Tungsten Share Discussion Threads

[andrewdbl] 20/12/2015 11:31

just to record the publication, not a recommendation

hxxp://www.shareprophets.com/views/17395/tungsten-meet-the-new-boss-same-as-the-old-boss-don-t-get-fooled-again

and in the bearcast TW says they will be out of cash by Dec 16 / Jan 17

[bs76] 18/12/2015 14:53

What's going on?

Volume over 5m today

[andrewdbl] 17/12/2015 22:00

M,

Be careful with fintech. Especially the really interesting 'blockchain' buzzword compliant propositions.
V. fashionable right now, probably mostly doomed.
I have seen a number of 'revolutionary' currency exchange offerings and well, maybe missing something but am not seeing anything really new.

The thing about fintech is that it seems (to me) to be people from banks (or big data) stepping back from the slow moving highly regulated environment, using lots of computers and thinking they can do the same job for less.
Maybe they can, but the regulation is there for a reason (the money goes where you sent it and you are real and so is the payee and you are not money laundering and your bank balance really is that value etc etc) and once these fintech people reach any scale, the same regs will be forced upon them.

Izabella Kaminska said it better and at much greater length on FT Alphaville.

[manics] 17/12/2015 18:37

chemist claims new online positioning is coming.
Capital markets day scheduled for FEB16.
TEP modified mechanic updates (again posted by our friend chemist).

If I wanted to relaunch TEP as an offering, I'd bring it all together for FEB and make a big splash with it on every platform that I could -including the investor base.

FWIW (which is absolutely nothing to anyone reading) I think I'm going to be adding soon. I'm already in about £45k larger than I should be. I still think there are exceptionally smart people involved in this business who will eek out a model one way or another. 2016/17/18/19/20 is hashtag fintech. It may or may not include TUNG, but financial innovation is long overdue and will be a boom imo.

[chemistdude] 17/12/2015 16:37

Andrewdbl I did make a start to type a transcript last night but got bored after 10-15 mins. Takes too long and don't have a mic for dictation. Richard Hurwitz is one fast talker! :S

[andrewdbl] 17/12/2015 16:32

cd,

Do you have a transcript?

[chemistdude] 17/12/2015 16:14

"Strategic theme no 4 which is about adjacent services. We again recognise that that network effect allows us to engage with this global supply chain more fully. That engagement will take the form of again better use of technology; think tungsten’s portal where every week a host of corporations across the world are arriving to deliver invoices, to understand the status of that invoice, to make changes with respect to it and increasingly for financing. We intend to enrich that space, to fill it with greater content and greater value. And that value we seek to introduce other products there that will be germane to the global supply chain in the way of providing aspects that fulfil needs there that lie well alongside our AP automation activities: think currency conversion.

We recognise that about $47b of the $200b flow were in two currencies. A Mexican vendor delivering goods to Kellogs receives $ in payment and needs to convert that to pesos. We’re going to make it easy for them to do so; lower cost lower friction right at the tungsten portal. We have put together a framework in which to think about these adjacent services. We are in active pursuit in fact engagement with 3 different parties to introduce 3 different products at the site. These will be higher margin opportunities as we act as selling as a reseller, lower cost attendant to it but we think very significant impact in economics – this is not product sizzle, this is contribution and we intend to pursue this in earnest."

Our "FAB FOUR" will add significant revenue in H2 2016 imo cash burn could be lower than forcasted. GE and Siemens are two of them, anyone know who the rest are?

[bs76] 17/12/2015 15:54

Again not sure about revenue. Rick has come up with 4 themes and fourth themes is to find adjacent services to increase revenue

[bs76] 17/12/2015 15:53

This sounds interesting. I just heard the call again.

FYI for others- Rick mentioned about FX service to be provided by TUNG. He gave an example of mexican supplier's invoice to Kellogs in dollars and receive payment in dollars and then convert (I suppose through their own bank) to pesos. Tung portal will provide that service.

Rick also mentioned that $45B out of total $200B was from mexic0 (If I heard it correctly)

[chemistdude] 17/12/2015 13:57

Anyone done the math on $47B of $ to pesos conversion?

