Eight Capital Partners PLC says balance sheet transformation will enable faster growth

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Eight Capital Partners PLC (AQSE:ECP) released its first set of interim results, but said investors should instead consider the “transformational nature” of the work which is not yet on its income statement or balance sheet.

In the first six months of 2022, the fintech group which operates through subsidiaries Innovative Finance and Epsion Capital, generated £58,000 in revenue, compared to £772,000 in the previous 12 months to December 2021, accounts alone of the previous period prepared in accordance with IFRS.

A pre-tax loss of £506,000 was reported for the half year compared to £98,000 last year.

But already in the second half of the year, as reported earlier this month, the company generated £1m in revenue from fees collected by Innovative and Epsion on transactions and related corporate activities.

Chairman Dominic White said the fees did not appear in the half-year figures, despite the “tremendous vital work” in the period leading up to them, but “the simple fact that it was success prevented them”.

White said the silver lining was that Eight Capital knew that 2022 revenues already exceeded the previous year by at least 50%, for which he praised the work of the group’s two operating subsidiaries.

“While the broader markets are challenging, Innovative and Epsion continue to develop an exciting pipeline of deals that include fintech acquisition opportunities for Eight Capital and third-party deals,” he said.

White said the “most significant” aspect for the future development of the group is the progress of its balance sheet, with a circular to be sent to shareholders shortly asking for a waiver of city code obligations on repossessions and mergers to allow some existing debt to be converted into company equity.

“It will open the door to creating a much bigger and stronger balance sheet and a business that we believe will quickly become much more attractive to investors,” White said.

“We want to be, and hope to become, a significant player in our sphere as fintech enablers and service providers.”

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