TIDMESG
RNS Number : 9476R
eServGlobal Limited
14 March 2016
eServGlobal Limited ("eServGlobal" or the "Company")
AGM Statement
14 March 2016
eServGlobal (AIM: ESG & ASX: ESV), the provider of
end-to-end mobile financial services to emerging markets, will hold
its Annual General Meeting at 11am (AEDT) today in Sydney,
Australia.
At the meeting John Conoley, Executive Chairman of the Company,
will provide the following address to shareholders on behalf of the
Board:
"The FY 2015 financial performance was poor due to slow project
delivery and low sales activity. However, our changes in late 2015,
which we executed with urgency, have generated increasing sales
activity and a growing pipeline. Low sales persisted into Q1 FY
2016, but we can confirm our previously stated view that recovery
is expected to begin in Q2 of FY 2016. This means that revenue and
profitability will be second-half weighted, which is the Company's
traditional distribution.
As we have previously said, working capital has been tight and
remains so today. We expect this to improve across H2 with the
expected recovery in orders, helped by the return of the HomeSend
escrow monies from MasterCard, which the Company expects to receive
in April 2016.
Self-help measures previously announced to control costs and
improve cash collection have already yielded benefits to the
business and we continue to work on these areas. We previously
indicated a breakeven point of EUR19 - 20 million in FY 2016. Due
to continued efforts by the management team, we believe there is an
opportunity to reduce that further within this year and we will
update in due course. The Company expects to achieve a small EBITDA
surplus for the core business in the 2016 financial year with some
revenue growth and a substantially lower cost base.
The management continues to target the generation of cash from
operations within the year as an important milestone. In FY2015 the
debtor days of the company were 175, a very long time to collect
cash. It is true that, at times, we have handled difficult projects
in some difficult areas of the world and that will always have a
bearing. However, we can do much better just through working more
smartly and more commercially, irrespective of some of the
challenges posed by the markets in which we operate. In Q1 of FY
2016, we planned to achieve 120 debtor days and this target was
realised. There remains some unpredictability in cash collection
for the time being, but over the medium to long term we expect
consistently lower debtor days through better quality product, a
better sales approach, and better processes across the company.
Issues with delivering projects on time and within budget in
2015 calendar year are now behind this business. Attention has been
very strongly focussed on restarting the sales engine of
eServGlobal. Mobile World Congress, the largest mobile trade show
in the world, has recently concluded. Each year this is a
significant source of lead generation for eServGlobal, and from
that point of view it has been our most successful event so
far.
At the show we promoted the new level of our main product,
PayMobile 3. As we hoped and planned, this has generated interest
from a wider set of countries and partners than we have managed in
recent years. Narrowness of geographical focus has been, and is
today, a weakness of this business. PayMobile 3 is an important
step forward in beginning to address that weakness. We will follow
up these leads as quickly as possible and will consider in due
course the full effect on overall pipeline.
We now have live reference accounts for PayMobile 3, which in
themselves are generating interest from other potential
customers.
Steady progress has continued in preparing the HomeSend business
for faster growth. The granting of the Payment Institution Licence
to HomeSend, and the successful Data Centre move, both recent
events, were significant and mandatory milestones to increase
growth. A webcast has been released today by eServGlobal featuring
the CEO of HomeSend, Stephen Doyle, reviewing progress to date.
This can be found at our website.
Corridor numbers and country coverage have been the key data
points to understand this phase of HomeSend's development. Up to
February 2016 these have reached 3,110. Over the rest of the
HomeSend financial year to 21 December 2016, the emphasis will move
towards volume and spread across those corridors rather than number
of corridors.
Operating in the highly-fragmented and high-growth market of
international payments and transfers, HomeSend is a disruptive
technology, with a unique ability to address the challenges of both
payment service providers and consumers. HomeSend's vision is to
build a truly open and interoperable remittance ecosystem for all
participants. In line with that vision, and building on the success
already achieved connecting mobile wallet deployments, HomeSend are
adding new 'end-points' for sending and receiving funds. The most
exciting potential development in this regard is the expected
launch of MasterCard Send.
This is a new MasterCard service which will use HomeSend as the
global hub to allow money to be sent from MasterCard cards to other
MasterCard cards, and also to other vendors' cards around the
world. With over 1.2 billion MasterCard cards in existence, and
MasterCard targeting the emerging markets to significantly grow
that number in the years to come, the strategic nature of this
initiative for both MasterCard and HomeSend is evident. The actual
release will see a country-by-country enablement, with the current
rolling plan looking out over the next three years. This
application can be offered by HomeSend partners across all
corridors. The MasterCard Send service demonstrates the continued
commitment of MasterCard to the HomeSend Joint Venture.
On behalf of the Board of eServGlobal, I would like to finish by
acknowledging the ongoing support of our shareholders during what
has been a frustrating period. As I stated recently in the Annual
Report, currently I see no intrinsic external reason why the core
business cannot be a success. The shortcomings in FY 2015 have been
a result of poor execution by us rather than market related issues.
The pipeline has increased beyond historical levels and the main
risk is our inability to control the timing. We are working very
hard to realise the opportunity that is in front of the core
business, firstly to restore acceptable performance and secondly to
rebuild value. We look forward in addition to an exciting year for
Homesend"
A further announcement with the results of the AGM votes will be
released after the close of the meeting.
We will also provide an accompanying presentation at the AGM
which is available on the Company website at:
http://eservglobal.com/investors/
The HomeSend webcast is available at:
http://eservglobal.com/2016/03/13/homesend-progress-update/
For further information, please contact:
eServGlobal www.eservglobal.com
Tom Rowe, Company Secretary T: +61 (0)2 8014
5050
investors@eservglobal.com
Canaccord Genuity Limited (Nomad www.canaccordgenuity.com
and Broker) T: +44 (0) 20 7523
Simon Bridges / Cameron Duncan 8000
/ Emma Gabriel
Alma PR (Financial Public Relations) www.almapr.co.uk
Josh Royston / Hilary Buchanan T: +44 (0) 208 004
/ John Coles 4218
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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March 14, 2016 03:36 ET (07:36 GMT)
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