Interim Results, Share Issue and TVR

CHIEF EXECUTIVE OFFICER'S REVIEW

INTRODUCTION

Having become Group CEO on 10 July 2026, I am sharing our results for the six months ended 30 June 2026. During the period, we grew Group AUM by 11% to £339m (31 December 2025: £307m) and increased revenue by 36% to £13.1m (2025 H1: £9.7m). However, we have reported an operating loss of £(3.4m) for the period, compared with an operating loss of £(1.1m) in 2025 H1.  The loss primarily reflects the impact of the geopolitical and macro-economic backdrop on activity levels, funding costs and liquidity costs across the Group.  As outlined below, I am very confident in the opportunity for Sancus in its core UK and Irish markets.  However, it is apparent that the Channel Islands lending markets have different market dynamics and growth outlook than our UK and Irish markets.  We have consequently commenced a strategic review of our Channel Islands lending activities, including the Hawk JV, and have recognised a £14.0m non-cash impairment charge to adjust the carrying value of the Hawk JV in these results (2025 H1: £nil).

The opportunity for Sancus in its core UK and Irish markets reflects the strength of our client proposition and relationships and the teams and processes we have built. In these markets the business has entered the second half of the year with encouraging new business pipelines. However, it is also clear that we need to ensure the business is appropriately focused, structured and capitalised for the environment in which we operate, so that it can achieve operating profitability. I intend to provide a full strategic update by the time of the release of our results for the year ending 31 December 2026. This will set out how we will create a business that is fit for profitable growth, including by developing and executing plans that:

·      Sharpen focus on our target lending markets and products.

·      Simplify our operating model, reducing costs and resolving operational drag factors.

·      Deliver improved interest margins by lowering our cost of capital.

·      De-risk our balance sheet and improve liquidity.

FINANCIAL REVIEW

We have reported an operating loss of £(3.4m) for the period.  This compares to an operating loss of £(1.1m) in 2025 H1.  An explanation of the main factors driving this operating result is set out below. 

Revenue rose by 36% to £13.1m compared to £9.7m in H1 2025. This increase reflects fee income growth, and the benefits of AUM growth in our core UK and Irish businesses in particular:

·      UK AUM increased 21% to £152.2m (31 December 2025: £125.4m; 30 June 2025: £95.6m) with the business writing new loan facilities of £45.1m (H1 2025: £34.4m).

·      Irish AUM increased by 9% to £92.0m (31 December 2025: £84.3m; 30 June 2025: £61.7m) with the business writing new loan facilities of £27.0m (H1 2025: £25.4m).

·      Channel Islands AUM decreased slightly to £94.9m (31 December 2025: £97.1m; 30 June 2025: £101.6m).  The contraction reflects the winding down of the legacy Sancus Jersey business with the Hawk JV writing new loan facilities of £9.1m (H1 2025: £24.6m).

Notwithstanding the strong revenue growth, the result also reflected a number of other factors:

·      Operating Expenses.  Our reported operating expenses were £4.3m versus £3.0m in H1 2025.  This increase primarily  reflects strategic investments in headcount to support planned business growth - particularly in the UK and of central functions alongside certain other non-recurring charges.  We also incurred increased costs from the management of our activities in the Channel Islands.  As noted above, we plan to take steps to optimise our operating model during the remainder of 2026.  We expect this will lead to a material reduction in our run-rate cost base.

·      Credit quality.  During the period we incurred a modest IFRS9 charge of £0.7m, primarily relating to legacy loans, in comparison to an IFRS9 write-back of £0.2m in 2025 H1.  Overall, the credit quality of our on balance sheet financed loan portfolio remained stable during the period.

·      Funding costs. During the period we successfully renewed our facility with Pollen Street Capital, increasing its size to £300m and extending its maturity to February 2031. As at 30 June 2026, £184m was drawn under the facility (31 December 2025: £151m). This increased facility size gives us greater funding flexibility as we target longer-term growth. However, profitability in the current period was impacted by increased facility costs on drawn amounts and liquidity costs associated with a lower rate of loan deployment than originally anticipated. During the period we also incurred non-utilisation costs in connection with a new funding facility that we have not yet been able to operationalise. Together these factors, which we expect for the most part to reverse over time, contributed to a £0.8m deterioration in our profit. We continued to make progress in diversifying our sources of funding. As at 30 June 2026, the Loan Note programme funding managed via the Amberton joint venture was £94.0m, 28% higher than the balance as at 31 December 2025 (£73.5m).

·      Group borrowing costs were £1.1m in the period (2025 H1: £1.2m).  The slight reduction reflects the cessation of interest accruals on our Zero Dividend Preference Shares in June 2025, offset by increased costs from the Sancus Bond that is outstanding.

We have reported a loss before tax of £(17.4m) for the period.  This compares to a profit before tax of £0.1m in 2025 H1.  This loss before tax of £(17.4m) reflects the factors outlined above along with the £14.0m non-cash impairment charge booked to adjust the carrying value of our share of the Hawk JV.  This 2025 H1 profit before tax included a gain of £1.0m from the re-purchase of some of our Zero Dividend Preference Shares.

ESG

At Sancus, we are committed to taking Environmental, Social and Governance ("ESG") factors seriously. We recognise our responsibility to incorporate sustainability throughout the operations of our business, to be custodians of the environment and to practice good stewardship of our stakeholders' interests.

OUTLOOK

I am confident in the opportunities for Sancus in its core UK and Irish markets, not least given the strength of our client proposition, established relationships, the experience of our team and the processes we have built.  Notwithstanding challenging market conditions, the Group has entered H2 with an encouraging new business pipeline.  I believe that these factors, along with the steps we are taking to ensure the business is appropriately focused, structured and capitalised will allow the business to deliver sustainable operating profitability.  I look forward to working with colleagues and stakeholders in the coming months to take the steps needed to deliver this. 

Andrew Charnley

Chief Executive Officer

14 September 2026

RISKS, UNCERTAINTIES AND RESPONSIBILITY STATEMENT

Risks and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remainder of the financial year. These include, but are not limited to, Capital and liquidity risk, Regulatory and compliance risk, Market risk, Credit risk with respect to the loan book (primarily bridging loans and development loans), Operational risk and the execution of Sancus strategy. These risks remain unchanged from the year ended 31 December 2025 and are not expected to change in the 6 months to the end of the 2026 financial year. Further details on these risks and uncertainties can be found in the 2025 Annual Report.

Responsibility statement

The Directors confirm that to the best of their knowledge:

§ The Interim Report has been prepared in accordance with the AIM rules for Companies; and

§ This financial information has been prepared in accordance with IAS 34 as adopted by the UK.

Approved and signed on behalf of the Board of Directors

14 September 2026

INDEPENDENT REVIEW REPORT ON INTERIM FINANCIAL INFORMATION

Conclusion

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2026 which comprise the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in shareholders' equity, the condensed consolidated statement of cash flows and related notes 1 to 21.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2026 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the AIM Rules of the London Stock Exchange.

Basis of Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with UK adopted International Accounting Standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting'.

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of directors

The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies of the London Stock Exchange.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's and group'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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with International Standard on Review Engagements (UK) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review 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, for our review work, for this report, or for the conclusions we have formed. 

Moore Kingston Smith LLP

9 Appold Street,

London,

EC2A 2AP

14 September 2026

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

The accompanying Notes in the 'Notes to the Condensed Interim Financial Statements' section form an integral part of these financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited)

The financial statements were approved by the Board of Directors on 14 September 2026 and were signed on its behalf by:

The accompanying Notes in the 'Notes to the Condensed Interim Financial Statements' section form an integral part of these financial statements.