TIDMTUNG
RNS Number : 5096F
Tungsten Corporation PLC
10 March 2020
TUNGSTEN CORPORATION PLC
("Tungsten" or the "Company")
10 March 2020
TRADING UPDATE FOR THE NINE MONTHSED 31 JANUARY 2020
GBPm (1) Group results Group results (excluding
TNF)(2)
(including TNF)
Unaudited YTD Q3-FY20 YTD Q3-FY19 YTD Q3-FY20 YTD Q3-FY19
------------------------ ------------ ------------ ------------- ------------
Revenue 27.6 26.9 27.1 26.4
Adjusted EBITDA(3) 2.0 0.2 2.8 1.8
Adjusted EBITDA
margin (4) 7% 1% 10% 7%
Operating (loss)
/ profit (3.2) (2.5) (1.6) (0.5)
Net cash(5) 1.0 2.5 1.0 2.5
Transaction volumes(6) 14.4m 13.5m 14.4m 13.5m
------------------------ ------------ ------------ ------------- ------------
May 2019 to January 2020 ("YTD Q3-FY20") Unaudited Financial
Highlights (excluding TNF):
-- YTD Q3-FY20 revenue grew 3% to GBP27.1 million from GBP26.4 million in YTD Q3-FY19.
-- YTD Q3-FY20 adjusted EBITDA grew 56% to GBP2.8 million from GBP1.8 million in YTD Q3-FY19.
-- Adjusted EBITDA margin grew from 7% to 10%.
-- Improved adjusted EBITDA performance resulted from:
o Increased sales revenue in the period of GBP0.7 million;
o Improved collection of overdue receivables added a further
GBP0.5 million;
o Embedded structural cost reductions across a number of
departments of GBP0.5 million. These three significant improvements
were partially offset by one-off changes to the bonus policy
provisions YTD Q3-FY19.
-- YTD Q3-FY20 recurring and repeatable revenue (7) grew 6% to
GBP25.4 million (YTD Q3-FY19: GBP23.9 million), representing 94% of
total revenues (91% of total revenues YTD Q3-FY19).
-- YTD Q3-FY20 one-off revenue declined by GBP0.7 million to
GBP1.7 million (YTD Q3-FY19: GBP2.5 million) due to one-off set up
fees in YTD Q3-FY19 connecting customer invoices to the Italian tax
authority (due to regulation changes) and a reduction in workflow
license sales.
-- Net cash of GBP1.0 million remains flat against the half year
reported level and is expected to increase further by the
year-end.
-- YTD Q3-FY20 new sales billings (NSB)(8) of GBP2.9 million
compared to GBP3.4 million in YTD Q3-FY19
-- Q3-FY20 revenue grew 1% to GBP9.3 million from GBP9.2 million in Q3-FY19.
May 2019 to January 2020 operational highlights:
-- Transaction volumes grew 7% to 14.4 million from 13.5 million in YTD Q3-FY19.
-- We have signed three new Total AP deals with three global multinationals.
-- Our transformation to a sustainably profitable e-invoicing
enterprise remains firmly on track.
We are well positioned to meet out four major new strategic
goals:
o Driving the network effect: Introducing Total AR. We have
signed one further Total AR deal bringing the total to 3 global
vendors invoicing 61 countries.
o Strategic partnerships with e-procurement providers: This
provides an additional channel to market. We remain on track to
sign two major partnerships with leading P2P providers which will
allow Tungsten Network to provide e-invoicing as part of a joint
overall procure-to-pay offer.
o Interconnecting with other leading e-invoice platforms: This
will improve scale and reach for our customers and in turn boost
our turnover, volume and income. We have completed the required
technical integration with a major P2P provider and aim to achieve
full connection with their network and agreeing commercial terms by
the end of calendar Q2 2020.
o Trade Finance: Our new exclusive partnership with Orbian has
been successfully launched this week, with market proven supply
chain finance products ready to rollout across our new proprietary
technology platform.
Our winddown of TNF remains on track, with the successful
collection of the majority of outstanding funding contracts
completed.
