LONDON (Alliance News) - eServGlobal Ltd, the mobile money company listed in Australia and London, on Wednesday said it plans to review the carrying value ascribed in its accounts to HomeSend, its cross-border money transfer venture with MasterCard and BICS, amid an "exciting period of development".
HomeSend, a global payments hub that allows money to be transferred between mobile wallets, cards, bank accounts or cash outlets, has become "the primary motivation" for a "significant portion" of shareholders to support eServGlobal, John Conoley said in February's annual report. eServGlobal recorded its 35% stake in HomeSend at AUD31.5 million in its accounts for the year ended October 31, 2015.
On Wednesday, eServGlobal said it remains confident in expectations for the joint venture. In the six months ended April 30, the first half of eServGlobal's financial year, HomeSend moved beyond its initial goal of facilitating remittance transfers to mobile wallets in emerging markets, the company said. The venture is now positioned to facilitate a "growing range" of international payments and transfers, eServGlobal said, including to developed markets.
"HomeSend continues to make strong progress. The advent of several strategic milestones will be instrumental in moving HomeSend beyond its original role as a facilitator of remittance to emerging markets, to now lead the shift to digital in global international payments of any kind," Conoley said on Wednesday.
Away from the promise of HomeSend, eServGlobal has been upfront about its core mobile financial services business. The concerns were primarily due to the core's cash consumption, according to remarks made by Conoley in eServGlobal's annual report for the year ended October 31.
"The major transformation of the core business of eServGlobal is now beginning to yield results," Conoley said on Wednesday. "Year to date revenues, work in progress, maintenance and recurring revenues show that we can expect approximately EUR12.0 million already for the year, meaning that we require in [the second half] about a further EUR7.5 million of additional project revenue to reach revenue guidance."
"We can expect about half of that to come from existing customers, leaving EUR3.75 million to be sourced from customers new to eServGlobal. Whilst challenging, it is not an unreasonable target to achieve breakeven, and we have a range of opportunities that we have been working on for many months to enable us to reach our target," Conoley said.
In April, eServGlobal revealed that it had signed a contract, valued at EUR6.0 million over five years, to supply its PayMobile software. That was followed by another contract win in May, to supply its PayMobile software to a service provider in West Africa.
eServGlobal expects to report first-half revenue of EUR5.5 million with a normalised loss before interest, tax, depreciation and amortisation of between EUR4.5 million and EUR5.0 million, and said it has a "good base" from which to perform well in the second half.
A loan facility of EUR1.3 million agreed in March with Alphagen Volantis Fund Limited and the Alphagen Volantis Catalyst Fund Limited, part of Henderson Global Investors, will take eServGlobal's indebtedness to EUR14.1 million when the final EUR650,000 is drawn down.
The company expects revenue and profitability to be weighted to the second half, due to an "improved pipeline and an element of seasonality".
eServGlobal is due to report first-half results for the six months ended April 30 by June 30.
Shares in eServGlobal were up 13% at 5.22 pence on Wednesday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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