zlb
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Post by zlb on Oct 9, 2019 9:24:21 GMT
So the latest accounts are online for Zopa and Zopa Group. One quote from the group one: "during the year £50m of additional equity was raised which more than offset the loss for the year". Or, the group revenue is down due to the closure of the safeguard fund, apparently.
I'm not an accountant apart from understanding that (£1000) = negative value. Does the financial health of Zopa Ltd or Zopa Group Ltd have any implications for lenders in a downturn? Does it help prevent platform collapse??
Does equity really mean that they are in profit (they state this somewhere)?
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aju
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Post by aju on Oct 9, 2019 12:52:21 GMT
There are actually 3 parts to the zopa reports as follows Zopa Group LimitedZopa Bank Limited (Formerly zopa financial Services Limited)Zopa LimitedThese links point at the beta companies house site the main report document is the full accounts made up to 31 december 2018 and is a pdf document - sadly its a scanned document so not easily searchable and they are >40 pages long. Not sure I understand the half of it but someone might and there are directors and other reports in the docuements. Sorry but the original links to the documents were time limited and not persistant so they ran out after I had started to read them. The new links should hold though for anyone who cares to read. I have access to CompanyCheck which provides charts and easier to read stuff etc but sadly these reports and chart updates have not yet made it to that site. I tried to map the net worth stuff etc over from the reports to compare against what I can see on Companycheck but I gave up as not my area of expertise. Im a s/w person not an accountant!. |
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Post by optymystic on Oct 9, 2019 13:17:04 GMT
I'll leave scrutiny of the accounts to the competent but the closure of the safeguard fund ought to bring about a reduction in costs, the costs of the fund, not revenues. If the revenues from the safeguarding fund exceeded the costs it could have been an earner, but not for the other party.
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Post by propman on Oct 9, 2019 16:09:24 GMT
ISTM that the full fee for the safeguard as well as the amount due to Zopa for their own benefit has been classified as "Revenue" with the contribution to SG then taken out as a "Cost of Sale". That is why both have declined together.
The biggest red flag to me is a note in the Bank Audit Report about uncertainty that they are a going concern. This must mean that the Parent Cpompany has not agreed to meet their debts. As a result, if they fail to raise sufficient funds to cover the losses while they build a self-sustaining business, it may go bust. This would mean the loan to Zopa Ltd would go unpaid. In addition, a significant amount of Zopa Ltd's income is from the bank so it would need to downsize to survive without the Bank. Finally, Zopa Ltd only broke even due to selling intangibles to the Bank. Presumably this is one-off, so its ongoing profitability is uncertain and hence its viability in the absence of investor appetite to provide further funds.
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zlb
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Post by zlb on Oct 9, 2019 17:09:12 GMT
There are actually 3 parts to the zopa reports as follows Zopa Group LimitedZopa Bank Limited (Formerly zopa financial Services Limited)Zopa LimitedThese links point at the beta companies house site the main report document is the full accounts made up to 31 december 2018 and is a pdf document - sadly its a scanned document so not easily searchable and they are >40 pages long. Not sure I understand the half of it but someone might and there are directors and other reports in the docuements. Sorry but the original links to the documents were time limited and not persistant so they ran out after I had started to read them. The new links should hold though for anyone who cares to read. I have access to CompanyCheck which provides charts and easier to read stuff etc but sadly these reports and chart updates have not yet made it to that site. I tried to map the net worth stuff etc over from the reports to compare against what I can see on Companycheck but I gave up as not my area of expertise. Im a s/w person not an accountant!. I didn't mention the bank one as I imagine that it's not financially connected with Zopa Ltd, whereas Zopa group ltd may bear some relationship that I don't know about.
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aju
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Post by aju on Oct 9, 2019 17:11:49 GMT
Yeah I did wonder about that but hey nothing like having all the info if anyone want to take up the mantle and explain it all. They are all at the same address but it was not clear and I got bored reading the docs and not really understanding so I just provided all. Its in the public domain - well its at least available without logging in.
