Proactive Investors - Run By Investors For Investors

Tungsten sells bank, talks turnaround after losses

One casualty of the new CEO's review has been Tungsten’s banking ambitions
Tungsten sells bank, talks turnaround after losses
The volume of e-Invoice volumes rose 10% to 7.5mln

-- adds line on bank sale, share price --

Corporate invoice specialist Tungsten (LON:TUNG) remained upbeat on its future despite soaring losses and the scrapping of plans to set itself up as a bank.

The e-invoice group has agreed to sell its bank subject to UK regulatory approval for approximately £30mln in cash, reflecting net assets of £25.4m plus a premium.

Nick Parker, chairman, said: "Tungsten is making progress, achieving strong revenue growth and concluding encouraging customer renewal agreements, even as it resets expectations about the trajectory of its opportunity.” 

Losses in the six months to October jumped to £17.8mln (£14.5mln) including a £6.8mln write-down for the bank.

The deficit was more than revenues, which rose to £13.1mln (£10.2mln) though underlying losses dropped to £9.5mln (£13.2mln).

The volume of e-invoice volumes rose 10% to 7.5mln (6.8mln) with 14% increase in e-invoice value to £55.9bn (£48.9bn).

Rick Hurwitz, who took over as chief executive in July, said he had reviewed all of aspects of the business and identified the areas it had to tackle to improve the group’s performance.

One casualty of that review has been Tungsten’s banking ambitions.

Operating a regulated deposit-taking bank is incompatible with the pursuit of profitable growth from the foreseeable invoice financing opportunity, he said.

He forecast Tungsten would achieve break-even on an underlying profit [EBITDA] basis by the end of its 2016-2017 financial year (18 months) and generate positive underlying earnings two years from now.

In the current year, to next April, revenues will be around £27.5mln and underlying losses no more than £19mln or £15mln on an underlying basis.

Cash holdings were £39.7mln, of which £25.4mln was within Tungsten Bank. The bank’s sale is expected to take between 6-12 months.

Shares fell 5% to 39p.

View full TUNG profile View Profile

Tungsten Corp PLC Timeline

February 18 2016
February 09 2016
September 02 2015

Related Articles

October 18 2018
Managed services revenue jumped 52% in the first half of 2018 with the order book standing at £2.4mln.
April 15 2019
Corero Network Security PLC specialises in cyber-security software
Background check
May 13 2019
The company provides background check and medical screening solutions for employers to give them reliable information when hiring new staff.

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use