What would be our take? 10 or 20 basis points? 0.1% or 0.2%?

Thats $47-94m revenue. Realistic?

[chemistdude] 17/12/2015 11:10

Tungsten Network receives first TrustWeaver-Verified Trust Mark

Stockholm, 17 December 2015 – TrustWeaver, a leading provider of cloud-based document compliance solutions, has awarded the first ever TrustWeaver-Verified Trust Mark to Tungsten Network.

The TrustWeaver-Verified programme helps businesses better understand the varieties of tax compliance covered by a third party operator’s services. Tax regulation, and the many requirements that stem from value-added-tax (VAT), cover a variety of invoicing and accounting functions.

TrustWeaver recognised a lack of market transparency over which vendors are taking responsibility for different aspects of compliance. Given the costs and risks involved in tax compliance, going above and beyond to invest in compliance is an important differentiator for e-invoicing vendors, and so TrustWeaver has developed criteria that publicly declares the standards a company meets.

The TrustWeaver-Verified Trust Mark states four areas of compliance that a vendor has been assessed on by TrustWeaver’s auditors:

- The management of invoice integrity and authenticity
- Archiving and auditor access
- End-to-end controls between the trading partners and the service provider
- The service provider’s processes to ensure that invoices contain all legally required data fields.

TrustWeaver has found Tungsten to accept responsibility for meeting high standards of compliance best practice in all four areas, awarding them with the highest mark of compliance, which in turn lets Tungsten’s customers know that they are dealing with a best-in-class service provider. Tungsten Network, part of Tungsten Corporation (LSE: TUNG), is the global e-invoicing, invoice finance and spend analytics company working to help companies improve cash flow and make better buying decisions.

Organisations are ultimately responsible for complying with local tax regulations, but more and more companies are outsourcing their administrative processes to specialised third party service providers with the expertise and resources to deal with ever-evolving tax legislation.

Lucy Ashdown, Head of Network Compliance at Tungsten Network, says, “Tungsten has invested heavily over the years to ensure we are compliant across many legal areas, and we’re pleased to be leading the industry on this and forging a path with TrustWeaver to take compliance – and our clients – to the next level. Compliance is particularly critical for invoice-based FinTech services, where automation is everything. With Tungsten being awarded this inaugural Trust Mark, our customers can be assured that VAT compliance and all this entails is a significant priority of ours, and a responsibility we do not take on lightly.”

Anna Nordén, General Counsel of TrustWeaver, commented: “For a long time, the market has requested that we verify compliance services against an impartial VAT compliance best-practice standard. We’re very happy to kick off the TrustWeaver-Verified programme with Tungsten, as they are an industry leading operator who has consistently taken compliance very seriously.”

[manics] 17/12/2015 10:13

Thanks bs76.

[bs76] 17/12/2015 10:01

And it's mentioned in Half yearly report

"Trade and other receivables, including assets held for sale, grew £2.3m from 30 April 2015 to 31 October 2015. The
increase was a result of a number of significant invoices raised with our customers shortly prior to the period-end
and operational issues in credit control. These issues are being addressed and since the period-end £0.4m of the
balance had been collected. Trade and other payables, including assets held for sale, decreased by £2.5m from 30
April 2015, primarily reflecting seasonality of cash flows."

[bs76] 17/12/2015 09:59

Manics, No disrespect but every time I have read paul's blog, I have found something wrong

", with cash having reduced from £32.6m to £15.9m in the last six months, an astonishingly high rate of cash burn. Clearly at that rate of burn, then the company would probably be out of cash by the summer of 2016"

cash-burn of £13.1 in 6 months.

He forgot to look at Trade Receivables and Trade Payables which accounted for 3.7m.

30th April 2014=>30th April 2015=>30th Oct 2015
Trade and other receivables 6,025,000=>8,372,000=>10,317,000
Trade and other payables 6,774,000=>8,628,000=>6,528,000
-749,000=>-256,000=>3,789,000

so real cash burn is 13.1-3.7 = 9.4 which is similar to EBITDA

[chemistdude] 17/12/2015 09:06

Market Report: Crispin Odey’s mettle is being tested by the trials of Tungsten



Crispin Odey is certainly living up to his reputation as Mr Contrarian.

