Group Limited, Sancus Holdings (UK) Limited, Sancus Lending (UK) Limited, Sancus Loans Limited and Sancus Lending (Ireland) Limited. Limited scope components were subject to targeted audit procedures based on the level of risk in the context of the group as a whole.
Significant elements of the group's operations are located in the United Kingdom. Component audit teams in the UK performed full scope audits of relevant UK components; the audits of Sancus Holdings (UK) Limited, Sancus Lending (UK) Limited and Sancus Loans Limited were completed by another office of Moore Kingston Smith LLP. A component audit team in Ireland from Moore Ireland Audit Partners Limited performed the full scope audit of Sancus Lending (Ireland) Limited,. These audits were completed under the supervision and direction of the group audit engagement team, as described in more detail below. The remaining full scope component, namely the parent company Sancus Lending Group Limited was audited by the group audit engagement team.
Our involvement with the component auditors
As part of our supervision and direction of the component audit teams, we determined the level of involvement required in order to be able to conclude whether sufficient appropriate audit evidence has been obtained in respect of the United Kingdom and Irish components as a basis for our opinion on the group financial statements as a whole. Our involvement with the component auditors included the following:
· We issued detailed group reporting instructions to the component auditors, which included the significant areas to be covered by the audit (including areas that were considered to be key audit matters as detailed below) and set out the information required to be reported to the group audit engagement team.
· The group audit engagement team performed reviews of relevant working papers and performed additional audit work where necessary for instance in respect of the significant risk areas that represented Key Audit Matters for the group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the group financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the group financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
|
Audit Matter |
Procedures |
|
Assessment of carrying value of investment in Joint ventures.
As at 31 December 2025 the carrying value of the investment in joint ventures was £14.740m (2024: £14.379m) representing 7.6% (2024: 11.78%) of the group's total assets.
We identified this balance as a significant risk area given its material nature and the subjectivity in determining it's carrying value. Consequently the valuation of investments in joint ventures was considered to be a key audit matter.
|
Our audit work included, but was not restricted to, the following procedures:
· We critically assessed management's accounting treatment of the joint ventures in the financial statements to determine whether it complied with the requirements of IFRS 11.
· We obtained management's assessment of whether there are any indicators of impairment of the investment in the joint venture.
· We critically assessed the arithmetic accuracy of the DCF Capital Asset Pricing Model prepared by management in forming the above assessment.
· We critically assessed the inputs into the DCF Capital Asset Pricing Model and obtained supporting evidence and documentation for the assumptions used in the DCF Capital Asset Pricing Model.
· We performed sensitivity analysis on the key assumptions used in the DCF Capital Asset Pricing Model.
· We evaluated the accounting policy and detailed disclosures in the notes to the financial statements to determine whether information provided in the financial statements is compliant with the requirements of relevant financial reporting standards including IFRS 11 and IAS 36.
Based on our audit work performed we have not identified any material misstatement in the valuation of joint venture investments.
We consider the disclosures in the financial statements relating to this area to be in accordance with the requirements of the relevant financial reporting standards. |
|
Audit Matter |
Procedures |
|
Impairment and recoverability of loans receivable
At 31 December 2025 the value of loans and loan equivalents in the financial statements was £157.708m (2024: £92.704m) representing 80.9% of total assets (2024:75.9%). The loan portfolio comprises property backed loans and direct exposure to loans through co-investment alongside third party lenders.
The group has also provided a first loss guarantee as part of the Sancus Loan Note structures. The value of these assets are also supported by the underlying loan book. Management is required to assess loans for impairment, including the application of the expected credit loss ('ECL') model under IFRS 9.
In making this assessment, management makes several significant judgements. These include determining appropriate assumptions for calculating the loss allowance under IFRS 9 (including probability of default and loss given default), as well as loan-specific matters including cash flow forecasts and covenant compliance, specifically related to loan to value (LTV) ratio. As a result, errors or deliberate manipulation of these determining factors could result in material misstatement of the financial statements. Consequently it was considered to be a key audit matter.
|
Our audit work included, but was not restricted to, the following procedures:
· We obtained an understanding of the significant controls over the loans impairment process.
· We performed a walkthrough of the impairment process including testing of the operation of the relevant controls.
· We critically assessed the reasonableness of management's allocation of loans to the various stages under IFRS 9 including an assessment of management's definition of significant increase in credit risk and definition of default.
· We critically assessed management's assumptions in respect of the recoverability of non-performing loans.
· We critically assessed management's judgements and estimates in determining the probability of default ('PD'), determining the loss given default ('LGD') and exposure at default ('EAD') for each stage within which loans are classified.
· We performed sample testing of inputs used in the Loans Monitoring Report ('LMS').
· We critically assessed the accounting policy and detailed disclosures in the financial statements to determine whether information provided in the financial statements is compliant with the requirements of IFRS 9.
Based on our audit work performed we have not identified any material misstatement in the impairment and recoverability of loans.
We consider the disclosures in the financial statements relating to this area to be in accordance with the requirements of IFRS 9. |
|
Revenue recognition
The group's revenue for the year ended 31 December 2025 was £22,104m (2024: £16.776m) being interest income and fees enforced as per the lending agreements.
Revenue recognition is a presumed significant risk and is material to the financial statements. Consequently it was considered to be a key audit matter. |
Our audit work included, but was not restricted to, the following procedures:
· We obtained and documented an understanding of the methodology for recognising revenue to determine whether it was appropriate.
· We critically assessed the group's revenue recognition accounting policy to assess compliance with IFRS 15.
· We performed substantive testing on a sample of individual revenue transactions throughout the year to evaluate whether revenue is recognised in accordance with the loan contract terms and the requirements of IFRS 15.
· We performed substantive testing of a sample of interest income selected from the Loans Monitoring Reports by recalculating the interest amount and comparing it to the interest income recognised.
|
|
Audit Matter |
Procedures |
|
|
· We performed revenue cut off testing to ensure revenue has been recognised in the correct accounting period.
· We performed analytical review to critically assess the level of interest income.
· We critically assessed the disclosures in the financial statements to determine whether the accounting policy and other revenue disclosures comply with the disclosure requirements of IFRS 15.
Based on our audit work performed we have not identified any material misstatement in the recognition of revenue.
We consider the disclosures in the financial statements relating to this area to be in accordance with the requirements of IFRS 15. |
Our application of materiality
The scope and focus of our audit were influenced by our assessment and application of materiality. We define materiality as the magnitude of misstatement that could reasonably be expected to influence the readers and the economic decisions of the users of the financial statements. We use materiality to determine the scope of our audit and the nature, timing, and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the financial statements as a whole. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
Based on our professional judgement we determined materiality for the financial statements as a whole and performance materiality as follows:
|
|
Group financial statements |
|
Materiality |
£1,948,000 |
|
Basis for determining materiality |
Gross assets |
|
Rationale for the benchmark applied |
The group is an asset-based operation. Assets (loans) drive the group's revenue. Consequently gross assets was considered likely to be the metric on which the users of the financial statements will place most focus. |
|
Performance materiality |
£974,000 |
|
Basis for determining performance materiality |
50% of overall materiality. |
|
Trivial threshold |
£97,400 |
|
Basis for determining trivial threshold |
5% of overall materiality |
Performance materiality:
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality level for the Group consolidated financial statements as a whole. We determined performance materiality to be £974,000, which was set at 50% of overall materiality and reflects the group's listed status.
Component materiality:
We set materiality for each component of the group based on a percentage of group materiality dependent on the size and our assessment of risk of material misstatements of that component. Component materiality, other than the parent company's, ranged from £528,000 to £1,703,000. In the audit of each component, we further applied performance materiality levels of 50% of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Trivial:
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £97,400 for the group based on 5% of overall group materiality. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds. We also reported to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
Conclusions relating to Going Concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the group's ability to continue to adopt the going concern basis of accounting included, but was not limited to:
· Critically assessing the going concern assessment prepared by management covering at least twelve months from the date of approval of the financial statements and challenging the client as regards the key assumptions and forecasts used in their assessment;
· Performing sensitivity analysis on the cash flow forecast to determine the level of headroom for the group to continue as a going concern for at least twelve months from the date of approval of the financial statements; and
· Reviewing the post year end trading performance of the group and comparing it to the forecasts prepared by management to assess their accuracy; and Assessing the adequacy of the going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the Group financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the group financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Group financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the group financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:
· we have not received all the information and explanations we require for our audit; or
· proper accounting records have not been kept by the parent company; or
· the financial statements are not in agreement with the accounting records.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 30, the directors are responsible for the preparation of the group financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of group financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the Group financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the Group financial statements
Our objectives are to obtain reasonable assurance about whether the group financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
A further description of our responsibilities is available on the FRC's website at https://wwww.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor's-responsibilities-for This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the group financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the Group.
Our approach was as follows:
· We obtained an understanding of the legal and regulatory requirements applicable to the group and considered that the most significant are the Companies (Guernsey) Law, 2008, UK-adopted International Accounting Standards, the rules of the Alternative Investment Market, and relevant taxation legislation.
· We obtained an understanding of how the group complies with these requirements by discussions with management and those charged with governance.
