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Tungsten Corp encouraged by gathering momentum

In the financial year (FY) just ended, Tungsten financed invoices for 79 suppliers totalling over £100mln. This compared with £32mln for 38 suppliers in FY15.

Sterling. Tugsten runs a leading electronic invoicing network.
Tungsten processed 16.1 million invoices in fiscal 2016, an increase of 9% from the prior year

The cash position at Tungsten Corporation PLC (LON:TUNG) is ahead of management’s expectations as the e-invoicing specialist targets becoming cash flow positive this fiscal year.

Cash at the end of April stood at £9.1mln (excluding cash in Tungsten Bank), which was £1.1mln more than the board had expected, and represents an average monthly net cash outflow of £1.1mln during the second half of the financial year.

In a pre-close trading update for the financial year to 30 April 2016 (FY16), the company said revenues for FY16 are expected to exceed £26mln, broadly in line with guidance issued to the market back in February of this year.

Revenues will be up at least 12.5% year-on-year but would have been higher still had it not been for some new buyer contracts taking longer to close than expected.

As previously indicated, underlying losses (LBITDA) for the year just ended are expected to be less than £15mln, excluding one-off items, or less than £19mln with those one-off items factored in.

"Tungsten's performance during FY16 demonstrates the group's encouraging momentum. I am confident we are on track to execute the operational goals we expect to accelerate our achievement of profitable growth,” said Rick Hurwitz, chief executive officer of Tungsten.

“We have improved existing contract pricing, engaged new buyers, reduced our cost base and recruited talented executives. We start the new financial year with a clear strategic plan and a focus on developing deep customer relationships and improved operational performance," he added.

The proposed sale of Tungsten Bank is still expected to complete in the first half of the current financial year, but in the unlikely event that it does not, the board intends to deregulate the bank in order to access the £25mln of capital on its balance sheet.

Quick facts: Tungsten Corp PLC

Price: 41.75 GBX

AIM:TUNG
Market: AIM
Market Cap: £52.64 m
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