Supply@ME Capital : Interim-Financial-Statements-to-31-March_RNS-Number-6128R-1

EC4M 7RD

Bankers

Metro Bank Plc

1 Southampton Row Holborn

London WC1B 5HA

Registrars

Neville Registrars Limited Neville House Southampton SO14 2JF

Public Relations

Cicero/AMO

3 Pancras Square London

N1C 4AG

Accountant

Wilkins Kennedy Carnac Place Cams Hall Estate Fareham Portsmouth PO16 8UY

Investor Relations

Walbrook PR Ltd 4 Lombard Street London

Website

EC3V 9HDwww.supplymecapital.com

SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)

CONTENTS

CHAIRMAN'S LETTER AND CHIEF EXECUTIVE'S REPORT

FOR THE 12 MONTH PERIOD ENDED 31 MARCH 2020

1. Chairman's letter

The highlight for Supply@Me Capital Plc (theCompanyorSYME) in the 12 months to 31 March 2020 was the successful acquisition, via a reverse takeover, of Supply@Me S.r.l. and a Main Market Listing on the London Stock Exchange just prior to the period end.

Previous to this, the Company (formerly named Abal Group Plc) traded on London's Alternative Investment Market (AIM). Pursuant to AIM Rule 15, the Company became a cash shell on 5 February 2019 following the completion of the disposal of its core operating business (known as Imaginatik), and trading in the Company's shares was subsequently suspended on 6 August 2019. On 27 September 2019 the Company announced that it had entered into a conditional sale and purchase agreement to acquire the entire issued share capital of Supply@Me Srl. Cancellation of the admission to trading of the Company's ordinary shares on AIM took effect on 7 February 2020, in accordance with AIM Rule 41. The Main Market Listing of SYME successfully completed on the 23 March 2020, eight days before the end of this reporting period.

SYME is an early stage "FinTech" business which delivers an innovative technology platform for inventory monetisation that enables a wide range of manufacturing and trading customers to improve their working capital position by releasing capital from their inventory stock. SYME matches the working capital needs of its customers with capital invested by its inventory funders. Investors in SYME shares gain exposure to the fee income generated by the platform from inventory monetisation. Inventory funders invest in instruments that are secured on inventory portfolios. The companies that can benefit from the SYME system are found across a wide range of industry sectors including wholesale, retailing and general industrials.

Notwithstanding the COVID-19 backdrop, the Board believes that SYME's customer base remains strong and that the demand for inventory monetisation is growing. Whereas Just In Time (JIT) inventory strategies were previously the standard for manufacturing and trading businesses, increasingly following COVID-19, many such businesses are consciously choosing to build inventory to avoid supply chain shortages and subsequent loss of trade. Manufacturing locally rather than thousands of miles away and increasing inventory held may become the new norm. The Company is aware that retailers both on and offline are seeking suppliers who can guarantee inventory levels through a combination of in-house manufacturing, local production capabilities and higher levels of stock held. This is positive development for SYME's business model as companies will look to monetise the higher volumes of stock being held.

The impact of COVID-19 on the inventory funding market is more difficult to interpret, especially as interest rates are currently at historic lows. SYME's inventory investment asset will offer a relative positive margin compared to interest rates and many other rate linked investments. However, investors are undoubtedly more cautious, being less willing to move quickly into new asset classes, so the risk premium attached to alternative investment products has increased to reflect this. This theme will be developed in the Chief Executive's report.

Despite COVID-19 we still remain extremely confident for the future but as a result of the approximate three to four month delay to our business plan caused by COVID-19 we are having to push back our forecasts with a consequential impact on market expectations.

2.Chief Executive report

The reverse take over (RTO) of Supply@Me S.r.l. into Abal Group Plc completed in March this year. In the three months since and in the midst of the COVID-19 pandemic, the Company has continued to gain traction from its Inventory Monetisation Platform (Platform): SYME has been focused on managing its booked inventory customer portfolio (Originated Portfolio) and progressing inventory funding initiatives (Inventory Funding).