· We assessed the risk of material misstatement of the group financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
· We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
· Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the Group financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Banton
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6th Floor
9 Appold Street
London
EC1A 2AP
|
|
|
|
|
|
|
Notes |
2025 £'000 |
2024 £'000 |
|
|
|
|
|
|
Revenue |
5 |
22,104 |
16,776 |
|
|
|
|
|
|
Cost of sales |
6 |
(14,827) |
(11,172) |
|
|
|
|
|
|
Gross profit |
|
7,277 |
5,604 |
|
|
|
|
|
|
Operating expenses |
7 |
(7,076) |
(5,991) |
|
Group borrowing costs |
8 |
(2,086) |
(2,331) |
|
Changes in expected credit losses |
22 |
227 |
402 |
|
|
|
|
|
|
Operating loss |
|
(1,658) |
(2,316) |
|
|
|
|
|
|
Other net gains |
9 |
2,451 |
2,736 |
|
Share of net profit / (loss) of joint ventures accounted for using the equity method |
10 |
361 |
(290) |
|
|
|
|
|
|
Profit for the year before tax |
|
1,154 |
130 |
|
|
|
|
|
|
Income tax expense |
18 |
(204) |
(130) |
|
|
|
|
|
|
Profit for the year after tax |
|
950 |
- |
|
|
|
|
|
|
|
|||
|
Items that may be reclassified subsequently to profit and loss |
|||
|
Foreign exchange gain / (loss) arising on consolidation |
|
145 |
(85) |
|
Other comprehensive income / (loss) for the year after tax |
|
145 |
(85) |
|
|
|
|
|
|
Total comprehensive income / (loss) for the year |
|
1,095 |
(85) |
|
|
|
|
|
|
Basic earnings per share |
11 |
0.16p |
0.00p |
|
Diluted earnings per share |
11 |
0.16p |
0.00p |
|
ASSETS |
Notes |
2025 £'000 |
2024 £'000 |
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
12 |
821 |
473 |
|
Other intangible assets |
13 |
- |
- |
|
Sancus loans and loan equivalents |
22 |
37,848 |
7,373 |
|
FinTech Ventures investment |
22 |
- |
- |
|
Other investments |
14 |
350 |
100 |
|
Investments in equity-accounted joint ventures and associates |
10 |
14,740 |
14,379 |
|
Total non-current assets |
|
53,759 |
22,325 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Sancus loans and loan equivalents |
22 |
119,860 |
85,331 |
|
Trade and other receivables |
15 |
18,221 |
11,937 |
|
Cash and cash equivalents |
|
3,164 |
2,529 |
|
Total current assets |
|
141,245 |
99,797 |
|
|
|
|
|
|
Total assets |
|
195,004 |
122,122 |
|
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
16 |
- |
- |
|
Share premium |
16 |
120,380 |
118,340 |
|
Treasury shares |
16 |
(1,172) |
(1,172) |
|
Other reserves |
|
(118,134) |
(119,229) |
|
Capital and reserves attributable to equity holders of the Group |
|
1,074 |
(2,061) |
|
|
|
|
|
|
Total equity |
|
1,074 |
(2,061) |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current liabilities |
|
|
|
|
Borrowings |
|
186,346 |
121,158 |
|
Lease liabilities |
|
605 |
423 |
|
Total non-current liabilities |
17 |
186,951 |
121,581 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
4,561 |
1,296 |
|
Hedging contracts |
|
- |
2 |
|
Tax liabilities |
|
88 |
10 |
|
Provisions |
|
- |
11 |
|
Lease liabilities |
|
137 |
20 |
|
Interest payable |
|
2,193 |
1,263 |
|
Total current liabilities |
17 |
6,979 |
2,602 |
|
|
|
|
|
|
Total liabilities |
|
193,930 |
124,183 |
|
|
|
|
|
|
Total equity and liabilities |
|
195,004 |
122,122 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
Note |
Share Premium |
Treasury Shares |
Warrants Outstanding |
Foreign Exchange Reserve |
Retained Earnings/ (Losses) |
Capital and reserves attributable to equity holders of the Company |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2025 |
|
118,340 |
(1,172) |
- |
(70) |
(119,159) |
(2,061) |
|
Issue of shares |
|
2,040 |
- |
- |
- |
- |
2,040 |
|
Total comprehensive income for the year |
|
- |
- |
- |
145 |
950 |
1,095 |
|
Balance at 31 December 2025 |
|
120,380 |
(1,172) |
- |
75 |
(118,209) |
1,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2024 |
|
118,340 |
(1,172) |
- |
15 |
(119,159) |
(1,976) |
|
Total comprehensive loss for the year |
|
- |
- |
- |
(85) |
- |
(85) |
|
Balance at 31 December 2024 |
|
118,340 |
(1,172) |
- |
(70) |
(119,159) |
(2,061) |
|
|
Notes |
2025 £'000 |
2024 £'000 |
|
|
|
|
|
|
Cash flow from operations, excluding loan movements |
19 |
(2,455) |
(3,967) |
|
|
|
|
|
|
(Increase) / decrease in Sancus loans |
|
(94) |
74 |
|
Increase in Sancus Loans Limited loans |
|
(64,910) |
(14,013) |
|
Investment in Sancus Loan Notes |
|
(250) |
(50) |
|
Net cash flows used in operating activities |
|
(67,709) |
(17,956) |
|
|
|
|
|
|
Investing activities |
|
|
|
|
Investment in joint venture |
|
(250) |
(564) |
|
Property, plant and equipment and other intangibles acquired |
|
(97) |
(20) |
|
Net cash outflow from investing activities |
|
(347) |
(584) |
|
|
|
|
|
|
Financing activities |
|
|
|
|
Drawdown of Pollen facility |
19 |
61,505 |
12,250 |
|
Drawdown of Paragon facility |
19 |
500 |
- |
|
Drawdown of Irish loan note |
19 |
- |
827 |
|
Capital element of lease payments |
19 |
(113) |
(296) |
|
Issue of preference shares |
19 |
4,650 |
5,000 |
|
Issue of bonds |
19 |
3,988 |
2,003 |
|
Debt issue costs |
19 |
(595) |
(117) |
|
Purchase of ZDPs |
19 |
(1,389) |
(3,503) |
|
Net cash generated by financing activities |
|
68,546 |
16,164 |
|
|
|
|
|
|
Effects of foreign exchange |
|
145 |
(85) |
|
|
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
|
635 |
(2,461) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
|
2,529 |
4,990 |
|
|
|
|
|
|
Cash and cash equivalents at end of year |
|
3,164 |
2,529 |
1. GENERAL INFORMATION
Sancus Lending Group Limited (the "Company"), together with its subsidiaries, (the "Group") was incorporated, and domiciled in Guernsey, Channel Islands, as a company limited by shares and with limited liability, on 9 June 2005 in accordance with The Companies (Guernsey) Law, 1994 (since superseded by The Companies (Guernsey) Law, 2008). Until 25 March 2015, the Company was an Authorised Closed-ended Investment Scheme and was subject to the Authorised Closed-ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission ("GFSC"). On 25 March 2015, the Company was registered with the GFSC as a Non-Regulated Financial Services Business ("NRFSB"), at which point the Company's authorised fund status was revoked. The Company's Ordinary Shares were admitted to trading on the AIM market of the London Stock Exchange on 5 August 2005 and its issued zero dividend preference shares were listed and traded on the Standard listing Segment of the main market of the London Stock Exchange with effect from 5 October 2015. The Company completed the cancellation of its zero dividend preference shares listing on the London Stock Exchange main market on 11 December 2024. The Company changed where its business is managed and controlled, from Guernsey to Jersey, effective 1 April 2023. The Board agreed that the Company should revoke its NRFSB status, which was completed on 23 June 2023.
The Company does not have a fixed life and the Articles do not contain any trigger events for a voluntary liquidation of the Company. The Company is an operating company for the purpose of the AIM rules. The Executive Management Team is responsible for the management of the Company.
As at 31 December 2025, the Group comprises the Company and its subsidiaries (Note 20).
The Company has taken advantage of the exemption conferred by the Companies (Guernsey) Law, 2008, Section 244, not to prepare company only financial statements.
2. ACCOUNTING POLICIES
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards, and all applicable requirements of Guernsey Company Law. The financial statements have been prepared under the historical cost convention, as modified for the measurement of investments at fair value through profit or loss. Monetary amounts are expressed in pound sterling and are rounded to the nearest thousand. With the exception of any new and amended accounting standards which require policy changes, detailed in Note 2 (v), the principal accounting policies of the Group have remained unchanged from the previous year and are set out below. Comparative information in the primary statements is given for the year ended 31 December 2024.
The Group does not operate in an industry where significant or cyclical variations, as a result of seasonal activity, are experienced during any particular financial period.
Going Concern
The Group has reported an operating loss of £1.7m (2024: £2.3m) for the year and an overall profit of £1.0m (2024: £nil). As at 31 December 2025 the Group had net assets of £1.1m (2024: net liabilities of £2.1m), including cash and cash equivalents of £3.2m (2024: £2.5m).
The Directors have considered the going concern basis in the preparation of the financial statements as supported by the Directors' assessment of the Company's and Group's ability to pay its liabilities as they fall due and have assessed the current position and the principal risks facing the business with a view to assessing the prospects of the Company. The Directors have prepared a cash flow forecast for the period to 30 June 2027 which shows that the Company and the Group will have sufficient cash resources to meet their ongoing liabilities as they fall due for at least twelve months from the date of approval of these financial statements. Following an extension to the maturity date of preference shares in issue by one of the Company's loan financing subsidiaries, the Company does not have any debt liabilities that fall due or expire within the next 12 months. Based on this the Group has adequate financial resources to continue in operation and meet its liabilities as they fall due for the foreseeable future.
It is expected that equity or junior capital may be required to facilitate an increase in drawdowns from the institutional funding lines that the Company has. The Company's largest shareholder, Somerston has entered into a junior capital commitment which supports the Company's growth plans. The Company will be looking at other options available to raise such additional growth capital over the course of the year if or as required.
The Directors therefore believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
(b) Basis of consolidation
The financial statements comprise the results of Sancus Lending Group and its subsidiaries for the year ended 31 December 2025. The subsidiaries are all entities where the Company has the power to control the investee, is exposed, or has rights to variable returns and has the ability to use its power to affect these returns. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year is recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated in full on consolidation.
(c) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held on call with banks and other short term (three months or less maturity) highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
(d) Dividends
Dividend distributions are made at the discretion of the Company. A dividend distribution to shareholders is accounted for as a reduction in retained earnings. A proposed dividend is recognised as a liability in the period in which it has been approved and declared by the Directors.
(e) Expenditure
All expenses are accounted for on an accruals basis. Management fees, administration fees, finance costs and all other expenses (excluding share issue expenses which are offset against share premium) are charged through the Consolidated Statement of Comprehensive Income.
(f) Financial assets and liabilities
Classification, recognition and initial measurement
Classification and measurement of debt assets is driven by the business model for managing the financial assets and the contractual cash flow characteristics of those financial assets. There are three principal classification categories for financial assets that are debt instruments: (i) amortised cost, (ii) fair value through other comprehensive income and (iii) fair value through profit or loss. Equity investments in the scope of IFRS 9 are measured at fair value with gains and losses recognised in profit or loss unless an irrevocable election is made to recognise gains or losses in other comprehensive income.
We are a lending business, which participates in financing to borrowers, Sancus loans, loan equivalents and loans through platforms. As a result all of these loans/loan equivalents are held solely for the collection of contractual cash flows, being interest, fees and payment of principal. These assets are held at amortised cost using the effective interest rate method, adjusted for any credit loss allowance.
FinTech Ventures investments relate to equity, preference shares and some working capital loans. Whilst some of these investments attract interest, the assets are held primarily to assist the development of the entities involved. These investments are held at fair value with charges recognised in profit or loss.
Trade payables, financial liabilities and trade receivables are held solely for the collection and payment of contractual cash flows, being payments of principal and interest where applicable. Trade receivables are held at amortised cost using the effective interest rate method, adjusted for any credit loss allowance. Trade payables and financial liabilities are held at amortised cost with any interest cost calculated in accordance with the effective interest rate.
Financial assets and financial liabilities are initially recognised on the trade date, which is the date on which the Group becomes party to the contractual provisions of the instrument.
Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised in the Consolidated Statement of Comprehensive Income. Financial assets and financial liabilities not at fair value through profit or loss are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue.
Subsequent to initial recognition, financial assets are either measured at fair value or amortised cost as noted above. Realised gains and losses arising on the derecognition of financial assets and liabilities are recognised in the period in which they arise. The effect of discounting on trade and other receivables is not considered to be material.
Fair value measurement
"Fair value" is the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.
When available, the Group measures the fair value of an instrument using quoted price in an active market for that instrument. A market is regarded as "active" if transactions of the asset or liability take place with sufficient frequency and volume to provide pricing information on an on-going basis. The Group measures financial instruments quoted in an active market at a mid price.
If there is no quoted price in an active market, the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. Please refer to Note 22.
The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred. If in the case of any investment the Directors at any time consider that the above basis of valuation is inappropriate or that the value determined in accordance with the foregoing principles is unfair, they are entitled to substitute what in their opinion, is a fair value. Gains and losses arising from changes in the fair value of the financial assets and liabilities at fair value through profit or loss are included in the Consolidated Statement of Comprehensive Income in the period in which they arise.
Debt and Equity Instruments
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments are recorded at the proceeds received less any direct costs of issue.
Derecognition
Sales of all financial assets are recognised on trade date - the date on which the Group disposes of the economic benefits of the asset. Financial assets are derecognised when the rights to receive cash flows from the asset have expired or the Group has transferred substantially all risks and rewards of ownership.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in the Consolidated Statement of Comprehensive Income. Any interest in such transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Derivative financial instruments
The Group enters into foreign exchange forward contracts in order to manage its exposure to foreign exchange rate movements. Further details can be found in Note 22.
Forward contracts are initially recognised at fair value at the date the contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. Resulting gains/losses are recognised in profit or loss immediately. Forward contracts with positive fair value are recognised as financial assets whereas forward contracts with negative fair value are recognised as financial liabilities. Contracts are presented as non-current assets or liabilities if the remaining maturity of the instrument is more than 12 months and is not expected to be settled within 12 months. Other contracts are presented as current assets.
Expected credit losses
Credit risk is assessed at initial recognition of each financial asset and subsequently re-assessed at each reporting period-end. For each category of Credit risk loans have been categorized into Stage 1, Stage 2 and Stage 3 with Stage 1 being to recognise 12 month Expected Credit Losses (ECL), Stage 2 being to recognise Lifetime ECL not credit impaired and Stage 3 being to recognise Lifetime ECL credit impaired. When for example LTV exceeds 65% or amounts become 30 days past due judgement will be used to reassess whether Credit risk has increased significantly enough to move the loan from one stage to another. A loan is considered to be in default when there is a failure to meet the legal obligation of the loan agreement. This would include provisions against loans that are considered by management as unlikely to pay their obligations in full without realisation of collateral. Refer to Note 22 for further details.