His hedge fund, renowned for going against the grain with bold bets, is a 20% shareholder of Tungsten Corp, a heavily shorted AIM stock that has crashed 85% this year.

Odey’s gamble is yet to pay off and the shares fell further today, losing 1p to 40p, after the company confirmed the sale of its banking arm for £30 million to focus on the electronic invoicing business.

It came as it revealed first-half revenues rose 28% to £13.1 million, with pre-tax losses widening to £17.8 million, including a £6.8 million writedown on the value of Tungsten Bank.

Hedge funds such as JPMorgan Asset Management have short positions in the company in the hope the shares will fall further, but Odey is thought to be a big supporter of the new management, who have set the bar at a more realistic level.

Truell retains a near-17% stake in the business.

[togglebrush] 17/12/2015 07:41

Yesterday was a very muted market response to the Interims compared to the earlier Full Year
'
ADVFN Data______________Open__High___Low___Close__Volume
‘
FY Results__22/07/2015__80.00 80.00 65.50 67.50 7,455,478
‘
Interims____16/12/2015__41.00 41.00 37.00 40.00 2,057,530

[chemistdude] 17/12/2015 00:26

As for Tungsten ……
BE
This does look rather like the strategy unravelling
BE
Interims are poor. Bank’s on the block to raise cash.
BE
Shore says ………
BE
Tungsten interim results are well below expectations. While revenue for the interim period of £13.1m is up 28.4%, full year expectations assumed 38.3% growth but are being reduced again in the company’s outlook to £27.5m. We note that 2016 revenue expectations were gradually reduced from £85.9m earlier this year. The EBITDA loss of £9.5m is also greater than expected and the company is managing the current expected £13.0m loss for the full year to no more than £19.0m. While this is clearly disappointing versus the expectations, it is likely not a massive surprise given the share price decline from the 80p level after the full year results in July to 41p yesterday. There has also been a considerable level of short interest of 5.2% so the shares have been volatile already this morning.

The good news is appears the company is close (exclusivity agreement) to selling off the bank it acquired July 2014 to an unnamed buyer. Although no price has yet been disclosed, the process will take PRA approval which will likely be six to twelve months. This would release precious cash that was being tied up by regulatory requirements. The Group’s cash position is expected to be at least £8m excluding the cash in Tungsten Bank, or no less than £33m including cash currently held in the Bank by the end of FY’16 so we see no significant cash constraints in the near future assuming the sale goes through.

Progress with financing has been minimal and the on-boarding of new suppliers has not been as good as expected. We plan to gain more insight on the company’s conference call this morning on these topics.

While Tungsten is not expected to be generating profits until 2018, it trades on quite a low multiple of sales when cash is excluded. The company’s market capitalisation of £51.4m includes £33.7m of cash (the majority restricted but expected to be released within twelve months) and on this basis trade at 0.6x EV/Sales.

BE
Or if you prefer, Canaccord
BE
Which I’d guess is shop here.
BE
EBITDA and FCF are on improving trends. EBITDA loss improved to £9.5m in H1 FY16 from £13.2m in H1 FY15. Similarly, Equity FCF loss improved to £9.6m from £15.4m in H2 FY15 and £17.2m in H1 FY15. EBITDA and FCF should improve further: H1 FY16 EBITDA loss of £9.5m includes £2.4m of one-off costs and approximately £1m of fixed costs in Tungsten Bank that should be eliminated with the sale of the bank. Therefore, ‘underlying’ EBITDA loss was £6.1m in H1 FY16. Free cash outflow tracks EBITDA closely, at £1.1m per month and about £0.9m per month excluding losses from the bank itself. As a result, we conservatively expect net cash including Tungsten Bank to fall to £33m by FYE16 from £39.7 at the end of H1 FY16.

Tungsten plans to reach EBITDA breakeven by the end of FY17. Going forward costs and expenses are not expected to rise while revenues continue to rise, driven by supplier and buyer additions, price increases, increased automation of onboarding and increased momentum in Tungsten Early Payment and ancillary services, including analytics.