Other
-- As previously announced, David Williams and Duncan
Goldie-Morrison have stepped down from the board
effective 28 February 2020. We expect to announce the replacements for both roles imminently.
Andrew Lemonofides, Chief Executive Officer
"In this year of transformation, we are demonstrating our
ability to reduce costs and accelerate revenue. I am pleased to
highlight that all of our strategic initiatives are being delivered
as mentioned above and forecast last summer. In addition, I am
continuing to restructure the company, drive down costs, re-boot
our technology, replace key staff, introduce new products and
augment new partnerships - and so build a redefined Tungsten in
pole position to deliver accelerating growth.
Revenues remain in line with our YTD Q3-FY20 expectations.
Whilst we still expect to show year on year growth in new sales
billings, the growth will be below the level that we had previously
expected and as a result we are a little more cautious about the
outturn for the full year. However, as a result of prudent cost
controls, we currently expect to meet EBITDA expectations."
(1) Tungsten's year-end is 30 April
(2) Tungsten is winding down the business and operations of
Tungsten Network Finance ("TNF"). Results presented exclude TNF and
present the continuing business to aid future comparability. Group
results including and excluding TNF are presented exclusive of
management fees charged by the Group to TNF
(3) Adjusted EBITDA is calculated as earnings before net finance
cost, tax, depreciation and amortisation, impairment of intangible
assets, foreign exchange gain or loss, share based payment expense
and exceptional items, and is adjusted to include cash rental
expenses and rental income
(4) Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue
(5) Net cash is calculated as cash and cash equivalents less drawings under the HSBC RCF
(6) Transaction volumes are measured as the total number of
invoices and purchase orders delivered between a Supplier and
Buyer
(7) Recurring revenue represents annual subscription and
maintenance fees on contracts typically ranging from 1 to 3 years
and billed annually in advance. Repeatable revenue represents
transaction-based fees from contracted customers, typically billed
at the point of usage or at the end of the month of usage
(8) New sales billings represents implementation, subscription,
licence, transaction and professional services fees to be billed in
the period from new sales made in that period. Implementation and
subscription fees are recognised to revenue over the 6 months and
12 months respectively from billing month. Subscription licence and
transaction fees are recognised in the month sold. Professional
services fees are recognised on work completion milestones
Enquiries
Tungsten Corporation plc
Andrew Lemonofides, Chief Executive
Officer +44 20 7280 6980
Panmure Gordon UK Limited (Nominated
Adviser)
Dominic Morley +44 20 7886 2500
Canaccord Genuity Limited (Broker)
Simon Bridges/ Andrew Potts +44 20 7523 8000
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
About Tungsten Corporation plc
Tungsten Corporation (LSE: TUNG) aims to be the leading global
electronic invoicing and purchase order transactions network.
Digital invoicing processes enable large businesses to reduce
costs and effectively manage their businesses. They can improve
business agility by creating scalable and repeatable growth
processes, managing their cash effectively and making better
decisions based on a comprehensive analysis of their data.
Tungsten Network processes invoices for 74 percent of the FTSE
100 and 71 percent of the Fortune 500. It enables suppliers to
submit tax compliant e-invoices in 50 countries, and last year
processed transactions worth over GBP173bn for organisations such
as Caesars Entertainment, Computacenter, GlaxoSmithKline, Kraft
Foods, Mohawk Industries, Mondelēz International, Procter &
Gamble, Shaw Industries, Unilever and the US Federal
Government.
Forward looking statements
This document contains forward-looking statements that may or
may not prove accurate. For example, statements regarding expected
revenue growth and trading margins, market trends and our product
pipeline are forward-looking statements. Phrases such as "aim",
"plan", "intend", "anticipate", "well-placed", "believe",
"estimate", "expect", "target", "consider" and similar expressions
are generally intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual
results to differ materially from what is expressed or implied by
the statements. Any forward-looking statement is based on
information available to Tungsten as of the date of this statement.
All written or oral forward-looking statements attributable to
Tungsten are qualified by this caution. Tungsten does not undertake
any obligation to update or revise any forward-looking statement to
reflect any change in circumstances or in Tungsten's
expectations
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END
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