Sancus loans and loan equivalents are assessed for credit risk based on information available at initial recognition, predominantly (but not solely) using Loan to Value (LTV). For trade and other receivables, the Group has applied the simplified approach to recognise lifetime expected credit losses although loan interest receivable is included in the gross carrying value when determining ECL.
Provision for ECL is calculated using the credit risk, the probability of default and the probability of loss given default, all underpinned by the LTV, historical position, forward looking considerations and on occasion subsequent events, and the subjective judgement of the Board. ECL assumes the life of the loan is consistent with contractual term.
Financial guarantee contracts
Financial guarantee contracts are only recognised as a financial liability when it becomes probable that the guarantee will be called upon in the future. The liability is measured at fair value and subsequently in accordance with the expected credit loss model under IFRS 9. The fair value of financial guarantees is determined based on the present value of the difference in cash flows between contracted payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
(g) Foreign currency translation
Functional and presentation currency
The financial statements of the Group are presented in the currency of the primary economic environment in which the Company operates (its functional currency). The Directors have considered the primary economic environment of the Company and considered the currency in which finance is raised, distributions made, and ultimately what currency would be returned if the Company was wound up. The Directors have also considered the currency to which the underlying investments are exposed. On balance, the Directors believe Sterling best represents the functional currency of the Company. Therefore, the books and records are maintained in Sterling and for the purpose of the financial statements, the results and financial position of the Group are presented in Sterling, which is also the presentation currency of the Group.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined.
All subsidiaries are presented in Sterling, which is the primary currency in which they operate with the exception of Sancus Lending (Ireland) Limited whose primary currency is the Euro. Translation differences on non-monetary items are reported as part of the fair value gain or loss reported in the Consolidated Statement of Comprehensive Income.
Foreign exchange differences arising on consolidation of the Group's foreign operations are taken direct to reserves. The rates of exchange as at the year-end are £1: USD1.34721 (2024 USD1.25152) and £1: EUR1.14678 (2024 EUR1.20887).
(h) Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. Goodwill is measured as the excess of (a) the aggregate of: (i) the consideration transferred measured in accordance with IFRS 3, which generally requires acquisition-date fair value; (ii) the amount of any non-controlling interest in the acquiree measured in accordance with IFRS 3; and (iii) in a business combination achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree; over (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed measured in accordance with IFRS 3. Goodwill is carried at cost less accumulated impairment losses. Refer to Note 2 (k) for a description of impairment testing procedures.
(i) Interest costs
Interest costs are recognised when economic benefits are due to debt holders. Interest costs are accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the liability's net carrying amount on initial recognition.
(j) Other intangible assets
Intangible assets with finite useful lives are amortised to profit or loss on a straight-line basis over their estimated useful lives. Useful lives and amortisation methods are reviewed at the end of each annual reporting period, or more frequently when there is an indication that the intangible asset may be impaired, with the effect of any changes accounted for on a prospective basis. Amortisation commences when the intangible asset is available for use. The residual value of intangible assets is assumed to be zero.
Computer software
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:
§ It is technically feasible to complete the software product so that it will be available for use.
§ Management intends to complete the software product and use or sell it.
§ There is an ability to use or sell the software product.
§ It can be demonstrated how the software product will generate probable future economic benefits.
§ Adequate technical, financial and other resources to complete the development and to use or sell the software product are available.
§ The expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and third party contractor costs. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use over their estimated useful lives, which does not exceed four years.
(k) Impairment testing of goodwill, intangible assets and property and equipment
An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect management's assessment of respective risk profiles, such as market and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount.
All impairments or subsequent reversals of impairments are recognised in the Consolidated Statement of Comprehensive Income.
(l) Investment in Joint Venture and associates
A joint venture is a joint arrangement over which the Group has joint control. An associate is an entity over which the Group has significant influence but is not a subsidiary or a joint venture.
An investment in a joint venture or associate is accounted for by the Group using the equity method except for certain FinTech Ventures associates as described in Note 3. These are measured at fair value through profit or loss in accordance with policy Note 2 (f).
Any goodwill or fair value adjustment attributable to the Group's share in the joint venture or associate is not recognised separately and is included in the amount recognised as an investment.
The carrying amount of the investment in a joint venture or associate is increased or decreased to recognise the Group's share of the profit or loss and other comprehensive income of the joint venture or associate and adjusted where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its joint venture or associate are eliminated to the extent of the Group's interest in the entity. Where unrealised losses are eliminated, the underlying asset is also tested for impairment.
(m) Non-Current Liabilities
Loans payable are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial recognition, loans payable are stated at amortised cost using the effective interest rate method.
The ZDPs are contractually required to be redeemed on their maturity date and they will be settled in cash, thus, ZDP shares are classified as liabilities (refer to Note 17) in accordance with IAS 32 Financial Instruments: Presentation. After initial recognition, these liabilities are measured at amortised cost, which represents the initial proceeds of the issuance plus the accrued entitlement to the reporting date. Any ZDPs acquired by the group, as noted in Note 17, are held in Treasury and shown as a reduction in carrying value.
(n) Property, plant and equipment
Property, plant and equipment include computer equipment, furniture and fittings stated at cost less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost of property and computer equipment on a straight-line basis over its expected useful economic life as follows:
Furniture and fittings 3 to 5 years
Computer equipment 2 to 4 years
(o) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales-related taxes where applicable in the Group. Revenue is reduced for estimated rebates and other similar allowances. The Group has five principal sources of revenue and related accounting policies are outlined below:
Interest on loans
Interest income is recognised in accordance with IFRS 9. Interest income is accrued over the contractual life of the loan, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
Dividend income
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably).
Fee income on syndicated and non-syndicated loans
In accordance with the guidance in IFRS 15 Revenue, the Group distinguishes between fees that are an integral part of the effective interest rate of a financial instrument, fees that are earned as services are provided, and fees that are earned on the execution of a significant act.
i) Commitment and arrangement fees
Commitment and arrangement fees earned for syndicated loans are recognised on origination of the loan as compensation for the service of syndication. This is a reflection of the commercial reality of the operations of the business to arrange and administer loans for other parties i.e. the execution of a significant act and satisfying the Group's performance obligation at the point of arranging the loan.
Consistent with the policy outlined above, commitment and arrangement fees earned on loans originated for the sole benefit of the Group are also recorded in revenue on completion of the service of analysing or originating the loan. Whilst this is not in accordance with the requirements of the effective interest rate method outlined in IFRS 9 Financial Instruments, this is not considered to have a material impact on the financial performance or financial position of the Group.
ii) Exit fees
Where a loan is syndicated and has standard terms the exit fee is recognised as part of the arrangement fee, reflecting the costs of syndication at the start of the loan. Where a loan is syndicated and has milestones or conditions which determine if the fee becomes payable and/or the magnitude of the fee the exit fee is treated as variable consideration in line with IFRS 15 and is only recognised when the relevant milestones/conditions are met. Where loans are not syndicated the exit fee is deemed to be part of the effective interest rate and recognised over the term of the loan.
iii) Fee income earned by peer-to-peer subsidiary platforms
Fee income earned by subsidiaries whose principal business is to operate online lending platforms that arrange financing between Co-Funders and Borrowers includes arrangement fees, trading transaction fees, repayment fees and other lender related fees. Revenue earned from the arrangement of financing is classified as a transaction fee and is recognised immediately upon acceptance of the arrangement by borrowers. Other transaction fees, including revenue from Co-Funders in relation to the sale of their loan participations in platform secondary markets is also recognised immediately.
Loan repayment fees are charged on a straight-line basis over the repayments of the borrower's financing arrangement.
iv) Advisory fees
Advisory fee income is invoiced and recognised on an accruals basis in accordance with the relevant investment advisory agreement.
(p) Share based payments
As explained in the Remuneration Report, the Company provides a discretionary bonus, part of which may be satisfied through the issuance of the Company's own shares, to certain senior management. The cost of such bonuses is taken to the Consolidated Statement of Comprehensive Income with a corresponding credit to Shareholders' Equity. The fair value of any share options granted is determined at the grant date and the expense is spread over the vesting period in accordance with IFRS 2.
(q) Taxation
Current tax, including corporation tax in relevant jurisdictions that the Group operates in, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Group's taxable profits, and its results as stated in the financial statements, that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
(r) Treasury shares
Where the Company purchases its own Share Capital, the consideration paid, which includes any directly attributable costs, is recognised as a deduction from Share Premium.
When such shares are subsequently sold or reissued to the market, any consideration received, net of any directly attributable incremental transaction costs, is recognised as an increase in Share Premium. Where the Company cancels treasury shares, no further action is required to the Share Premium account at the time of cancellation.
(s) Warrants
Warrants are accounted for as either equity or liabilities based upon the characteristics and provisions of each instrument and are recorded at fair value as of the date of issuance. In subsequent periods an amount representing the difference between the warrant exercise price and the prevailing market price of the company's shares is transferred from/to retained earnings to/from warrants outstanding.
(t) Inventories - Development properties
Inventories are stated at the lower of cost and net realisable value. Cost comprises initial outlay and, where applicable, additional costs that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing and selling. Repossessed assets are accounted for under IAS 2: Inventories because the Group will either immediately seek to dispose of those assets which are readily marketable or pursue the original development plans to sell for those that are not readily marketable. Such assets are classed as "Other Assets" within current assets on the Statement of Financial Position.
(u) Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or rate (initially measured using the index or rate at the commencement date), the amount expected to be payable by the lessee under residual value guarantees, the exercise price of purchase options (if the lessee is reasonably certain to exercise the options) and payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented within current and non-current liabilities in the consolidated statement of financial position. It is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures this liability (and makes a corresponding adjustment to the related right-of-use asset) whenever the lease term has changed or there is a change in the lease payments used on inception to measure the liability as described above.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'Property, Plant and Equipment' policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in 'Operating expenses' in profit or loss.
(v) Adoption of new and revised Standards
New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2025:
Amendments to IAS 21 -- Lack of Exchangeability
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
New standards and interpretations not yet adopted
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2026:
Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7
The following standards are effective for the period beginning 1 January 2027:
IFRS 19 Subsidiaries without Public Accountability: Disclosures; and
IFRS 18 Presentation and Disclosure in Financial Statements.
The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not expect any other standards issued by the IASB, but are yet to be effective, to have a material impact on the Group.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
In the application of the Group's accounting policies, which are described in Note 2, the directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. There is no change in applying accounting policies for critical accounting estimates and judgments from the prior year. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the group's accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Fair value accounting for FinTech Ventures investments
Some of the Group's FinTech Ventures investments meet the definition of an associate. However, the Group has applied the exemption available under IAS 28.18 which states that when an investment in an associate is held by, or is held indirectly through, an entity that is a venture capital organisation, the entity may elect to measure investments in those associates at fair value through profit or loss in accordance with IFRS 9 - Financial Instruments.
The Directors consider that the Group is of a nature similar to a venture capital organisation on the basis that FinTech Ventures investments form part of a portfolio which is monitored and managed without distinguishing between investments that qualify as associate undertakings and those that do not. Furthermore, the most appropriate point in time for exit from such investments is being actively monitored as part of the Group's investment strategy.
The Group therefore designates those investments in associates which qualify for this exemption as fair value through profit or loss. Refer to Note 22 for fair value techniques used. If the Group had not applied this exemption the investments would be accounted for using the equity method of accounting. This would have the impact of taking a share of each investment's profit or loss for the year and would also affect the carrying value of the investments.
The Directors consider that equity and loan stock share the same investment characteristics and risks and they are therefore treated as a single unit of account for valuation purposes and a single class for disclosure purposes.