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Post by propman on Oct 10, 2019 9:02:06 GMT
THere are loans between Zopa Ltd and Zopa Bank. If the bank is liquidated Zopa Ltd will need to repay what it owes the Bank and, if the Bank is insolvent after paying the not inconsiderable costs of a disorderly liquidation then Zopa Ltd will not be able to recover all of the funds it has lent the Bank (as these are unlikely to be in FSCS protected accounts). In addition, the Holding Company has invested alot in the Bank and so may well supply additional funding to the Bank prior to the insolvency in the hope of keeping it going, this would extract funds otherwise available for Zopa Ltd.
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Post by optymystic on Oct 10, 2019 10:02:51 GMT
"If the bank is liquidated Zopa Ltd will need to repay what it owes the Bank and, if the Bank is insolvent after paying the not inconsiderable costs of a disorderly liquidation then Zopa Ltd will not be able to recover all of the funds it has lent the Bank."
Do you really mean that Zopa Ltd. is not permitted to offset debts owed to it by the bank against debts it owes to the bank?
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benaj
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Post by benaj on Oct 10, 2019 10:07:05 GMT
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aju
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Post by aju on Oct 10, 2019 11:24:39 GMT
THere are loans between Zopa Ltd and Zopa Bank. If the bank is liquidated Zopa Ltd will need to repay what it owes the Bank and, if the Bank is insolvent after paying the not inconsiderable costs of a disorderly liquidation then Zopa Ltd will not be able to recover all of the funds it has lent the Bank (as these are unlikely to be in FSCS protected accounts). In addition, the Holding Company has invested alot in the Bank and so may well supply additional funding to the Bank prior to the insolvency in the hope of keeping it going, this would extract funds otherwise available for Zopa Ltd. So are we saying here that I have money I put into ZOPA as a lender and some of this may have been used to supply loans to Zopa Bank I'm not sure that is what you mean but just checking. Please be gentle I'm only a poor retired S/W designer and developer not a finance wizard. 
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Post by propman on Oct 10, 2019 14:54:26 GMT
"If the bank is liquidated Zopa Ltd will need to repay what it owes the Bank and, if the Bank is insolvent after paying the not inconsiderable costs of a disorderly liquidation then Zopa Ltd will not be able to recover all of the funds it has lent the Bank."
Do you really mean that Zopa Ltd. is not permitted to offset debts owed to it by the bank against debts it owes to the bank?
This would depend upon the terms of the loan provided by Zopa Ltd, but in my experience such lending is usually poorly documented and third party lending to a bank only usually has such a provision in specific "back to back" arrangements.
As anyone who has become involved with a company in insolvent liquidation will have found out, anyone owing them money has to abide by their agreements or have them enforced in the courts (liquidators have a statutory duty to collect all amounts owing to the company tey are acting for), but payment of anything they owe cannot be enforced and is repaid according to the priorities defined by law.
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Post by propman on Oct 10, 2019 15:09:18 GMT
THere are loans between Zopa Ltd and Zopa Bank. If the bank is liquidated Zopa Ltd will need to repay what it owes the Bank and, if the Bank is insolvent after paying the not inconsiderable costs of a disorderly liquidation then Zopa Ltd will not be able to recover all of the funds it has lent the Bank (as these are unlikely to be in FSCS protected accounts). In addition, the Holding Company has invested alot in the Bank and so may well supply additional funding to the Bank prior to the insolvency in the hope of keeping it going, this would extract funds otherwise available for Zopa Ltd. So are we saying here that I have money I put into ZOPA as a lender and some of this may have been used to supply loans to Zopa Bank I'm not sure that is what you mean but just checking. Please be gentle I'm only a poor retired S/W designer and developer not a finance wizard. I was refering to the investors into Zopa (VCs and the like). As investors in loans arranged by Zopa we should have a right to the proceeds from our share in those loans. It is possible that there may be some right for admin fees to be levied by the administrator (haven't seen the terms recently). but in some liquidations it turns out that there has been a mixing of funds that should have been kept bankrupcy remote but weren't. Typically transactions in transit (eg banks refusing to honour payments to borrowers due to breach of their arrangement with Zopa and funds due to them.). But there was a real bun fight with Lemans & others leading to great uncertainty and funds being frozen for some time. What it comes down to is that if a platform goes belly up, it can cost investors if the platform have not done things according to FSA rules. The Directors may be prosecuted or forbidden from being directors or Authorised Individuals, but that is small comfort for those out of pocket. So as in many things it comes down to our trust in the orgaanisation and enforcement by their regulators.
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