Although the Company listed successfully in the midst of the COVID-19 pandemic, this has undoubtedly had an impact, especially on the main operating company, Supply@Me S.r.l. which currently trades exclusively in Italy.

Performance in the remaining six months of the new financial reporting period to September 30 2020 will very much depend upon the success of European and domestic measures taken to combat COVID-19 and their impact on the Italian economy and capital markets.

Operational performance

On completion of the March RTO SYME reported funds raised by way of a placing of new ordinary shares of £2.24m (before expenses). The Company has utilised part of these proceeds, pursuant to its strategy, to reinforce and develop its group structure including the recruitment of a number of key personnel in strategic functions (eg enterprise risk management), legal and technology investments related to the Platform, communications (PR and IR) and development costs for the inventory funding programme.

Client Companies: Originated Portfolio

The Originated Portfolio is defined as comprising a pipeline of prospective contracts that have been originated with client companies. At the date of the RTO the Originated Portfolio stood at €972m and currently stands at €1.43bn.

At the date of this statement there are €555m of client companies ready to be served / for execution. We expect a significant proportion of these to be monetised once Inventory Funding has been secured.

As outlined in the Chairman's letter, SYME anticipates higher levels of demand for its services as the structure of the supply chain moves to the new norm of higher inventory levels.

Funders: Inventory Funding

The Inventory Funding process delivers the capital that enables the Platform to monetise its customers' inventory.

First Securitisation Programme

On 22 April 2020, SYME announced that it intends to issue a series of asset-backed securities secured against inventories purchased directly by SYME's special purpose vehicles. The objective this securitisation programme is to cover, within 12 months and through multi-issuances, the whole of SYME's current Originated Portfolio. This is subject to continual review as we monitor how institutional investors react to moving into a period coming out of lockdown.

SYME targeted Q2-Q3 2020 for its first note issuance. However, the COVID-19 pandemic and resultant heightened levels of uncertainty in capital markets, the increased cost of capital and extended decision-making processes by investors, have meant that this issuance inherently carries with it greater uncertainly of concluding within Q3 2020, and an increased probability that it could slip into Q4 2020. There will inevitably be an impact on the rollout of our business plan and our forecasts by three to four months and market expectations should adjust accordingly.

The Directors, however, remain firmly committed to working on all initiatives to secure appropriate funding as soon as possible.

Multi-channel funding strategy

In its Prospectus published in March the Company outlined its strategy is to develop a number of funding opportunities such that over time it will gain a diversified group of funders across a range of investment programmes.

To accelerate the delivery of the Inventory Monetisation service relating to the Originated Portfolio, in addition to the securitisation programme, the Company is progressing bridge financing lines secured on inventory with alternative lenders / funders. Discussions have been started with various other strategic funding partners.

Prospectus milestones

In addition to the Originated Portfolio and Inventory Funding objectives, the key 2020 milestone noted in the Prospectus was to commence operations in its first new geographical market outside of Italy, by the end of Q3 2020. The Company confirms it is in discussions to launch inventory monetisation operations in the UK.

Technology Infrastructure

SYME is headquartered in London with a subsidiary in Milan. The core technology team is based in Milan. Supply@ME Srl announced on 1 August 2019 a strategic partnership with SIA SpA which is currently the core provider of the distributed ledger technology (SIAchain) with respect to all the software modules of the Inventory Monetisation Platform. SIA SpA is a European leader in the design, creation and management of technology infrastructure for Financial Institutions.

The Inventory Monetisation Platform accordingly aims to target the same high-level standards of resiliency managed infrastructure, at the date, by SIA with reference to its global technology infrastructure.

Financial performance

Turnover in the twelve months to 31 March 2020 increased to £416k (£241k : 2019). This resulted in a gross profit of £26k (£145k : 2019). Exceptional costs of £224m have been written off as a result of the treatment of goodwill and the accounting for the transaction.

Material items within the consolidated statement of financial position which merit comment include the following:

Prior to the completion of the reverse acquisition, the current directors considered Supply@Me Capital plc did not meet the definition of a business in accordance with IFRS 3. Consequently, the reverse acquisition has not been accounted for as a business combination, but as a share based payment.