Exit fees
The Directors consider that the economic measurement of fee revenues that arise and become due on the completion of a loan (exit fees and warrants) should be accounted for as variable consideration and the exit fee constrained to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Variable consideration is included based on the expected value or most likely amount, with the estimated transaction price associated with syndication services (being the performance obligation to which these fees are attributable) due on collection of the loan, updated at the end of each reporting period to represent the circumstances present and any changes in circumstances during the reporting period. This includes factors such as timing risk, liquidity risk, quantum uncertainty and conditions precedent in the syndicated finance contract. The Directors consider that this treatment best reflects the commercial operations of the Group as an administrator of loan arrangements.
IFRS 10 Control Judgements
Judgement is sometimes required to determine whether after considering all relevant factors, the Group has control, joint control or significant influence over an entity or arrangement. Other companies may make different judgements regarding the same entity or arrangement. The Directors have assessed whether or not the Group has control over the Loan Note entities based on whether the Group has the practical ability to direct the relevant activities unilaterally. In making their judgement, the directors considered the rights associated with its investment in preference shares. After assessment, the directors concluded that the Group does not have the ability to affect returns through voting rights (the preference shares do not have voting rights) or other arrangements such as direct management of these entities (the Group does not have control over the investment manager). If the Directors had concluded that the ownership of preference shares was sufficient to give the Group control, these entities would instead have been consolidated with the results of the Group.
IFRS 9 Credit Risk
Credit risk and determining when a significant increase in credit risk has occurred are critical accounting judgements and are assessed at each reporting period end. Credit risk is used to calculate expected credit losses (ECL). Further details on credit risk can be found in Note 22.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Impairment of joint venture investments
As detailed in Note 10, the Directors have assessed the carrying value of joint venture investments entered into by the Group. This assessment includes discounted cash flow value-in-use analysis. Given the nature of the Group's operations, the calculation of value in use is sensitive to the estimation of future cash flows and the discount rates applied.
IFRS 9 ECL
Key areas of estimation and uncertainty are the probabilities of default (PD) and the probabilities of loss given default (PL) which are used along with the credit risk in the calculation of ECL. Further details on ECLs, PD and PL can be found in Note 22. Should the estimates of PD or PL prove to be different from what actually happens in the future, then the recoverability of loans could be higher or lower than the accounts currently suggest, although this should be mitigated by the levels of LTV which are, in the main, less than 70%. Where loans are in default and classified within stage 3, the Directors estimate of the present value of amounts recoverable through enforcement or other repayment plans could be materially different to the actual proceeds received to settle the balances due. In respect of certain loans held by the Group, the range of outcomes is significant and has a material impact on the calculation of ECL.
Fair Value of the FinTech Ventures investments
The Group invests in financial instruments which are not quoted in active markets and measures their fair values as detailed in Note 22.
All of the FinTech Ventures investments are categorised as Level 3 in the fair value hierarchy. In the past the Directors have estimated the fair value of financial instruments using discounted cash flow methodology, comparable market transactions, recent capital raises and other transactional data including the performance of the respective businesses. Having considered the terms, rights and characteristics of the equity and loan stock held by the Group in the FinTech Ventures investments, the Board's estimate of liquidation value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in the performance of these businesses and access to future returns via its current holdings could affect the amounts ultimately realised on the disposal of these investments, which may be greater or less than £nil. There have been no transfers between levels in the period (2024: None).
4. SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the manner in which the Executive Management Team reports to the Board, which is regarded to be the Chief Operating Decision Maker (CODM) as defined under IFRS 8. The main focus of the Group is Sancus. Bearing this in mind the Executive Management Team have identified four segments based on operations and geography.
Finance costs and Head Office costs are not allocated to segments as such costs are driven by central teams who provide, amongst other services, finance, treasury, secretarial and other administrative functions based on need. The Group's borrowings are not allocated to segments as these are managed by the Central team. Segment assets and liabilities are measured in the same way as in these financial statements and are allocated to segments based on the operations of the segment and the physical location of those assets and liabilities.
The four segments based on geography, whose operations are identical (within reason), are listed below. Note that Sancus Loans Limited, although based in the UK, is reported separately as a stand-alone entity to the Board and as such is considered to be a segment in its own right.
1. Offshore
Contains the operations of Sancus Lending (Jersey) Limited, Sancus Lending (Guernsey) Limited, Sancus Properties Limited, Sancus Group Holdings Limited and Hawkbridge Limited (the JV).
2. United Kingdom (UK)
Contains the operations of Sancus Lending (UK) Limited and Sancus Holdings (UK) Limited.
3. Ireland
Contains the operations of Sancus Lending (Ireland) Limited.
4. Sancus Loans Limited
Contains the operations of Sancus Loans Limited, Sancus Loans No.3 Limited and Sancus Loans No.4 Limited.
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Year to 31 December 2025
|
Offshore |
UK |
Ireland |
Sancus Loans Limited (SLL) |
Sancus Debt Costs |
Total Sancus |
|
Head Office |
SLL Debt Costs |
Other |
|
Consolidated Financial Statements |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
£'000 |
£'000 |
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
371 |
5,538 |
3,000 |
(784) |
- |
8,125 |
|
- |
13,979 |
- |
|
22,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) / profit * |
(556) |
439 |
1,730 |
(840) |
- |
773 |
|
(567) |
- |
(5) |
|
201 |
|
Credit Losses |
155 |
- |
- |
72 |
- |
227 |
|
- |
- |
- |
|
227 |
|
Debt Costs |
- |
- |
- |
- |
(2,086) |
(2,086) |
|
- |
- |
- |
|
(2,086) |
|
Other (losses) / gains |
(269) |
(11) |
(107) |
519 |
- |
132 |
|
2,569 |
- |
- |
|
2,701 |
|
Profit / (loss) on JVs and associates |
361 |
- |
- |
- |
- |
361 |
|
- |
- |
(250) |
|
111 |
|
Taxation |
- |
- |
(204) |
- |
- |
(204) |
|
- |
- |
- |
|
(204) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) / profit After Tax |
(309) |
428 |
1,419 |
(249) |
(2,086) |
(797) |
|
2,002 |
- |
(255) |
|
950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to 31 December 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
763 |
3,696 |
1,921 |
(295) |
- |
6,085 |
|
- |
10,691 |
- |
|
16,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) / profit * |
(195) |
(19) |
989 |
(333) |
- |
442 |
|
(823) |
- |
(6) |
|
(387) |
|
Credit Losses |
331 |
24 |
- |
47 |
- |
402 |
|
- |
- |
- |
|
402 |
|
Debt Costs |
- |
- |
- |
- |
(2,331) |
(2,331) |
|
- |
- |
- |
|
(2,331) |
|
Other Gains / (losses) |
(123) |
(19) |
45 |
139 |
- |
42 |
|
2,844 |
- |
- |
|
2,886 |
|
Loss on JVs and associates |
(290) |
- |
- |
- |
- |
(290) |
|
- |
- |
(150) |
|
(440) |
|
Taxation |
- |
- |
(130) |
- |
- |
(130) |
|
- |
- |
- |
|
(130) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) / profit After Tax |
(277) |
(14) |
904 |
(147) |
(2,331) |
(1,865) |
|
2,021 |
- |
(156) |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Operating (loss) / profit before credit losses and debt costs
Sancus Loans Limited is consolidated into the Group's results as it is 100% owned by Sancus Group. However, the reality is that Sancus Loans Limited is a Co-Funder the same as any other Co-Funder. As a result the Board reviews the economic performance of Sancus Loans Limited in the same way as any other Co-Funder, with revenue being stated net of debt costs. Operating expenses include recharges from Offshore to Ireland £74,000 (2024: £74,000) and Head Office to Offshore £125,000 (2024: £125,000). "Other" includes FinTech (excluding fair value and forex).
|
|
|
|
|
|
|
Reconciliation to Financial Statements |
||||||
|
|
|
|
|
|
|
|||||||
|
At 31 December 2025
|
Offshore |
UK |
Ireland |
Sancus Loans Limited (SLL) |
Total Sancus |
|
Head Office |
Fintech Portfolio |
Other |
Inter Segment Balances |
|
Consolidated Financial Statements |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
43,746 |
9,821 |
4,615 |
177,394 |
235,576 |
|
42,207 |
- |
- |
(82,779) |
|
195,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
(54,331) |
(18,798) |
(835) |
(177,696) |
(251,660) |
|
(25,049) |
- |
- |
82,779 |
|
(193,930) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Liabilities) / Assets |
(10,585) |
(8,977) |
3,780 |
(302) |
(16,084) |
|
17,158 |
- |
- |
- |
|
1,074 |
|
At 31 December 2024
|
Offshore |
UK |
Ireland |
Sancus Loans Limited (SLL) |
Total Sancus |
|
Head Office |
Fintech Portfolio |
Other |
Inter Segment Balances |
|
Consolidated Financial Statements |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
43,602 |
6,949 |
2,843 |
110,572 |
163,966 |
|
41,512 |
- |
3 |
(83,359) |
|
122,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
(53,870) |
(16,418) |
(628) |
(110,570) |
(181,486) |
|
(26,053) |
- |
(3) |
83,359 |
|
(124,183) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Liabilities) / Assets |
(10,268) |
(9,469) |
2,215 |
2 |
(17,520) |
|
15,459 |
- |
- |
- |
|
(2,061) |
Head Office liabilities include borrowings £24.4m (2024: £25.7m). Other FinTech assets and liabilities are included within "Other."
5. REVENUE
|
|
2025 £'000 |
2024 £'000 |
|
|
|
|
|
Co-Funder fees |
3,600 |
2,556 |
|
Earn out (exit) fees |
1,001 |
1,166 |
|
Transaction fees |
2,971 |
1,937 |
|
Total revenue from contracts with customers |
7,572 |
5,659 |
|
|
|
|
|
Interest on loans |
59 |
39 |
|
Pollen Interest income |
13,195 |
10,398 |
|
Sundry income |
1,278 |
680 |
|
Total revenue |
22,104 |
16,776 |
The disaggregation of revenue reflects the different performance obligations in contracts with customers as described in the accounting policy Note 2(o) and the typical timing of payment for those relevant revenue streams.
6. COST OF SALES
|
|
|
|
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Interest and preference share interest costs |
13,977 |
10,687 |
|
Other cost of sales |
850 |
485 |
|
Total cost of sales |
14,827 |
11,172 |
7. OPERATING EXPENSES
|
|
2025 £'000 |
2024 £'000
|
|
Amortisation and depreciation |
161 |
298 |
|
Audit fees |
259 |
256 |
|
Company secretarial, Investor relations and registrar fees |
108 |
191 |
|
Corporate insurance |
61 |
68 |
|
Employment costs |
5,003 |
3,913 |
|
Legal and professional |
181 |
344 |
|
Marketing expenses |
78 |
2 |
|
NOMAD fees |
111 |
118 |
|
Other office and administration costs |
957 |
703 |
|
Pension costs |
157 |
98 |
|
|
7,076 |
5,991 |
8. GROUP BORROWING COSTS
Group borrowing costs reflect the interest cost of the corporate bond and ZDPs (see note 17).
|
|
|
2025 £'000
|
2024 £'000
|
|
Group borrowing costs |
|
2,086 |
2,331 |
9. OTHER NET GAINS / (LOSSES)
|
|
2025 £'000 |
2024 £'000
|
|
Gains on foreign exchange |
411 |
183 |
|
Loss on joint ventures and associates |
(250) |
(150) |
|
Joint venture recharges |
(220) |
(119) |
|
Lease interest |
(59) |
(22) |
|
Gain on ZDPs |
2,569 |
2,844 |
|
|
2,451 |
2,736 |
1,157,417 ZDP shares were acquired under a tender offer in June 2025 at a price of 120p per ZDP share. This was financed by the issuance of £1,389,000 Sancus Bonds to Somerston Fintech Limited. The ZDP shares acquired under this tender offer were cancelled.
