TIDMTUNG
RNS Number : 4132T
Tungsten Corporation PLC
20 July 2020
20 July 2020
TUNGSTEN CORPORATION PLC
("Tungsten" or the "Company")
TRADING UPDATE FOR FINANCIAL YEAR ENDED 30 APRIL 2020
Tungsten Corporation plc (AIM: TUNG), a leading provider of
digital financial management products and software solutions,
issues the following trading update ahead of the announcement on 7
September 2020 of its full-year results for the year ended 30 April
2020.
-- Group revenue grew 2% to GBP36.8 million; excluding Tungsten
Network Finance(1) (TNF), revenue grew 3% to GBP36.3 million
-- 93% of revenue was repeatable and recurring, up from 92% in FY19
-- Net cash(2) of GBP3.2m compares with GBP1.0 million reported
at the half year. Positive full year cash generation of GBP0.4
million driven by strong working capital management
-- Adjusted EBITDA(3) for FY20 expected to be broadly in line with market guidance
-- New sales billings(4) of GBP4.0 million were flat to prior
year, although the second half run rate accelerated by 35%
following our investments to strengthen our sales capabilities
-- Resilient response to COVID-19 global pandemic
-- Successful wind down of the TNF portfolio in June 2020, in line with market expectations
We have broadened our range of partnerships in the last 4 months
as we expand our sales routes to market and approach:
-- In July we concluded our largest ever single partnership
agreement with a leading US bank. This has the potential to deliver
e-invoicing volumes of up to 2.5 million invoices from up to 28 new
AP buyers, who in turn will release up to 40,000 new AP suppliers
onto our platform. This could significantly expand our active AP
buyer portfolio
-- In April we completed a successful technical integration with
Coupa Software Inc.'s CoupaLink platform; we are now fully
certified as a CoupaLink e-invoicing partner
-- Our exclusive supply chain finance partnership with Orbian
has now become revenue generating following an agreement with a
major UK retailer to access their supplier base
We further strengthened the executive team with the appointment
of a new Chief Financial Officer, Chief Commercial Officer and
Chief Sales Officer. In addition, Nick Wells, Co-Head of Corporate
Finance at Cenkos Securities, joined the Board as a Non-Executive
Director.
Update on COVID-19
Tungsten has had a resilient response to the COVID-19 global
pandemic, sustaining a 5% transaction volume increase over FY20. In
March, we disclosed that we had been contacted by a number large
buyers who were looking to increase their electronic invoice
volumes as part of their response to the pandemic. These inquiries
led to an increase in volumes for some of these buyers in March and
early April, although we have subsequently seen a reduction in
overall run rates over the last 3 months of lockdown. In June our
run rate has recovered closer to the pre-COVID-19 volumes, and
assuming this trend continues, our expectation is that invoice
volumes will recover to normalised run rates by the end of the
first half of the year. We remain comfortable with external
forecasts for FY21 on the basis that transaction run rates recover
in line with our expectations.
Whilst any future impact from COVID-19 remains highly uncertain,
our business model remains resilient. We have traded profitably in
the first 2 months of the new financial year and continue to manage
cashflow carefully. As a precautionary measure, on 25 March 2020 we
drew down on a further GBP1.0 million of our RCF, although this
additional drawdown has, so far, been unutilised. We have a further
GBP2.0 million of undrawn committed RCF availability.
Andrew Lemonofides, Chief Executive Officer of Tungsten
Corporation plc, said:
"In this year of transformation for Tungsten, we have delivered
a resilient performance in response to a challenging business
environment. Our continued focus on sales execution has driven good
billing momentum in the second half, as we have invested in
building out our capabilities and delivering on our strategic
objectives. We maintained strong expense management and achieved
positive cash generation, which positions the business well for
future growth.
"Trading in the beginning of the new financial year has been
positive despite transaction run rates being impacted by COVID-19.
We remain confident in the structural, long-term, growth
opportunity in the e-invoicing market and in Tungsten's leading
position within it.
"Finally, we thank all our customers, suppliers and employees
for their dedication and commitment in what has been a challenging
year".
1 Tungsten announced its intention to divest Tungsten Network
Finance, its legacy trade finance division, ("TNF") on 30 April
2019
2 Net cash is calculated as cash and cash equivalents on the
balance sheet less drawings under the HSBC Revolving Credit
Facility
3 Adjusted EBITDA is defined as operating profit before other
income, depreciation, amortisation, gain or loss on sale, foreign
exchange gain or loss, share-based payments charge and exceptional
items
4 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
Chris Allen, Chief Financial Officer +44 20 7280 6980
Canaccord Genuity Ltd (Nominated Advisor
& Broker)
Simon Bridges
Andrew Potts +44 20 7523 8000
Tavistock Communications Financial PR
& IR
Heather Armstrong
Jos Simson
Katie Hopkins +44 20 7920 3150
About Tungsten Corporation plc
Tungsten Corporation (LSE: TUNG) is the world's largest,
compliant business transaction network. A leading global electronic
invoicing and purchase order transactions network, Tungsten's
mission is centred on enabling a touchless invoice process allowing
businesses around the globe to gain maximum value from their
invoice process.
Tungsten processes invoices for 74% of the FTSE 100 and 71% of
the Fortune 500. It enables suppliers to submit tax compliant
e-invoices in 50 countries, and last year processed transactions
worth GBP195bn for organisations such as Caesars Entertainment,
Computacenter, GlaxoSmithKline, Kraft Foods, Mohawk Industries,
Mondelēz International, Procter & Gamble, Shaw Industries,
Unilever and the US Federal Government.
Founded in 2000 and headquartered in London, Tungsten has
offices in the US, Bulgaria and Malaysia, employing over 300
people.
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.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
This information is provided by RNS, the news service of the
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END
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