TIDMESG
RNS Number : 2089Z
eServGlobal Limited
13 March 2017
eServGlobal Limited (eServGlobal or the "Company")
AGM Statement
Sydney: 13 March 2017
eServGlobal (LSE: ESG.L & ASX: ESV.AX), the provider of
innovative mobile financial technology, 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:
"In reviewing progress over the last year there was clear
evidence of turnaround in FY2016, however further work needs to be
done and the task of a complete turnaround remains our focus. We
continued to make progress on costs and new orders in the core
business which, combined with significant achievements by HomeSend,
provides positive indications for FY2017. We expect sufficient
order flow in H1 to support our outlook of breakeven in the core
business in the 12 months to 31 October 2017, and progress by
HomeSend remains consistent with reaching a breakeven point during
this calendar year.
The progress of our joint venture, HomeSend, is very
encouraging. It continues to evolve from start-up to fast-growing
global business and maintains its trajectory to achieve breakeven
within the current calendar year. Since the formation of the joint
venture, it has significantly expanded both its capabilities and
the target markets it serves. While maintaining a first-mover lead
in the north-south international remittance space, HomeSend is also
now positioned to challenge the wider cross-border payments market.
HomeSend can now facilitate bank transfers for both consumers and
businesses. This is a US$22 trillion market in which traditional
services have not kept pace with economic and technological shifts.
HomeSend has a compelling offer for the lucrative low-value / high
frequency end of this market.
HomeSend is supported in this market by its strong position as a
standard part of Mastercard's strategy for international money
transfer. HomeSend will facilitate the cross-border functionality
for Mastercard Send which allows a company the ability to
distribute cash across multiple financial end points. HomeSend can
help banks modernise their funds-transfer services and will
facilitate international transfer capabilities.
HomeSend is attracting interest from banks, both large and
small. In September 2016 we announced a partnership for
cross-border payments services with KEB Hana Bank in South Korea.
Initial services have gone live and we expect to see a rapid ramp
up of volume across the first year of the contract.
With live services now deployed in more than 80 countries, the
Board of eServGlobal is satisfied with the progress made by
HomeSend to date and optimistic for the coming year. We look
forward to updating you on further progress by HomeSend as the year
progresses.
In our core eServGlobal operation, we made significant progress
on costs, processes and orders. However despite the progress made,
we fell short of our revenue targets at year end. We have adjusted
our approach and made further operational changes early in this new
year. In previous years our geographical and partner focus has been
too narrow and this was not sufficiently addressed during FY2016.
However, the signing of our first channel partnership at the end of
the year is expected to contribute to expanding our installed
customer base in the coming years and we expect success here to
confirm we are on track to hit our targets going forward.
Looking ahead, positively, costs are currently tracking below
guidance with further progress being achieved in this area. We now
expect costs to be in the region of EUR17m for the 12 month period
to the end of October 2017. Previously we said 'below EUR18m'. This
continued reduction is deliberate and is the result of continued
work on our model, our structure, our processes, and our control
early in FY2017.
With the arrival of Andrew Hayward as CFO, we have made further
improvements in our operations including better cash collection
processes and more detailed forecasting. Debtor days are now
tracking below 100 days and the Company works hard to manage the
cash position. I am confident that the post-turnaround executive
team currently at the helm is the right team to complete this
journey.
The executive team have refined the critical success factors and
KPIs for the business which are being closely monitored and
actively cascaded across the business. I feel satisfied that our
ability to monitor performance on an ongoing basis has become more
rigorous and that the strategic direction of the business is clear
across all operations.
During 2016 our shareholders demonstrated their belief in the
potential of eServGlobal and HomeSend through a substantial
fundraising of A$26.2m (EUR17.5m). On behalf of the Board I would
like to express our thanks to our shareholders for their ongoing
support.
As mentioned, we expect sufficient order flow in H1 to support
our outlook of breakeven in the core business, especially overlaid
with reducing costs further to EUR17m. HomeSend is closely engaged
with a number of potential bank partners, and with the level of
activity that has presented itself in a now hugely expanded market,
we continue to strive towards reaching breakeven point during this
calendar year."
A further announcement with the results of the AGM votes will be
released after the close of the meeting.
The Company will also provide an accompanying presentation at
the AGM which is available on the Company website at:
http://eservglobal.com/investors/
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
Tom Rowe, Company Secretary investors@eservglobal.com
Alison Cheek, VP Corporate Communicatons
finnCap Limited (Nomad and Broker) www.finnCap.com
Jonny Franklin-Adams / Anthony T: +44 (0) 20 7220
Adams 0500
Alma PR (Financial Public Relations) www.almapr.co.uk
Hilary Buchanan / John Coles T: +44 (0) 208 004
4218
This information is provided by RNS
The company news service from the London Stock Exchange
END
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