1,700,000 ZDP shares were acquired under a tender offer in December 2025 at a price of 120p per ZDP share in exchange for the issue of 501,721,593 new ordinary shares to Somerston Fintech Limited. The ZDP shares acquired under this tender offer were cancelled.
10. INVESTMENTS IN JOINT VENTURES
|
|
2025 £'000 |
2024 £'000 |
|
|
|
|
|
At beginning of year |
14,379 |
14,255 |
|
Additions - joint venture |
250 |
564 |
|
Impairment of joint venture |
(250) |
(150) |
|
Share of net profit / (loss) of joint venture accounted for using the equity method |
361 |
(290) |
|
At end of year |
14,740 |
14,379 |
The Group has a 50% share in Amberton Limited. Additions in the year include £250,000 (2024: £150,000) of investment in Amberton Limited and which was subsequently written down to a carrying value of £Nil (2024: £Nil). Amberton Limited, which is a Jersey registered entity, was incorporated in January 2021 and has been established as a joint venture to manage the loan note programme going forward. The remaining £Nil (2024: £414k) of additions is support provided to Hawkbridge in order for it to meet its running costs.
On 5 December 2023, the Group entered into a Joint Venture ("JV") agreement with Hawk Family Office Limited for a new bridge and development lending business in the Channel Islands. Sancus Lending (Jersey) Limited ("SLJL") entered into a Business and Asset Purchase Agreement ("BAPA") with Hawk Lending Limited (the previous lending business of Hawk Family Office Limited) and Hawkbridge Limited (the new joint venture lending business) ("Hawkbridge"). Under the terms of the BAPA, SLJL sold to Hawkbridge Limited its business as a going concern including goodwill, business information, moveable assets, records and third party rights. The consideration for the business of SLJL was the issue of 12 shares in the newly formed JV holding company, Hawkbridge Limited, giving Sancus Group Holdings Limited a 50% ownership in the JV. Hawkbridge Limited has two wholly owned subsidiaries, Hawkbridge Lending Limited and Westmead Debt Services Limited.
Under the joint venture shareholder agreement, all new Channel Islands lending business will be written through Hawkbridge. Hawkbridge will also provide administration and other services to SLJL and Hawk Lending Limited.
Under IFRS 11, this joint arrangement is classified as a joint venture and has been included in the consolidated financial statements using the equity method.
Summarised financial information in relation to Hawkbridge is presented below:
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Current assets |
2,799 |
2,835 |
|
Non-current assets |
28,522 |
28,520 |
|
Current liabilities |
1,841 |
2,596 |
|
|
|
|
|
Included in the above amounts are: |
|
|
|
Cash and cash equivalents |
20 |
133 |
|
Current financial liabilities (excluding trade payables) |
1,838 |
2,471 |
|
|
|
|
|
Net assets (100%) |
29,480 |
28,759 |
|
Group share of net assets (50%) |
14,740 |
14,379 |
|
Revenues |
1,486 |
710 |
|
|
|
|
|
Profit / (loss) and total comprehensive income / (loss) for the period (100%) |
722 |
(580) |
|
Group share of total comprehensive income / (loss) (50%) |
361 |
(290) |
|
|
|
|
|
Included in the above amounts are: |
|
|
|
Depreciation and amortisation |
5 |
2 |
No dividends were received from the JV during the year ended 31 December 2025 (2024: £nil).
The JV is a private company; therefore no quoted market prices are available for its shares.
The Group has no additional commitments relating to the JV.
11. EARNINGS PER ORDINARY SHARE
Consolidated profit per ordinary share has been calculated by dividing the consolidated profit for the year after tax attributable to ordinary shareholders of £950k (2024: £nil) by the weighted average number of Ordinary Shares (excluding treasury shares) outstanding during the period of 584,656,887 (2024: 584,138,346).
Note 16 describes the warrants in issue, which are currently out of the money. As such the warrants have not been considered to have a dilutive effect on the loss per ordinary share in the current year.
|
|
2025 |
2024 |
|
|
|
|
|
Number of shares |
1,085,859,939 |
584,138,346 |
|
Weighted average no. of shares in issue throughout the year |
584,656,887 |
584,138,346 |
|
Basic profit per share |
0.16p |
0.00p |
|
Diluted profit per share |
0.16p |
0.00p |
12. PROPERTY, PLANT AND EQUIPMENT
|
Cost |
Right-of-use assets £'000 |
Property & Equipment £'000 |
Total
£'000 |
|
At 31 December 2023 |
1,365 |
419 |
1,784 |
|
Additions in the year |
467 |
20 |
487 |
|
Disposals in the year |
(1,365) |
- |
(1,365) |
|
At 31 December 2024 |
467 |
439 |
906 |
|
|
|
|
|
|
Additions in the year |
412 |
97 |
509 |
|
Disposals in the year |
- |
- |
- |
|
At 31 December 2025 |
879 |
536 |
1,415 |
|
|
|
|
|
|
Accumulated depreciation |
Right-of-use assets £'000 |
Property & Equipment £'000 |
Total
£'000 |
|
At 31 December 2023 |
1,084 |
406 |
1,490 |
|
Charge in the year |
284 |
14 |
298 |
|
Disposals in the year |
(1,355) |
- |
(1,355) |
|
At 31 December 2024 |
13 |
420 |
433 |
|
|
|
|
|
|
Charge for the year |
127 |
34 |
161 |
|
Disposals in the year |
- |
- |
- |
|
At 31 December 2025 |
140 |
454 |
594 |
|
|
|
|
|
|
Net book value 31 December 2025 |
739 |
82 |
821 |
|
|
|
|
|
|
Net book value 31 December 2024 |
454 |
19 |
473 |
13. OTHER INTANGIBLE ASSETS
|
|
|
|
|
Cost |
|
£'000 |
|
|
|
|
|
At 31 December 2023 |
|
1,584 |
|
Additions in the year |
|
- |
|
At 31 December 2024 |
|
1,584 |
|
Additions in the year |
|
- |
|
Disposals in the year |
|
(913) |
|
At 31 December 2025 |
|
671 |
|
|
|
|
|
Amortisation |
|
£'000 |
|
At 31 December 2023 |
|
1,584 |
|
Charge in the year |
|
- |
|
At 31 December 2024 |
|
1,584 |
|
Charge in the year |
|
- |
|
Disposals in the year |
|
(913) |
|
At 31 December 2025 |
|
671 |
|
Net book value 31 December 2025 |
|
- |
|
Net book value 31 December 2024 |
|
- |
Other intangible assets comprise capitalised contractors' costs and costs related to core systems development. The assets have been fully amortised. The legacy platform was closed down during the year and residual funds were distributed to the funders.
14. OTHER INVESTMENTS
Other investments of £350,000 (2024: £100,000) represents the investment by the Group in non-voting capital in its Loan Note programme entities.
15. TRADE AND OTHER RECEIVABLES
|
|
2025 £'000 |
2024 £'000 |
|
|
|
|
|
Loan fees, interest and similar receivables |
17,106 |
10,943 |
|
Receivable from associated companies |
- |
3 |
|
Hedging contracts |
73 |
- |
|
Other trade receivables and prepaid expenses |
1,042 |
991 |
|
|
18,221 |
11,937 |
Loan fees, interest and similar receivables amounted to £22,491,000 at 31 December 2025 (2024: £16,293,000) before provisions against receivables of £5,385,000 (2024: £5,350,000).
16. SHARE CAPITAL, SHARE PREMIUM & DISTRIBUTABLE RESERVE
Sancus has the power under its articles of association to issue an unlimited number of ordinary shares of no par value.
501,721,593 ordinary shares were issued during the year (2024: Nil).
|
Share Capital - ordinary shares of nil par value |
|
|
|
|
|
2025 |
2024 |
|
|
|
Number of shares |
Number of shares |
|
|
|
|
|
|
|
At beginning of the year |
584,138,346 |
584,138,346 |
|
|
Issued during the year |
501,721,593 |
- |
|
|
At end of the year |
1,085,859,939 |
584,138,346 |
|
|
Share Premium - Ordinary shares of nil par value |
|
|
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
|
|
|
|
At beginning of the year |
118,340 |
118,340 |
|
Issue of ordinary shares |
2,040 |
- |
|
At end of the year |
120,380 |
118,340 |
Ordinary shareholders have the right to attend and vote at Annual General Meetings and the right to any dividends or other distributions which the company may make in relation to that class of share.
Treasury Shares
|
|
|
2025 Number of shares |
2024 Number of shares |
|
|
|
|
|
|
Balance at start and end of the year
|
|
11,852,676 |
11,852,676 |
|
|
|
2025 £'000
|
2024 £'000
|
|
Balance at start and end of the year |
|
1,172 |
1,172 |
Warrants in Issue
As at 31 December 2025 there were 89,396,438 (2024: 89,396,438) Warrants in issue to subscribe for new ordinary shares at a subscription price of 2.25 pence per ordinary share. The Warrants are exercisable on at least 30 days notice within the year ended 31 December 2025. The Warrants in issue are classified as equity instruments because a fixed amount of cash is exchangeable for a fixed amount of equity, there being no other features which could justify a financial liability classification. The fair value of the warrants at 31 December 2025 is £Nil (2024: £Nil). As the Warrants were not exercised within the year ended 31 December 2025, they will subsequently be cancelled.
The following describes the nature and purpose of each reserve within equity:
Share premium - Amount subscribed for share capital in excess of nominal value.
Treasury shares - weighted average cost of own shares held in treasury.
Foreign exchange reserve - gains/losses arising on retranslating the net assets of Sancus Lending (Ireland) Limited into the Group.
Retained earnings - All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
17. LIABILITIES
|
|
2025 |
2024 |
|
Non-current liabilities |
£'000 |
£'000 |
|
|
|
|
|
ZDP shares (1) |
3,035 |
8,773 |
|
Corporate Bond (2) |
21,333 |
16,948 |
|
Pollen Facility (3) |
151,039 |
89,610 |
|
Preference shares (4) |
9,650 |
5,000 |
|
Irish Loan Note (5) |
872 |
827 |
|
Paragon Facility (6) |
417 |
- |
|
Lease liabilities (Notes 2(u) & 24) |
605 |
423 |
|
|
186,951 |
121,581 |
|
|
2025 |
2024 |
|
Current liabilities |
£'000 |
£'000 |
|
|
|
|
|
Accounts payable |
623 |
316 |
|
Interest payable |
2,193 |
1,263 |
|
Accruals and other payables |
3,938 |
980 |
|
Hedging contracts |
- |
2 |
|
Taxation |
88 |
10 |
|
Provisions for financial guarantees |
- |
11 |
|
Lease liabilities (Notes 2(u) & 24) |
137 |
20 |
|
|
6,979 |
2,602 |
Provisions for financial guarantees are recognised in relation to ECLs on off-balance sheet loans and receivables where the company has provided a subordinated position or other guarantee (Note 25). No such provision was required in the current year (2024: £11,000). The fair value is determined using the exact same methodology as that used in determining ECLs (Note 2(f) and Note 22).
|
|
2025 |
2024 |
|
Interest costs on debt facilities |
£'000 |
£'000 |
|
|
|
|
|
ZDP shares (1) |
432 |
1,239 |
|
Corporate Bond (2) |
1,654 |
1,088 |
|
Pollen Facility (3) |
12,716 |
10,165 |
|
Preference shares (4) |
1,036 |
518 |
|
Irish Loan Note (5) |
80 |
8 |
|
Paragon Facility (6) |
145 |
- |
|
|
16,063 |
13,018 |
(1) ZDP shares
The ZDP shares have a maturity date of 5 December 2030 following ZDP shareholders approving a 3 year extension of the final capital entitlement repayment date on 24 June 2025. On this date, the ZDP shareholders also approved the suspension of any further capital growth from 24 June 2025, resulting in the final capital entitlement being £2.0990 per ZDP share. Prior to this date, the ZDP shares accrued interest at an average of 9% per annum.
