Tungsten sales up

Tungsten said unaudited revenue of £8.3m in the three months to 31 July 2017 was 12% higher than the same period in the prior year on a constant currency basis and in line with the Board's expectations.

Tungsten's focus in the year to 30 April 2018 (FY18) is executing against our plan.

In the first quarter we added three new Buyer customers to Tungsten Network. These included a multi-year global rollout of e-invoicing services for Carlsberg Group and a further sale of our new Invoice Data Capture product, which digitises non-electronic invoices and therefore enables quicker achievement of some of the benefits of digital automation.

We also continued to renew the contracts of existing Buyers on Tungsten Network to better reflect the value created by our services, without any notable losses. We continue to open new sales channels to increase our reach and have entered into a strategic partnership with Tech Mahindra to push automation in newer markets and increase our presence globally.

We continue to work closely with Buyer customers to onboard an increasing number of their Suppliers onto Tungsten Network including, amongst others in Q1-FY18, those of Mondelēz International and Sanofi.

In FY17, we expanded the breadth of Tungsten Network Finance products through an increased range of partners.

In Q1-FY18, we secured three structured receivables financing mandates totalling approximately $75m. We expect these to be funded by our partners in Q2-FY18, at which time we start to generate revenue.

Also in Q1-FY18, the first Tungsten Network customers took advantage of the flexible lines of credit offered through our partner BlueVine.

To enable us to accelerate the achievement of our goal of profitable growth, we are focussed on the execution of technology improvements that will enhance the scalability, reliability and security of Tungsten Network. In Q1-FY18, we made strong progress with the upgrade of our core processing capabilities and transition to new production infrastructure.

We expect these projects to be fully completed over FY18, delivering enhanced scalability, security and cost efficiencies.

In July 2016, we set ourselves the challenging goal of achieving monthly EBITDA breakeven by the end of this calendar year.

This remains our goal and in Q1-FY18 our unaudited EBITDA loss fell by 36% from the same period in the prior year as we made progress on both revenue growth and cost control.

We have a strong sales pipeline and expect to add more new Buyers to Tungsten Network this financial year than last. As always, the timing of contract closure determines the phasing of monthly revenues.

For FY18, our targets remain constant currency revenue growth in excess of 15% and a gross margin of at least 90%.

Tungsten's operating cost base is now stable and carefully controlled. In Q1-FY18, we continued to make organisational adjustments to meet the demands of our customers in a more efficient manner.

We continue to expect to spend less than £40 million in operating expenses during the year, excluding one-off restructuring costs of approximately £2m.

As we look forward to the rest of FY18 and beyond, we recognise that our markets are supportive of the products and services we offer and we have put the company in a position to generate profitable growth and shareholder value.

We remain excited about the opportunities afforded by our partnerships and corporate development activities.

Tungsten will announce its Interim Results for the six months ended 31 October 2017 on 14 December 2017.