On 23 March 2020, Supply@Me Capital plc completed the following transactions, details of which are disclosed in the prospectus dated 4 March 2020 (the Prospectus):

• ·reverse acquisition of Supply@Me S.r.l., a company registered in Italy;

• ·placing of 331,604,094 shares; and

• ·admission to the Official List and trading on the London Stock Exchange's Main Market.

The transaction was effected by way of the issue of consideration shares. Due to Supply@Me Capital plc effectively having no substance, and that Supply@Me S.r.l. was acting as the parent company, the consolidated Group is accounted for as a capital reorganisation rather than a business combination. These interim financial statements have been prepared, in consultation with our accountants, on the basis that Supply@Me S.r.l. is the accounting acquirer and Supply@Me Capital plc the accounting acquiree.

As such, from an accounting perspective, the previous comparatives, and any results prior to 23 March 2020 of Supply@Me Capital plc have not been presented and the assets and liabilities of Supply@Me S.r.l. have been recorded in the consolidated financial statements at their pre-combination amounts.

This accounting policy is different to that set out in the Prospectus dated 4 March 2020 in relation to the reverse takeover. In the Prospectus, the unaudited pro-forma financial information accounted for the transaction under IFRS 3 as a Business Combination as described in section 2 of the Notes to the Financial Statements.

The financial results of Supply@Me S.r.l. are included using its original accounting year end namely 31 December as per IFRS 10, relating to non co-terminous year ends.

SYME recently changed its accounting reference date to 30 September as announced in the RNS dated 23 June 2020. This change is in line with the Board's intended strategy to align the accounting reference date to the operations of the Group, which in turn is aligned with the working capital cycles of our customer base, being manufacturing companies that tend to build up stocks during the year. The Group will publish audited accounts for the 18-month period from 1 April 2019 to 30 September 2020. Thereafter, interim and annual reports will be published each year for the 6 months to 31 March and 12 months to 30 September respectively.

Directors' Responsibility Statement

The Directors are responsible for preparing the interim financial statements in accordance with applicable law and regulations. A list of current directors is maintained on the Group's website:https://www.supplymecapital.com.

The Directors confirm that, to the best of their knowledge, the interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4 R.

The Directors further confirm that the interim financial statements include a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

The Directors have shared all the relevant working papers with their accountants and auditors.

However in accordance with the FCA's Disclosure and Transparency Rule 4.2.9(2), the Directors confirm that these interim condensed consolidated financial statements have not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

By Order of the Board

Alessandro Zamboni

Chief Executive Officer

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 12 MONTH PERIOD ENDED 31 MARCH 2020

Notes

12 months to 31 March 2020 £ '000

Year ended 31 March 2019 £ '000

Revenue

4

416

241

Cost of sales

(390)

(96)

Gross profit

26

145

Administrative expenses

(725)

(130)

Exceptional costs

5

(224,478)

-

Operating profit / (loss)

(225,177)

15

Finance costs

(132)

-

Profit / (loss) before tax

(225,177)

15

Taxation

6

(90)

(4)

Profit / (loss) for the period / year

(225,267)

11

Earnings per share (pence)

7

(8.95)

n/a

Notes

12 months to 31 March 2020 £ '000

Year ended 31 March 2019 £ '000

Profit / (loss) for the period / year

(225,267)

11

Other comprehensive incomeForeign operations FX translation

6

-

Total comprehensive profit / (loss) for the period / year

(225,261)

11

SUPPLY@ME CAPITAL PLC (PREVIOUSLY ABAL GROUP PLC)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2020

31 March 2020 31 March 2019

Notes

£ '000

£ '000

Assets Non-current assetsIntangible assets Investments

8

683 -373 -

683 373

Current assets

Trade and other receivables Cash and cash equivalents

1,781 293

1,848 2

3,629

295

Total assets

4,312

668

Equity and liabilities Equity

Share capital Reserves

9 10

5,420 142

(4,642) 12

778 154

Current liabilities

Trade and other payables

3,481 514