14th May 2015 10:40
LONDON (Alliance News) - Tungsten Corporation PLC Thursday said it expects the loss in its recently-ended financial year to be narrower than the market expects and revenue to be higher than expectations, as its Network continued to add new buyers and suppliers and its fledgling banking operations made a "promising start".
The electronic invoicing, analytics and financing company also reshuffled its management, with Chief Executive Edmund Truell moving up to the newly created role of vice chairman and the head of its Americas business Richard Hurwitz. The move will allow Truell to develop the strategic opportunities available to the company, including enhancing relationships with major clients, providers of capital and strategic partners.
In a trading update, the company said revenue in the second half of the year that ended April 30 were higher than expected, driven by the accelerating addition of new buyers and suppliers to the Tungsten Network. It therefore expects revenue for the year as a whole to be ahead of market expectations of GBP22.5 million. Combined with lower-than-forecast costs in the second half, it expects its loss for the year to be lower than the market's expectation of GBP31.2 million.
The Network business, which offers e-invoicing, invoice finance and spend analytics to clients including Tesco, Unilever, GlaxoSmithKline, Aviva, BP, DHL, General Motors and Kellog's, had 173 buyer groups as of April 30, up from 124 a year earlier. It also added 28,000 suppliers to the network, while 18,000 mostly paper invoice suppliers ceased transactions as the company focused on e-invoicing. E-Invoicing volume grew 10% to 13.8 million invoices out of a total of 14.8 million invoices transacted over the network, while the value grew 8% to GBP103 billion out of a total of GBP121 billion.
"Momentum of supplier releases picked up in the second half of the year when buyers sent Tungsten 25% more suppliers to bring onto the Network than in the first half," it said, adding that the pipeline of new customers for the network is stronger than ever.
Tungsten said its new bank has made a promising start, although it decided last week not to take deposits for now.
"It will not impact the company's invoice financing capacity, since the Insight Investment arrangements and the bank's balance sheet are sufficient to fund Tungsten Early Payment demand," it said.
The bank's Early Payment product, which facilitates payment on approved invoices when the customer decides at a lower cost than most banks, had 188 suppliers signed up by the end of April, with 38 having completed the registration process.
"Since launching Tungsten Early Payment at the end of last year, we have determined that the sales and enrolment processes take longer than desireable; require more sales people and marketing resources; and need a simpler supplier financing approval process to gain traction. We have hired Early Payment sales people, plan to increase the marketing budget in the current financial year, and are simplifying and shortening the process for suppliers to be approved for Tungsten Early Payment, which currently takes several months before a supplier is allowed to finance their invoices," it said.
At year-end, 42 buyers were signed up for the company's standard Invoice Status Service, up from 37 at the mid-year, and it has introduced a full invoice enhancement that means suppliers can see the status of invoices sent to buyers even if they have not yet connected to the Tungsten Network and will also allow Tungsten to provide Tungsten Early Payment to suppliers not yet connected to the Network.
"Seven buyers have already signed up for the full Invoice Status, which when fully deployed would increase the addressable market for Tungsten Early Payment fivefold," the company said.
"We expect these changes to impact financing volumes positively and anticipate the benefit of this will be seen in the current financial year," it added.
"We look forward to 2016 as the year when Tungsten Corporation begins to transform the world's supply chain and I believe Rick is the right person to lead the company as CEO as we execute and deliver on our strategy," Truell said.
Tungsten expects to announce its final results for the year to end-April on Wednesday July 22.
Tungsten shares were down 4.1% at 139.06 pence Thursday morning. The stock has fallen by half so far this year, having been in a down trend since hitting a peak of just under 400 pence last September.
By Steve McGrath; [email protected]; @stevemcgrath1
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