eServGlobal Limited Trading Update (4401O)

TIDMESG

RNS Number : 4401O

eServGlobal Limited

07 November 2016

Paris: 7 November 2016

eServGlobal Limited (eServGlobal or the "Company")

Trading Update

eServGlobal (LSE: ESG.L & ASX: ESV.AX), the provider of innovative mobile financial technology, provides the following update on trading for the financial year ended 31 October 2016.

Revenue is expected to be in the range of EUR14.0m to EUR14.5m, which is below previous guidance. Encouragingly, the total contracted bookings of over EUR21.0m was 60 per cent. higher than in FY15. Contracts were signed at year end where revenue recognition will fall into future years and the Company did not manage to close other material contracts in time for year end.

Costs are expected to be in line with expectations at approximately EUR19.5m, down from EUR23.8m in FY15 due to focussed management and restructuring. The cash balance at the end of FY16 is approximately EUR6.4m. While the revenue position for the core business is disappointing and the timing of revenue recognition is frustrating, the Company has continued to provide strong evidence of the turnaround of the business and the significant growth in orders is testament to this progress.

The Company has just signed its first major channel partnership, evidencing market support for the redesigned software platform, PayMobile 3. The partner operates in areas of Africa which the Company has historically struggled to penetrate and we now expect a significant growth in regional opportunities in these areas over the next five years as a result.

Looking forward, in FY17 the core business is well positioned to grow sales significantly following the increased order flow. Costs will be a further EUR1.0m below FY16 at under EUR18.5m. There is also scope for further improvement to operational processes in the year ahead.

The Board is pleased with the continuing progress of the joint venture with Mastercard. HomeSend has continued to increase its send and receive footprint globally, handling remittance, disbursement and bank transfers both directly and through the Mastercard Send digital platform. The joint venture remains on track for breakeven in 2017.

At the most recent Mastercard Quarterly Results call, Mastercard CEO Ajay Banga said,

"HomeSend is a unique asset for cross-border payments and it expands our reach to billions of bank accounts across more than 70 markets through their phone numbers and systems."

In addition, the Board have moved to strengthen the management team by appointing Andrew Hayward as CFO. Most recently Andrew held the role of Head of Finance at Hurricane Energy plc and brings significant financial leadership to the Company based on his experience of public markets, M&A and growth companies.

Commenting on the performance John Conoley, Executive Chairman said,

"I am proud of the achievements of the Company in its core business in FY16 after its poor start. Although we did not fully recover from that start by the end of the financial year and reach our target of cashflow breakeven, we have embarked on FY17 with justified optimism in the core business. I am delighted that Andrew Hayward has taken the position of CFO in the business ensuring we capitalise on the progress we have already made. Our optimism applies equally to the HomeSend Joint Venture and recent progress is consistent with HomeSend's ambition to reach the breakeven point in 2017."

About eServGlobal

eServGlobal (AIM:ESG, ASX:ESV) offers mobile money solutions which put feature-rich services at the fingertips of users worldwide, covering the full spectrum of mobile financial services, mobile wallet, mobile commerce, recharge, promotions and agent management.

For more than 30 years, eServGlobal has been a source of innovation for telcos and financial institutions. Using carrier-grade, next-generation technology, eServGlobal aligns with the requirements of customers around the globe.

Together with MasterCard and BICS, eServGlobal is a joint venture partner of the HomeSend global payment hub, enabling cross-border money transfer between mobile wallets, cards, bank accounts or cash outlets from anywhere in the world.

For further information, please contact:

 
 eServGlobal                                 www.eservglobal.com 
 Alison Cheek, VP Corporate Communications   T: [phone] 
                                              5885 
 finnCap Limited (Nomad and Broker)          www.finnCap.com 
  Jonny Franklin-Adams / Carl Holmes          T: [phone] 
  (Corporate Finance)                         0500 
  Tim Redfern / Mia Gardner (Corporate 
  Broking) 
 Alma PR (Financial Public Relations)        www.almapr.co.uk 
  Josh Royston / Hilary Buchanan              T: [phone] 
  / John Coles                                4218 
 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 07, 2016 02:00 ET (07:00 GMT)