Under the Companies (Guernsey) Law, 2008 shares in the Company can only be redeemed if the Company can satisfy the solvency test prescribed under that law. Refer to the Company's Memorandum and Articles of Incorporation for full details of the rights attached to the ZDP shares. This document can be accessed via the Company's website, www.sancus.com.
The Company purchased 1,388,889 ZDP shares of no par value at a price of £1.08 per ZDP share on 29 April 2024 and a further 1,854,910 ZDP shares at a price of £1.08 per ZDP share on 9 December 2024. The ZDP shares purchased in April 2024 are held as treasury shares and the shares purchased in December 2024 were cancelled. 1,157,417 ZDP shares were acquired under a tender offer in June 2025 at a price of 120p per ZDP share. This was financed by the issuance of £1,389,000 Sancus Bonds to Somerston Fintech Limited. The ZDP shares acquired under this tender offer were cancelled. 1,700,000 ZDP shares were acquired under a tender offer in December 2025 at a price of 120p per ZDP share in exchange for the issue of 501,721,593 new ordinary shares to Somerston Fintech Limited. The ZDP shares acquired under this tender offer were cancelled.
At 31 December 2025, the Company held 11,894,628 ZDP shares in Treasury (2024: 11,894,628) with an aggregate value of £24,966,824 (2024: £23,956,091).
(2) Corporate Bond
The corporate bond outstanding at 31 December 2025 was £21.3m (2024: £17m). During the prior year, bondholders approved an extension in the maturity date of the bonds to 31 October 2027 from 31 December 2025 and an increase in the coupon to 8% from 7% (2024: 8%). In June 2025, bondholders approved an amendment to the terms of the bonds to introduce a payment-in-kind interest option, allowing bondholders to elect to receive interest rolled up and paid on maturity at an increased rate of 8.5% per annum, instead of the 8% cash coupon paid quarterly.
(3) Pollen Facility (previously HIT Facility)
Sancus signed a £125m facility agreement with funds managed by Pollen Street PLC ("Pollen") in November 2022. In June 2025, Sancus signed a new 5 year facility agreement with Pollen increasing the facility up to £300m and with a 5 year expiry date (June 2030). This new facility enables Sancus to draw funds in both GBP and EUR.
The Pollen facility has portfolio performance covenants, including that actual loss rates are not to exceed 4% in any twelve month period and underperforming loans are not to exceed 10% of the portfolio. Sancus Group participates 10% on every drawdown with a first loss position on the Pollen facility. Sancus has also provided Pollen with a guarantee that will continue to ensure the orderly wind down of the loan book, in the event of the insolvency of Sancus Group, given its position as facility and security agent. Refer to Note 25 Commitments and Guarantees.
(4) Preference Shares
In April 2024, Somerston Fintech Limited, a subsidiary of Somerston Group, the majority shareholder of the Company, subscribed for £5,000,000 of preference shares in Sancus Loans Limited ("Sancus Loans"). A further £4,650,000 preference shares have been subscribed for in the year to 31 December 2025. The Preference Shares had a non-cash, cumulative coupon of 15% and a maturity date of 23 November 2026.
(5) Irish Loan Note
In November 2024, Sancus Loans No.3 Limited issued a €1,000,000 loan note to Aatazar Unlimited Company. The loan note bears interest at 9% and is repayable in November 2027.
(6) Paragon Facility
In July 2025, Sancus Loans No.4 Limited entered into an agreement with Paragon Bank PLC for the provision of a £20 million committed funding facility. As at 31 December 2025, this facility has not been drawn down.
(6) Somerston Loans Facility
In July 2025, Somerston Loans Limited, a subsidiary of Somerston Group, the majority shareholder of the Company, signed an unsecured, uncommitted revolving loan facility of up to £5,000,000 with Sancus Loans No. 4 Limited. The loan has a non-cash, cumulative coupon of 9.75% p.a. above the base rate of the Bank of England compounded quarterly and a maturity date of 24 January 2030. As at 31 December 2025, £500,000 has been drawn down under this loan.
18. TAXATION
Reconciliation of tax charge
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Accounting profit before tax |
1,154 |
130 |
|
|
|
|
|
Guernsey Corporation Tax at 0% (2024: 0%) |
- |
- |
|
Jersey Corporation Tax at 10% (2024: 10%) |
- |
- |
|
Ireland Corporation Tax at 12.5% (2024: 12.5%) |
204 |
130 |
|
Tax expense |
204 |
130 |
Certain of the Group's subsidiaries have an estimated £29.1m (2024: £22.8m) of losses between them available to carry forward to offset against qualifying future trading profits. The Group does not recognise deferred tax assets in respect of losses arising because in the opinion of the directors the quantum and timing of any suitable taxable profits which can utilise these losses is unknown.
19. NOTES TO THE CASH FLOW STATEMENT
Cash generated from operations (excluding loan movements)
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Profit for the year |
950 |
- |
|
Adjustments for: |
|
|
|
Other net gains |
(2,886) |
(2,624) |
|
Finance costs |
654 |
1,176 |
|
Impairment of joint ventures |
250 |
150 |
|
Changes in expected credit losses |
(227) |
(402) |
|
Amortisation/depreciation of fixed assets |
161 |
298 |
|
Amortisation of debt issue costs |
323 |
33 |
|
Changes in working capital: |
|
|
|
Trade and other receivables |
(5,984) |
(3,482) |
|
Trade and other payables |
4,304 |
884 |
|
Cash outflow from operations (excluding loan movements) |
(2,455) |
(3,967) |
Changes in liabilities arising from financing activities
The tables below detail changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be classified in the Group's consolidated cash flow statement as cash flows from financing activities.
|
|
1 January 2025 £'000 |
Payments 1 £'000 |
Receipts 1 £'000 |
Debt issue costs 1 £'000 |
Amortisation of debt issue costs Non-cash £'000 |
Other Non-cash £'000 |
31 December 2025 £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
ZDP Shares |
8,773 |
(1,389) |
- |
(172) |
56 |
(4,233)2 |
3,035 |
|
|
Corporate Bond |
16,948 |
- |
3,988 |
- |
20 |
377 |
21,333 |
|
|
Pollen Facility |
89,610 |
- |
61,505 |
(323) |
247 |
- |
151,039 |
|
|
Preference Shares |
5,000 |
- |
4,650 |
- |
- |
- |
9,650 |
|
|
Irish Loan Note |
827 |
- |
- |
- |
- |
45 |
872 |
|
|
Paragon Facility |
- |
- |
500 |
(100) |
- |
17 |
417 |
|
|
Lease Liability |
443 |
(113)1 |
- |
- |
- |
412 |
742 |
|
|
Total liabilities |
121,601 |
(1,502) |
70,643 |
(595) |
323 |
(3,382) |
187,088 |
|
|
|
1 January 2024 £'000 |
Payments 1 £'000 |
Receipts 1 £'000 |
Debt issue costs 1 £'000 |
Amortisation of debt issue costs Non-cash £'000 |
Other Non-cash £'000 |
31 December 2024 £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
ZDP Shares |
13,967 |
(3,503) |
- |
(85) |
62 |
(1,668)2 |
8,773 |
|
|
Corporate Bond |
14,950 |
- |
2,003 |
(8) |
3 |
- |
16,948 |
|
|
Pollen Facility |
77,169 |
- |
12,250 |
(24) |
215 |
- |
89,610 |
|
|
Preference Shares |
- |
- |
5,000 |
- |
- |
- |
5,000 |
|
|
Irish Loan Note |
- |
- |
827 |
- |
- |
- |
827 |
|
|
Lease Liability |
282 |
(296)1 |
- |
- |
- |
457 |
443 |
|
|
Total liabilities |
106,368 |
(3,799) |
20,080 |
(117) |
280 |
(1,211) |
121,601 |
|
1 These amounts can be found under financing cash flows in the cash flow statement.
2 Comprises interest accruals and unpaid debt issue costs where applicable.
20. CONSOLIDATED SUBSIDIARIES
|
The Directors consider the following entities as wholly owned subsidiaries of the Group as at 31 December 2025. Their results and financial positions are included within its consolidated results.
|
Sancus Group Holdings Limited and Sancus Holdings (UK) Limited act as holding companies. Sancus Properties Limited engages in property development. Fintech Ventures Limited is an investment company, investing in Fintech companies. The activities of the remaining companies named above relate to the core business of lending.
21. FINTECH VENTURES AND OTHER INVESTMENTS
The Directors consider the following entities as associated undertakings of the Group as at 31 December 2025.
|
Name of Investment: |
Nature of holding |
Country of incorporation |
Percentage holding |
Measurement |
|
FinTech Ventures: |
|
|
|
|
|
Ovamba Solutions Inc |
Indirectly held - Equity |
United States of America |
20.18% |
Fair Value |
The percentage holdings in the above table are on a fully diluted basis, assuming any warrants and management options all vest.
22. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT
|
Sancus loans and loan equivalents |
2025 £'000 |
2024 £'000 |
|
Non-current |
|
|
|
Sancus loans |
- |
- |
|
Sancus Loans Limited loans |
37,848 |
7,373 |
|
Total non-current Sancus loans and loan equivalents |
37,848 |
7,373 |
|
|
|
|
|
Current |
|
|
|
Sancus loans |
480 |
386 |
|
Sancus Loans Limited loans |
119,380 |
84,945 |
|
Total current Sancus loans and loan equivalents |
119,860 |
85,331 |
|
|
|
|
|
Total Sancus loans and loan equivalents |
157,708 |
92,704 |
Fair Value Estimation
The financial assets and liabilities measured at fair value in the Consolidated Statement of Financial Position are grouped into the fair value hierarchy as follows:
|
|
2025 |
2024 |
|||
|
|
Level 2 |
Level 3 |
Level 2 |
Level 3 |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
FinTech Ventures investments |
- |
- |
- |
- |
|
|
Derivative contracts |
73 |
- |
(2) |
- |
|
|
Total assets at Fair Value |
73 |
- |
(2) |
- |
|
All of the FinTech Ventures investments are categorised as Level 3 in the fair value hierarchy. In the past the Directors have estimated the fair value of financial instruments using discounted cash flow methodology, comparable market transactions, recent capital raises and other transactional data including the performance of the respective businesses. Having considered the terms, rights and characteristics of the equity and loan stock held by the Group in the FinTech Ventures investments, the Board's estimate of liquidation value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in the performance of these businesses and access to future returns via its current holdings could affect the amounts ultimately realised on the disposal of these investments, which may be greater or less than £Nil. There have been no transfers between levels in the period (2024: None).
|
FinTech Ventures investments |
|
|
|
|
|
|
|
|
|
2025 |
Equity |
Loans |
Total |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Opening fair value |
- |
- |
- |
|
New investments/divestments |
- |
- |
- |
|
Realised gains recognised in profit and loss |
- |
- |
- |
|
Closing fair value |
- |
- |
- |
|
|
|
|
|
|
2024 |
Equity |
Loans |
Total |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Opening fair value |
- |
- |
- |
|
New investments/divestments |
- |
- |
- |
|
Realised gains recognised in profit and loss |
- |
- |
- |
|
Closing fair value |
- |
- |
- |
Assets at Amortised Cost
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Sancus loans and loan equivalents |
157,708 |
92,704 |
|
Trade and other receivables |
17,106 |
10,946 |
|
Cash and cash equivalents |
3,164 |
2,529 |
|
Total assets at amortised cost |
177,978 |
106,179 |
Due to the relatively short-term nature of the above assets, their carrying amount is considered to be the same as their fair value.
Liabilities at Amortised Cost
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
ZDP Shares |
3,035 |
8,773 |
|
Corporate Bond |
21,333 |
16,948 |
|
Pollen Facility |
151,039 |
89,610 |
|
Preference Shares |
9,650 |
5,000 |
|
Irish Loan Note |
872 |
827 |
|
Paragon Facility |
417 |
- |
|
Trade and other payables |
7,584 |
3,012 |
|
Provisions in respect of guarantees |
- |
11 |
|
Total liabilities at amortised cost |
193,930 |
124,181 |
Refer to Note 17 for further information on liabilities.
