eServGlobal Limited Core Business Trading Update (7266C)
24 January 2018 - 6:00PM
UK Regulatory
TIDMESG
RNS Number : 7266C
eServGlobal Limited
24 January 2018
eServGlobal Limited ("eServGlobal" or the "Company")
Core Business Trading Update for the 14 months to December
2017
24 January 2018
eServGlobal (LSE: ESG.L & ASX: ESV.AX), a pioneering digital
transactions technology company, provides the following update on
trading for the 14 months ended 31 December 2017.
eServGlobal's core business revenue is expected to fall short of
previous guidance and revenue will be in the range of EUR8.3M to
EUR8.5M. This is due to delays in the signing of certain
significant orders.
Signed agreements worth EUR3M revenue, which were expected in
4Q2017, have now been signed in January, with the full value
recognisable over a three-year period. Other opportunities for the
core business remain very active and crucially are mainly within
the eServGlobal customer base, in line with the renewed focus on
existing, quality customers. The anticipated execution of these
contracts will contribute to a positive start to 2018 for the core
business of eServGlobal.
Excellent progress has been made with planned cost reductions in
the core business, using fundraising proceeds to remove c.EUR2m of
annual costs from the business in the second half of FY2017 alone.
The Company expects to start FY2018 with an annualised total cost
base on an adjusted like-for-like basis of c.EUR12.8M. This is
anticipated to reduce further throughout the year to bring this to
a long-term sustainable level of EUR12-12.5M. This will be covered
by an expected EUR2m of deferred revenue from 2017, an expected
EUR5m of recurring revenue from existing customers and a targeted
EUR5m of changes and upgrades from these existing customers.
The underlying cost base which excludes PLC and Corporate cost
will be EUR9.5M - EUR10.5M however. Upside beyond breakeven at the
EBITDA level will be targeted from new contracts and new customer
wins. The core business is now well advanced in its goal of being a
valuable asset for eServGlobal.
John Conoley, eServGlobal Executive Chairman and HomeSend Board
Member, commented, 'Forecasting of precise order timing remains a
difficult discipline in the markets in which the core business
operates, and yet the shortfall of revenue is still in play for
FY2018. eServGlobal is pleased to have started FY2018 with two
significant orders in the core business that were delayed from
FY2017. I am further satisfied that we achieved our initial goals
on cost reductions which helps us maintain our aim of reaching
operational EBITDA breakeven during FY2018. As was planned we now
start the new financial year in a stronger position than the
comparative period FY2017. Furthermore the Board remains confident
in the immediate and longer term opportunities presented by the
HomeSend Joint Venture.'
About eServGlobal
eServGlobal (AIM:ESG, ASX:ESV) is a pioneering digital financial
transactions technology company, enabling financial and
telecommunications service providers to create smoother
transactions for their customers through deep technical expertise
and rapid implementation. Built on the latest technology platforms,
eServGlobal offers a range of transaction services including
digital wallets, commerce, remittance, recharge, rapid service
connection and business analytics. eServGlobal combines more than
30 years' experience, with an agile, future-focused mindset, to
align with the requirements of customers and partners around the
globe.
Together with Mastercard and BICS, eServGlobal is a joint
venture partner of the HomeSend global payment hub, enabling
cross-border transfer between bank accounts, cards, mobile wallets,
or cash outlets from anywhere in the world.
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary investors@eservglobal.com
Andrew Hayward, Chief Financial
Officer
Alison Cheek, VP Corporate Communications
finnCap Limited (Nomad and Broker) www.finnCap.com
Corporate Finance: Jonny Franklin-Adams T: +44 (0) 20 7220
/ Anthony Adams / Hannah Boros 0500
Corporate Broking: Tim Redfern
/ Richard Chambers
Alma PR (Financial Public Relations) www.almapr.co.uk
Hilary Buchanan / John Coles / T: +44 (0) 208
Helena Bogle 004 4218
This information is provided by RNS
The company news service from the London Stock Exchange
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