eServGlobal Limited eServGlobal outlook and business update (1269T)
10 Ottobre 2017 - 8:00AM
UK Regulatory
TIDMESG
RNS Number : 1269T
eServGlobal Limited
10 October 2017
eServGlobal Limited (eServGlobal or the "Company")
eServGlobal outlook and business update
Paris: 10 October 2017
eServGlobal (LSE: ESG.L & ASX: ESV.AX), a pioneering digital
transactions technology company, provides an update on HomeSend,
its joint venture with Mastercard and BICS, as well as an update on
current trading within the core digital financial transactions
business.
HomeSend is showing strong momentum in its expanded focus on the
banking market with further agreements expected. Mastercard,
through Mastercard Send and HomeSend, offers a solution to the
challenges experience by banks in cross-border payments. The recent
announcement of ten bank agreements over the past year has
reinforced HomeSend's strong position to expand in the bank
market.
Advanced discussions, including implementation discussions, are
in progress with a number of large banks.
The Board of eServGlobal understands that precise planning of
short and medium-term volume expansion is difficult to predict, but
is satisfied that momentum of existing and imminently-expected
agreements supports the required financial growth of HomeSend over
the next few years.
The core business expects to finally achieve operational EBITDA
breakeven in the quarter to December 2017, however it will not be
able to recognise enough revenue to recover from the disappointing
first half of the year. As a result, the Board of eServGlobal
expects a lower revenue range for the 14-month year than previously
advised, in the range of EUR9.7 to EUR11.0m. Encouragingly, orders
in the year are expected to be in the range of EUR11.0m to
EUR15.0m, which will build a positive momentum of backlog and WIP
going into 2018 against a significantly reduced cost base over
previous years.
During the year, eSG has thoroughly reviewed its market and
commercial model. We have been very pleased with the level of
interest in our next generation mobile financial services recharge
platform provided within Paymobile 3. This recharge capability has
been the cornerstone of our business for the last 10 years and
continues to represent a significant part of our value to existing
customers.
The core business is already addressing a final right size,
having previously driven out a lot of complexity and poor
commercial arrangements. It is forecasting an operational EBITDA
breakeven result for the December 2017 quarter and plans to enter
the 2018 financial year with a breakeven point of EUR12m in annual
revenues. This will be covered by an expected EUR2m of deferred
revenue from 2017, an expected EUR5m of recurring revenue from
existing customers and a targeted EUR5m of changes and upgrades
from these existing customers.
The Board will look to maximise the value of the core business
in the medium term, as it proves itself as a self-sustaining
standalone business.
John Conoley, eServGlobal Executive Chairman, said, "This is the
most exciting period in my time with eServGlobal. It would be an
understatement to say that our investors have been patient,
particularly with the core business. I am delighted that we are on
the verge of delivering a satisfactory and very capable core
business. We believe that following completion of cost reduction
plans, the core business will be self-sustaining next year on a
stand-alone basis. This will be following an expected operational
EBITDA breakeven in the last quarter of 2017. At the same time,
HomeSend is beginning to realise the expectations that eServGlobal
and our investors have placed in it. It has a colossal market to go
for and its traction in that market is building rapidly."
About eServGlobal
eServGlobal (AIM:ESG, ASX:ESV) is a pioneering digital financial
transactions technology company, enabling financial and
telecommunications service providers to create smoother
transactions for their customers through deep technical expertise
and rapid implementation. Built on the latest technology platforms,
eServGlobal offers a range of transaction services including
digital wallets, commerce, remittance, recharge, rapid service
connection and business analytics. eServGlobal combines more than
30 years' experience, with an agile, future-focused mindset, to
align with the requirements of customers and partners around the
globe.
Together with MasterCard and BICS, eServGlobal is a joint
venture partner of the HomeSend global payment hub, enabling
cross-border transfer between bank accounts, cards, mobile wallets,
or cash outlets from anywhere in the world.
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary investors@eservglobal.com
Alison Cheek, VP Corporate Communications
finnCap Limited (Nomad and Broker) www.finnCap.com
Corporate Finance T: +44 (0) 20 7220
Jonny Franklin-Adams / Anthony 0500
Adams / Hannah Boros
Corporate Broking
Tim Redfern/ Richard Chambers
Alma PR (Financial Public Relations) www.almapr.co.uk
Hilary Buchanan / John Coles T: +44 (0) 208 004
4218
This information is provided by RNS
The company news service from the London Stock Exchange
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