BE
H1 FY16 ‘Underlying’ EBITDA of £6.1m and free cash outflow of approximately £0.9m per month excluding Tungsten Bank compare favourably against net cash, excluding cash in Tungsten Bank, of £15.9m plus an expected consideration of approximately £30m from the sale of Tungsten Bank. In comparison, Tungsten’s market cap is £51m, which implies limited value for the business itself. We lower our SoTP target price from 84p to 76p (Tungsten Early Payment 21p; Tungsten Network 65p; central costs -37p; FY16 net cash 26p).

[bs76] 16/12/2015 21:59

Today 21:51 Price: 40.00Beamer21 2,399 postsPlenty of successful companiesstarted with a slow burn - Off Topic

[andrewdbl] 16/12/2015 20:37

Has anyone noticed that in the "Condensed Consolidated statement of financial position",
the figures for 31/10/14 look ever so similar to the equivalent values for 30/04/15
?

[jl9] 16/12/2015 19:35

Outrageous.

Grizzly endgame ahead.

[prowlersanarse] 16/12/2015 18:23

Tungsten Corp – interim results statement hilarity, are management trying to fool us or are they fooling themselves?
By Steve Moore | Wednesday 16 December 2015


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

The financial highlights from today’s interim results announcement from Tungsten Corp (TUNG) include “Loss after tax of £17.6m (H1-FY15: £14.7m loss)”, but not to worry as Chairman Nick Parker reassures that the company “is making progress, achieving strong revenue growth and concluding encouraging customer renewal agreements… with a strong pipeline of new customers and prioritisation of activities that accelerate the realisation of profitable business, I believe Tungsten is well placed to deliver sustainable growth”. Hmmm…

Despite the results statement also including the likes of “total volume of new suppliers was fewer than anticipated” and “revenue from Tungsten Analytics in the period was £33,000… Revenue from Tungsten Early Payment was £0.1m”, apparently the company “were pleased with the results in this period”, “is encouraged by the growth in suppliers' interest in the current Tungsten Early Payment offering” and “progress is being made with our Tungsten Early Payment and Tungsten Analytics offerings”. Hmmm…

On 'Early Payment' it added that “no revenue was recognised on invoice receivables financed by Insight as the invoices transacted featured introductory discount rates. We expect to meet the required hurdle rates in H2-FY16” and that it “is encouraged by the growth in suppliers' interest in the current Tungsten Early Payment offering, although the uptake remains slower than anticipated”. Hmmm.

On 'Analytics' there is hilarity as despite this now having been demonstrated to or trialled by more than 50% of e-Invoicing buyer customers and apparently “in general, the feedback has been positive… at the initial pricing levels quoted none agreed to purchase the product”! Despite this, we are told that having varied the approach, “making product alterations based on buyer feedback and changing the pricing structure… we remain confident in the long-term prospects of the product”. Hmmm.

Despite all the above, we are also told of board confidence that “Tungsten is on track to achieve break-even on an EBITDA basis by the end of FY17” and that, with an approximately £30 million sale of its bank agreed and other initiatives underway, “the board is confident that Tungsten will have the cash resources required to meet the leadership team's break-even target”.

We’ll see, but the detail of this latest update doesn’t exactly inspire confidence – and neither does ludicrous management speak such as the company “resets expectations about the trajectory of its opportunity” and has “evolved our vision such that Tungsten aims to be the world's most trusted business transaction network using data intelligently to strengthen the global supply chain”.

The share price suggests the market is not buying it (literally), and, as I’ve said continually (see, for example, HERE and HERE) neither do I. Data as of the end of last week showed short interest still from the likes of GSA Capital Partners (1.49%), JPMorgan Asset Management UK (1.01%), Oxford Asset Management (0.89%), Numeric Investors (0.82%) and Hutchin Hill Capital (0.68%). I can continue to understand why.

The shares are a sell

- See more at: hxxp://www.shareprophets.com/views/17300/tungsten-corp-interim-results-statement-hilarity-are-management-trying-to-fool-us-or-are-they-fooling-themselves#sthash.ShO1LaE5.dpuf