Risk Management
The Group is exposed to financial risk through its investment in a range of financial instruments, i.e. in the equity and debt of investee companies and through the use of debt instruments to fund its investment in loans. Such risks are categorised as capital risk, liquidity risk, investment risk, credit risk, and market risk (market price risk, interest rate risk and foreign currency risk).
Comments supplementary to those on risk management in the Corporate Governance section of this report are included below.
(1) Capital Risk Management
The Group's capital comprises ordinary shares as well as a number of debt instruments. Its objective when managing this capital is to enable the Group to continue as a going concern in order to provide a consistent appropriate risk-adjusted return to shareholders, and to support the continued development of its investment activities. Details of the Group's equity is disclosed in Note 16 and of its debt in Note 17.
(2) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. At the end of the reporting period the Group held cash of £3,164,000. The Group Treasury Committee monitors rolling forecasts of the Group's cash position in relation to its obligations as they become due on a monthly basis. In addition, the Group's liquidity management involves projecting cash flows and considering the level of liquid assets necessary to meet obligations. Where necessary contingency plans are made to realise assets which are reasonably liquid in the short term.
The following table analyses the Group's financial liabilities into relevant maturity groupings based on the period to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.
|
Contractual maturities of financial liabilities |
Within 12 months |
Between 1 and 2 years |
Between 2 and 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
2025 |
|
|
|
|
|
ZDP shares |
- |
- |
3,035 |
3,035 |
|
Corporate bond |
- |
21,333 |
- |
21,333 |
|
Sancus Loans Limited |
- |
- |
151,039 |
151,039 |
|
Preference shares |
9,650 |
- |
- |
9,650 |
|
Irish Loan Note |
- |
872 |
- |
872 |
|
Paragon Facility |
- |
- |
417 |
417 |
|
Trade and other payables |
6,979 |
96 |
509 |
7,584 |
|
Total liabilities |
16,629 |
22,301 |
155,000 |
193,930 |
|
Contractual maturities of financial liabilities |
Within 12 months |
Between 1 and 2 years |
Between 2 and 5 years |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
2024 |
|
|
|
|
|
ZDP shares |
- |
- |
8,773 |
8,773 |
|
Corporate bond |
- |
- |
16,948 |
16,948 |
|
Sancus Loans Limited |
- |
89,610 |
- |
89,610 |
|
Preference shares |
- |
5,000 |
- |
5,000 |
|
Irish Loan Note |
- |
- |
827 |
827 |
|
Trade and other payables |
2,084 |
541 |
400 |
3,025 |
|
Total liabilities |
2,084 |
95,151 |
26,948 |
124,183 |
(3) Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates and that mismatches in the interest rates applying to assets and liabilities will impact on the Group's earnings.
The Group's cash balances, debt instruments and loan notes are exposed to interest rate risk.
The Group did not enter into any interest rate risk hedging transactions during the current or prior years.
The table below summarises the Group's exposure to interest rate risk:
|
|
|
Floating rate Financial Instruments |
Fixed Rate Financial Instruments |
Total |
|
2025 |
£'000 |
£'000 |
£'000 |
|
|
Assets |
|
|
|
|
|
Sancus loans and loan equivalents |
145,073 |
12,635 |
157,708 |
|
|
Cash and cash equivalents |
3,164 |
- |
3,164 |
|
|
Total assets |
148,237 |
12,635 |
160,872 |
|
|
Liabilities |
|
|
|
|
ZDP shares |
- |
3,035 |
3,035 |
|
Corporate bond |
- |
21,333 |
21,333 |
|
Sancus Loans Limited |
151,039 |
- |
151,039 |
|
Preference shares |
- |
9,650 |
9,650 |
|
Irish Loan Note |
872 |
- |
872 |
|
Paragon Facility |
417 |
- |
417 |
|
Total liabilities |
152,328 |
34,018 |
186,346 |
|
Total interest sensitivity gap |
(4,091) |
(21,383) |
(25,474) |
|
|
|
Floating rate Financial Instruments |
Fixed Rate Financial Instruments |
Total |
|
2024 |
£'000 |
£'000 |
£'000 |
|
|
Assets |
|
|
|
|
|
Sancus loans and loan equivalents |
90,444 |
2,260 |
92,704 |
|
|
Cash and cash equivalents |
2,529 |
- |
2,529 |
|
|
Total assets |
92,973 |
2,260 |
95,233 |
|
|
Liabilities |
|
|
|
|
ZDP shares |
- |
8,773 |
8,773 |
|
Corporate bond |
- |
16,948 |
16,948 |
|
Sancus Loans Limited |
89,610 |
- |
89,610 |
|
Preference shares |
- |
5,000 |
5,000 |
|
Irish Loan Note |
- |
827 |
827 |
|
Total liabilities |
89,610 |
31,548 |
121,158 |
|
Total interest sensitivity gap |
3,363 |
(29,288) |
(25,925) |
Interest rate sensitivities
The Group currently holds £3,164,000 in cash deposits, predominantly in sterling. Whilst interest rates are currently positive, they have, in the recent past, gone negative in certain jurisdictions. At the current level of cash deposits this could cost the Group £31,640 per annum for every 1% decrease in interest rates. The Group does not hold significant amounts in foreign currencies for any period of time.
The Treasury Committee reviews interest rate risk on an ongoing basis, and the exposure is reported quarterly to the Board and/or Audit and Risk Committee.
(4) Investment risk
Investment risk is defined as the risk that an investment's actual return will be different to that expected. Historically investment risk primarily arose from the Group's investment in its FinTech Ventures portfolio (see Note 3). This risk was in turn driven by the underlying risks taken by the platforms themselves - their own strategic, liquidity, credit and operational risks. Given that the Fintech portfolio is now held at £Nil the Group has no further exposure to investment risk, but does still retain investments in a number of Fintech companies.
The Group measures fair values of the Fintech Portfolio using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.
· Level 1 - Inputs that are quoted market prices (unadjusted) in active markets for identical instruments. A market is regarded as "active" if transactions of the asset or liability take place with sufficient frequency and volume to provide pricing information on an on-going basis. The Group measures financial instruments quoted in an active market at a bid price.
· Level 2 - Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.
· Level 3 - Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments. If in the case of any investment the Directors at any time consider that the above basis of valuation is inappropriate or that the value determined in accordance with the foregoing principles is unfair, they are entitled to substitute what in their opinion, is a fair value. In this case, the fair value is estimated with care and in good faith by the Directors in consultation with the Executive Management Team with a view to establishing the probable realisation value for such shares as at close of business on the relevant valuation day.
All of the FinTech Ventures investments are categorised as Level 3 in the fair value hierarchy. In the past the Directors have estimated the fair value of financial instruments using discounted cash flow methodology, comparable market transactions, recent capital raises and other transactional data including the performance of the respective businesses. Having considered the terms, rights and characteristics of the equity and loan stock held by the Group in the FinTech Ventures investments, the Board's estimate of liquidation value of these assets is £Nil at 31 December 2025 (2024: £Nil). Changes in the performance of these businesses and access to future returns via its current holdings could affect the amounts ultimately realised on the disposal of these investments, which may be greater or less than £Nil. There have been no transfers between levels in the period (2024: None).
(5) Credit risk
Credit risk is defined as the risk that a borrower/debtor may fail to make required repayments within the contracted time scale. The Group invests in senior debt, senior subordinated debt, junior subordinated debt and secured loans. Credit risk is taken in direct lending to third party borrowers, investing in loan funds, lending to associated platforms and loans arranged by associated platforms.
The Group mitigates credit risk by only entering into agreements related to loan instruments in which there is sufficient security held against the loans or where the operating strength of the investee companies is considered sufficient to support the loan amounts outstanding.
Credit risk is determined on initial recognition of each loan and re-assessed at each reporting date. The risk assessment is undertaken by the Executive Management Team at the time of the agreements, and the Executive Management Team continues to evaluate the loan instruments in the context of these agreements. Credit risk is categorised into Stage 1, Stage 2 and Stage 3 with Stage 1 being to recognise 12 month Expected Credit Losses (ECL), Stage 2 being to recognise Lifetime ECL not credit impaired and Stage 3 being to recognise Lifetime ECL credit impaired.
Credit risk is initially evaluated using the LTV, (LTGDV and LTF where relevant) and the circumstances of the individual borrower. For the majority of loans security takes the form of real estate. There has been no significant change in the quality of this security over the prior year. When determining credit risk macro-economic factors such as GDP, unemployment rates and other relevant factors including the war in Ukraine are also taken into account. A loan is considered to be in default when there is a failure to meet the legal obligation of the loan agreement. Having regards to the principles of IFRS 9 this would also include provisions against loans that are considered by management as unlikely to pay their obligations in full without realisation of collateral. Once identified as being in default a re-assessment of the credit risk of that loan will be undertaken using the factors as noted above. A decision will then be made as to whether to credit impair that asset.
In some instances borrowers will request loan modifications, extensions or renegotiation of terms. Any such event will trigger a reassessment of the credit risk of that loan where the reasons for the modification, extension or renegotiation will be carefully assessed and may result in that asset being credit impaired.
The entities in the Sancus Lending Group operate Credit Committees which are responsible for evaluating and deciding upon loan proposals, as well as monitoring the recoverability of loans, and taking action on any doubtful accounts. All lending undertaken by Sancus Lending is secured. The credit committee reports to the Sancus Lending Board on a quarterly basis.
Provision for ECL
A probability of default is assigned to each loan. This probability of default is arrived at by reference to historical data and the ongoing status of each loan which is reviewed on a regular basis. The loss given default is deemed to be nil where LTV is equal to or less than 65%, as it is assumed that the asset can be sold and full recovery made.
Provision for ECL is made using the credit risk, the probability of default (PD) and the loss given default (PL) all of which are underpinned by the Loan to Value (LTV), historical position, forward looking considerations and on occasion, subsequent events and the subjective judgement of the Board. Preliminary calculations for ECL are performed on a loan by loan basis using the simple formula Outstanding Loan Value (exposure at default) x PD x PL and are then amended as necessary according to the more subjective measures as noted above.
To reflect the time value of money ECL is discounted back to the reporting date using the effective interest rate of the asset (or an approximation thereof) that was determined at initial recognition.
The following tables provide information on amounts reserved for ECL on loans and loan equivalents as at 31 December 2025 and 31 December 2024 based on the model adopted by management.
|
Sancus loans and loan equivalents at 31 December 2025 |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
Closing loans at 31 December 2024 |
92,460 |
- |
245 |
92,705 |
|
New Loans |
98,754 |
- |
39 |
98,793 |
|
Loans Repaid |
(33,784) |
- |
(598) |
(34,382) |
|
Movement in ECL |
- |
- |
592 |
592 |
|
Closing loans at 31 December 2025 |
157,430 |
- |
278 |
157,708 |
|
Loss allowance at 31 December 2025 |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
Closing loss allowance at 31 December 2024 |
- |
- |
3,061 |
3,061 |
|
Decrease in provision |
- |
- |
(592) |
(592) |
|
Closing loss allowance at 31 December 2025 |
- |
- |
2,469 |
2,469 |
For certain loans the range of outcomes for loss given default considered by the Directors is significant and therefore has a material impact on the calculation of ECL.
|
Sancus loans and loan equivalents at 31 December 2024 |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
Closing loans at 31 December 2023 |
72,392 |
- |
6,373 |
78,765 |
|
New Loans |
55,507 |
- |
- |
55,507 |
|
Loans Repaid |
(35,402) |
- |
(11,588) |
(46,990) |
|
Transfers from Stage 1 to Stage 3 |
(37) |
- |
37 |
- |
|
Movement in ECL |
- |
- |
5,423 |
5,423 |
|
Closing loans at 31 December 2024 |
92,460 |
- |
245 |
92,705 |
|
|
|
|
|
|
|
Loss allowance at 31 December 2024 |
Stage 1 £'000 |
Stage 2 £'000 |
Stage 3 £'000 |
Total £'000 |
|
|
|
|
|
|
|
Closing loss allowance at 31 December 2023 |
- |
- |
8,484 |
8,484 |
|
Increase in provision |
- |
- |
(5,423) |
(5,423) |
|
Closing loss allowance at 31 December 2024 |
- |
- |
3,061 |
3,061 |
Reconciliation of Provision for ECLs to charge in the statement of comprehensive income
|
|
Loans £'000 |
Trade Receivables £'000 |
Guarantees £'000 |
Total £'000 |
|
|
|
|
|
|
|
Loss allowance at 31 December 2024 |
3,061 |
5,350 |
11 |
8,422 |
|
Credit for the year |
(315) |
99 |
(11) |
(227) |
|
Utilisations |
(277) |
(64) |
- |
(341) |
|
Loss allowance at 31 December 2025 |
2,469 |
5,385 |
- |
7,854 |
For certain loans the range of outcomes for loss given default considered by the Directors is significant and therefore has a material impact on the calculation of ECL.
