Cornerstone FS PLC (LON:CSFS) said it is “confident of delivering revenue growth for full year 2021” as the group recovered from the impact of the Coronavirus pandemic.
In a trading update for the six months to June 30, the provider of cloud-based international payment, currency risk management and electronic account services to SMEs said trading volumes had increased in the period following a contraction in the second half of 2020.
READ: Cornerstone FS sees customer base rise to more than 810 from 732 in 2021
As a result, Cornerstone said it expects to report 6% revenue growth to £837,000 in the first half, representing a near-return to pre-pandemic levels.
The group highlighted significant revenue increases from clients it serves directly, which accounted for 28% of total revenue compared with 12% for both the first and second halves of 2020. Cornerstone said this greater contribution is expected to result in a “substantial improvement” in gross margin to around 38% in the first half, a five percentage point increase sequentially and an 11 percentage point increase compared with the first half of 2020.
The margin improvement enabled the group to achieve growth in gross profit compared with both the sequential period and the first half of the prior year, however, this was offset by increased administration expenses associated with the company's IPO in April.
Looking ahead, Cornerstone said it was confident of delivering full-year revenue growth and that it also expects to deliver “further significant gross margin improvement in future periods” as it executed its acquisitive growth strategy and increased its proportion of direct sales.