MoneyHero Limited — FY2023 Form 20-F
Reporting period: Year ended December 31, 2023; this is an annual report, not a standalone Q4 report. Filed April 29, 2024. Financial statements are audited and prepared under IFRS. Nasdaq trading began in October 2023.
Business context
MoneyHero operates online financial comparison platforms, insurance brokerage services and Creatory, a network-based marketing business, across Singapore, Hong Kong, Taiwan, the Philippines and Malaysia. It earns most revenue from financial institutions, primarily through fees tied to clicks, leads, applications or approved applications. Credit cards remained the largest product vertical; about 90% of 2023 revenue was based on approved applications.
Financial and operating performance
| Metric (US$ millions, except percentages) | FY2023 | FY2022 |
|---|---|---|
| Revenue | 80.7 | 68.1 |
| Operating loss | (30.0) | (41.0) |
| Loss for the year | (172.6) | (49.4) |
| Adjusted EBITDA (non-IFRS) | (6.8) | (15.6) |
| Adjusted EBITDA margin (non-IFRS) | (8.5%) | (23.0%) |
| Operating cash flow | (17.0) | (14.6) |
| Cash and cash equivalents at year-end | 68.6 | 24.1 |
- Revenue rose 18.4%. Growth was led by Singapore and insurance; insurance revenue increased 120% year over year. Revenue mix was 74.7% credit cards, 12.6% personal loans and mortgages, and 7.3% insurance.
- Cost of revenue increased 29.7% to $43.9 million, mainly from higher user reward costs and channel-partner fees. Derived gross margin decreased to about 45.5% from 50.3%.
- Operating loss narrowed, while the reported net loss widened substantially. FY2023 included a $67.0 million non-cash share-based listing expense, $57.3 million of fair-value losses on financial instruments and $19.0 million of finance costs. These items materially affected reported earnings.
- Adjusted EBITDA remained negative but improved from the prior year. It is a company-defined non-IFRS measure; the filing cautions it should not replace IFRS results or cash-flow analysis.
- Cash increased mainly from financing, including $91.5 million of net proceeds from the business combination, partly offset by loan-note settlements. Operating and investing activities used $17.0 million and $1.3 million, respectively.
- At year-end, current assets were $106.9 million and current liabilities $35.7 million, with net current assets of $71.2 million. Total liabilities were $36.0 million. Interest-bearing borrowings and loan notes had been fully settled; lease liabilities were about $0.6 million. Accounts receivable rose to $17.2 million and contract assets to $16.0 million.
Material changes and business trends
- Singapore revenue grew to $32.1 million and the Philippines to $14.2 million. Taiwan revenue fell to $6.7 million from $11.0 million; management cited suspended product offerings by certain key clients. Hong Kong generated $26.9 million, or 33.4% of revenue, and held approximately 59.5% of assets.
- Applications increased to 1.7 million from 1.3 million; approved applications rose to 636,000 from 397,000. Monthly unique users increased to 8.7 million from 7.8 million.
- Creatory’s share of revenue increased to 17.0% from 13.7%. The company ceased Thailand operations in 2022.
- Management said cost-optimization actions begun in 2022 contributed to the improvement in adjusted EBITDA. It also described renewed emphasis on revenue growth and market-share expansion.
Outlook, risks and unusual items
- The filing gives no quantified revenue, earnings or margin guidance. Management stated that available cash and business-combination proceeds were expected to fund working capital and capital expenditure for at least 12 months from the report date. This is a management assessment, not a guarantee.
- Liquidity depends on continued cash management and could be affected by operating cash burn or inability to raise additional capital. Potential warrant proceeds are uncertain; management noted warrant exercise was unlikely while the share price was below the exercise price.
- Revenue is concentrated by product and partner: credit cards accounted for 74.7% of revenue, and Citibank-affiliated entities contributed approximately 22%. Most revenue is success-based and depends on partner approval rates and user conversion.
- Hong Kong exposure is material, including political, regulatory, data-protection and possible future PRC oversight or fund-transfer risks. The auditor is Hong Kong-based; the PCAOB could inspect it at the report date, but future inspection access is uncertain.
- Management concluded disclosure controls and procedures were ineffective at December 31, 2023. Two material weaknesses were identified: insufficient IFRS/SEC reporting expertise and inadequate financial-reporting policies and procedures. Remediation was underway; the auditor did not attest to internal-control effectiveness.
- Other significant risks include persistent losses, competition, reliance on search-engine traffic and AWS, cybersecurity and privacy exposure, foreign-exchange movements (the group does not hedge), licensing and regulatory compliance, and potential dilution and concentrated voting control. The company reported no material legal proceedings or material off-balance-sheet arrangements.
- No cash dividends had been paid, and none were expected in the foreseeable future. The filing reported no clear specific financial forecast beyond the liquidity statement above.
Most important facts for investors to verify
- Whether operating cash burn and working-capital needs remain consistent with management’s stated liquidity runway; distinguish cash raised in the business combination from cash generated by operations.
- Whether the adjusted EBITDA improvement continues and how much depends on exclusions, while gross margin has contracted.
- Whether revenue and approved-application growth can be sustained without excessive reward costs, and whether credit-card and major-partner concentration declines.
- Progress in remediating the two material weaknesses and ineffective disclosure controls, including any subsequent management or auditor findings.
- Current status of the TransUnion credit-report arrangement, regional licensing, and any developments affecting Hong Kong operations, auditor inspection access or cross-border cash transfers.
- Current share count, warrant overhang and voting control. The filing reported 78.3% of voting power held by the Sponsor as of March 31, 2024.