(6) Market price risk
The Group has no exposure to market price risk of financial assets valued on a Level 1 basis as disclosed earlier in this note.
(7) Foreign exchange risk
Foreign exchange risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Investments made in currencies other than Sterling are currently valued at £Nil and therefore there is no exposure.
The exchange rates used by the Group to translate foreign currency balances are as follows:
|
Currency |
31 December 2025 |
31 December 2024 |
31 December 2023 |
|
EUR |
1.14678 |
1.20887 |
1.1534 |
|
USD |
1.34721 |
1.25152 |
1.2731 |
The Treasury Committee monitors the Group's currency position on a regular basis, and the Board of Directors reviews it on a quarterly basis. Loans denominated in Euros which are taken out through the Pollen facility are hedged using forward contracts. The following forward foreign exchange contracts were open at the respective dates:
At 31 December 2025
|
Counterparty |
Settlement date |
Buy Currency |
Buy Amount £'000 |
Sell currency |
Sell amount €'000 |
Unrealised gain £'000 |
|
|
|
|
|
|
|
|
|
Corpay |
January 2026 |
GBP |
11,767 |
Euro |
13,500 |
73 |
|
|
|
|
|
|
|
|
|
Unrealised gain on forward foreign contracts |
73 |
|||||
At 31 December 2024
|
Counterparty |
Settlement date |
Buy Currency |
Buy Amount £'000 |
Sell currency |
Sell amount €'000 |
Unrealised loss £'000 |
|
|
|
|
|
|
|
|
|
Alpha |
January 2025 |
GBP |
7,667 |
Euro |
9,245 |
20 |
|
Lumon Risk Management |
January 2025
|
GBP
|
36,530
|
Euro
|
44,170
|
(22)
|
|
Unrealised loss on forward foreign contracts |
(2) |
|||||
23. RELATED PARTY TRANSACTIONS
Transactions with the Directors/Executive Management Team
Non-executive Directors
As at 31 December 2025, the non-executive Directors' annualised fees, excluding all reasonable expenses incurred in the course of their duties which were reimbursed by the Company, were as detailed in the table below:
|
|
2025 |
|
2024 |
|
|
£ |
|
£ |
|
|
|
|
|
|
Tracy Clarke |
35,000 |
|
58,750 |
|
Steve Smith |
50,000 |
|
50,000 |
|
John Whittle |
42,500 |
|
42,500 |
Total Directors' fees charged to the Company for the year ended 31 December 2025 were £127,500 (2024: £151,250) with £Nil (2024: £Nil) remaining unpaid at the year-end.
Executive Management Team
The Executive Management Team consisted of Rory Mepham, James Waghorn and Keith Lawrence. The Executive Management Team members' remuneration from the Company, excluding all reasonable expenses incurred in the course of their duties which were reimbursed by the Company, was as detailed in the table below:
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Aggregate remuneration in respect of qualifying service - fixed salary |
611 |
538 |
|
Aggregate amounts contributed to money purchase pension schemes |
31 |
25 |
|
Aggregate bonus paid (cash) |
220 |
185 |
|
|
|
|
See remuneration report for further details. All amounts have been charged to operating expenses.
Carlton Management Services Limited ("Carlton") sub-lease office space in the Group's offices in Jersey, with a sub lease end date of 30 August 2036, at an annual cost of c.£100,000 p.a.
Somerston Capital Limited sub-lease office space in the Group's offices in the UK at an annual cost of £58,000 p.a.
Tracy Clarke is Managing Director of Carlton.
From time to time, the Somerston Group may participate as a co-Funder in Sancus loans, on the same commercial terms available to other co-Funders.
In April 2024, Somerston Fintech Limited ("Somerston"), a subsidiary of Somerston Group, the majority shareholder of the Company, subscribed for £5,000,000 of preference shares in Sancus Loans Limited ("Sancus Loans").
On 30 January 2025, Somerston Fintech Limited committed to subscribe for up to £10m of junior funding in the existing or future loan financing facilities of the Group, subject to standard conditions precedent. As at 31 December 2025, Somerston Fintech had provided junior funding of £7.05m under this commitment. This comprised the issuance of £1.9m of Sancus Bonds, £0.5m loan in Sancus Loans No.4 Limited and the issuance of £4.65m of Preference Shares in Sancus Loans. The Preference Shares have a non-cash, cumulative coupon of 15% and a maturity date of 23 November 2026.
Somerston Fintech Limited also subscribed for c.£1.4m of the Sancus Bond in June 2025 in order to facilitate the buyback of some ZDP Shares. Somerston Fintech Limited were issued 501,721,593 new ordinary shares in December 2025 in order to facilitate the buyback of some ZDP Shares.
In July 2025, Somerston Loans Limited, a subsidiary of Somerston Group, the majority shareholder of the Company, signed an unsecured, uncommitted revolving loan facility of up to £5,000,000 with Sancus Loans No. 4 Limited. The loan has a non-cash, cumulative coupon of 9.75% p.a. above the base rate of the Bank of England compounded quarterly and a maturity date of 24 January 2030. As at 31 December 2025, £500,000 has been drawn down under this loan.
The Group has not recorded any other transactions with any Somerston Group companies for the year ended 31 December 2025 (2024: none).
Directors' and Persons Discharging Managerial Responsibilities ("PDMR") shareholdings in the Company
The Directors and PDMRs had the following beneficial interests in the Ordinary Shares of the Company:
|
|
2025 |
2024 |
||
|
|
No. of Ordinary Shares Held |
% of Ordinary Shares |
No. of Ordinary Shares Held |
% of Ordinary Shares |
|
|
|
|
|
|
|
John Whittle |
2,138,052 |
0.20 |
2,138,052 |
0.37 |
|
Rory Mepham |
7,000,000 |
0.64 |
6,000,000 |
1.03 |
|
Robert Morton |
5,000,000 |
0.46 |
5,000,000 |
0.86 |
|
James Waghorn |
3,160,204 |
0.29 |
3,160,204 |
0.54 |
|
Keith Lawrence |
923,712 |
0.09 |
923,712 |
0.16 |
|
|
|
|
|
|
During the year and prior year no directors received dividends on their Ordinary Share holdings in the Company. In addition to the holding of Ordinary Shares disclosed above Rory Mepham and James Waghorn will also receive nil-cost options to acquire 5,500,000 and 3,500,000 Ordinary Shares respectively at a price of 0.5p per share under a Long Term Incentive Plan made in 2023 - See Remuneration Report.
In addition to their Sancus salaries, Rory Mepham and James Waghorn also receive other emoluments from Somerston for services they provide to other Somerston entities that are not related to the activities of Sancus.
From time to time members of key management personnel participate as co-funders in loans originated by the Group.
Transactions with connected entities
The following transactions with connected entities took place during the year:
|
|
2025 £'000 |
2024 £'000 |
|
Net receivable from / (payable to) related parties |
|
|
|
Amberton Limited |
- |
3 |
|
|
|
|
|
Office and staff costs recharges |
|
|
|
|
|
|
|
Amberton Limited |
55 |
13 |
|
|
|
|
There is no ultimate controlling party of the Company.
24. LEASES
The Group as Lessee
Maturity Analysis - contracted undiscounted cash flows
|
|
2025 £'000
|
2024 £'000
|
|
Within one year |
315 |
111 |
|
In the second to fifth years inclusive |
593 |
481 |
|
After five years |
419 |
493 |
|
|
1,327 |
1,085 |
All lease commitments relate to office space.
Lease liabilities included in the statement of financial position
|
|
2025 £'000
|
2024 £'000
|
|
Current |
137 |
20 |
|
Non-current |
605 |
423 |
|
|
742 |
443 |
Amounts recognised in the statement of comprehensive income
|
|
2025 £'000
|
2024 £'000 |
|
Depreciation expense on right-of-use assets |
127 |
284 |
|
Interest expense on lease liabilities |
59 |
22 |
|
Expense related to short term leases |
173 |
356 |
|
Income received from sub-leasing right-of-use assets |
119 |
93 |
25. COMMITMENTS AND GUARANTEES
The Group's commitments and guarantees are described below.
Pollen Facility
Sancus Group participates 10% on every loan funded by the Pollen facility, taking a first loss position. Sancus Group Lending Limited has provided Pollen with a guarantee capped at £4m following the restructure of the Pollen facility in November 2022 (previously was capped at £2m) and that it will continue to ensure the orderly wind down of the Pollen funded loan book, in the event of the insolvency of Sancus Group, given its position as facility and security agent. No provision has been provided in the financial statements (2024: £Nil).
Sancus Loan Notes
Loan Note 8 was launched in January 2022 and is closed for new subscriptions with AUM of £33.068m. Loan Note 8 matures on 1 December 2026 and has a coupon of 8% p.a. (payable quarterly), with Sancus providing a 20% first loss guarantee.
Loan Note 9 was launched in September 2024 and is closed for new subscriptions with an AUM of £25.6m. Loan Note 9 matures on 28 September 2029 and has a coupon of between 7.5% and 8.5% p.a. depending on participation level (payable monthly), with Sancus and Hawkbridge providing a 20% first loss guarantee jointly.
Amberton Loan Note 1 is a bespoke note that launched in May 2025, the note has AUM of £9.0m (including preference shares) as at 31 December 2025. Loan Note 1 matures on 14 May 2030 and has a coupon of 8% (payable monthly).
Amberton Loan Note 2 launched in December 2025, the note has AUM of £2.6m as at 31 December 2025. Loan Note 2 matures on 12 December 2030 and has a coupon of between 7.5% and 8.5% p.a. depending on participation level (payable monthly), with Sancus and Hawkbridge providing a 20% first loss guarantee jointly.
Warehouse Loan Note 1 launched in November 2025 with a mandate of offering 90 day underwriting capital. The note has AUM of £2.5m as at 31 December 2025 and matures on 4 November 2030 and has a coupon of 7% (payable quarterly).
Unfunded Commitments
As at 31 December 2025 the Group has unfunded commitments of £90.7m (2024: £68.4m). These unfunded commitments primarily represent the undrawn portion of development finance facilities. Drawdowns are conditional on satisfaction of specified conditions precedent, including that the borrower is not in breach of its representations or covenants under the loan or security documents. The figure quoted is the maximum exposure assuming that all such conditions for drawdown are met. Directors expect the majority of these commitments to be filled by Co-Funders.
26. EVENTS AFTER THE REPORTING DATE
In January 2026, Somerston subscribed for £1.4m of preference shares in Sancus Loans Limited. In February 2026 the Group announced an increase in the size of the Pollen facility to £300m and an extension of its term to February 2031. As part of the increase in the size of the facility, the advance rate has been increased to 92.5% and an uncapped guarantee provided by Sancus Group. In March 2026 the terms of the preference shares in issue by Sancus Loans Limited were adjusted so that (i) £8m of preference shares were re-papered as Euro preference shares, (ii) the coupon was amended to be a margin of 10.5% over the relevant benchmark rate and (iii) their maturity date was extended to February 2031. In March 2026 Somerston subscribed for £0.75m of Sancus Bond.