Tungsten Corporation lifts expectations ahead of final results

The AIM-traded company said the increase in revenue reflected improved sales momentum, customer contract harmonisation and the impact of currency exchange rate movements.

On a constant currency basis, revenue was expected to be 12% greater than the prior year.

Tungsten said its EBITDA loss for 2017 was anticipated to be less than £12m, which would be at least £1m better than prior guidance and demonstrated “continued discipline” in the firm’s cost containment and automation measures, even as exchange rate movements negatively impacted reported costs.

The net impact of exchange rate movements on reported EBITDA was expected to be minimal.

Unaudited cash, including self-funded Tungsten Network early payment invoices, was £21.8m as at 30 April.

“This was £1.8m higher than guidance and included cash received from the sale of Tungsten Bank in December 2016,” the firm’s board said in its statement.

“Outstanding early payment invoices totalled £4.2m and were financed by the group on a transitional basis prior to the implementation of additional funding arrangements with our partners.

“Subsequent to the year-end, £1.2m of these early payment invoices have been repaid and all are scheduled to be repaid by 31 July 2017.”

Tungsten's operational and financial progress in 2017 meant it was on track to achieve its goal of EBITDA breakeven on a run rate basis in calendar 2017.

Management said it would provide further detail on Tungsten's initiatives that underpin its improved position when the group announced its full-year results on 24 July.

“Tungsten made remarkable headway in fiscal '17, reflecting great work by people across the business,” said CEO Rick Hurwitz.

“FY'17 was a year of disciplined reengineering across many functions.

“We have strengthened our relationships with existing customers and welcomed many new members to the Tungsten Network.”

Hurwitz said the company had also introduced “innovative products” and “scalable” new technologies.

Having successfully divested Tungsten Bank, the board refocused Tungsten Network Finance and said it finished the year with a “strong” balance sheet.

“We continue to progress Tungsten's transformation, while demonstrating that the steps we are taking are yielding beneficial results.

“Of specific note, we attracted highly talented people to the business, added 10 new buyers, connected 48,000 new suppliers, processed 17.1 million invoices, and ended with £17.6m of Tungsten Network Early Payment outstanding invoices.

“We've started the new financial year with encouraging momentum and a clarity of purpose that augur brightly for Tungsten's outlook,” Hurwitz said.