28 Mar 2018 07:00
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
28 March 2018
BOXHILL TECHNOLOGIES PLC
("Boxhill", the "Group" or the "Company")
Trading Statement
Boxhill Technologies are pleased to give an update on recent developments.
Payment division
Since the Chairman's statement in October 2017, combined revenues in Emexpay and Emexgo for the period October 2017 to January 2018 has averaged £120K per month. The Company expects improvement on this as the High Value Transfer Service starts to gain traction. While there have been some successful transactions to date, these have been at the relatively lower category, being just over the £10m threshold, with revenue falling into February/March. The large nine figure transaction referred to previously in the announcement of 28 July 2017 is still live but also presents challenges for some of our banking partners with whom we continue to work closely.
The card processing business continues to steadily develop and the Company is focusing on non-gaming clients and rolling out services offering Union Pay services to clients.
The Company is also pleased to announce that it has established Market Access Limited ("Market Access") as a wholly owned subsidiary to operate a foreign exchange and treasury services business, which commenced trading on 19 March 2018. The Company is operated by Mark Harris who brings a great deal of experience in FX. In consideration for his services MHC St James Ltd ("MHC"), a company controlled by Mr Harris will receive shares in Boxhill equal to 13% of the current issued ordinary share capital ("Shares") if Market Access achieves earnings of at least £1 million (on the basis of earnings before interest, tax, depreciation and amortisation ("EBITDA")) in the 12-month period to 31 January 2019. The percentage of Shares issued will be scaled down pro rata in the event that Market Access achieves profitability of less than £1million EBITDA for this period.
MHC will be entitled to a further tranche of Shares up to a maximum of 4% per annum provided that Market Access earnings achieve at least £2.25 million EBITDA in each of the subsequent four years of operation prior to the fifth anniversary of this agreement. In the event that earnings do not achieve £2.25 million in any one year it will be entitled to a percentage of shares for that year up to 4% calculated on a pro rata basis and also by reference to a calculation of the groups other earnings. The number of shares which MHC can be allotted is limited to 4% in any year and 25% over the whole five- year period (the percentages of Shares are all calculated on the current issued share capital of the Company).
The Board believes that without any cash outlay the foreign exchange business will complement our existing businesses servicing both our internal needs and those of our corporate and personal customers.
Mark has significant sales experience, principally in FX companies such Travelex and Baydonhill (which was sold to Earthport PLC) and more recently has held a successful career consulting to several fintech and payments companies. It is expected that Mark will take up a senior executive role driving sales across the Company in due course.
The Company's suite of financial products positions us as one of very few fintech companies that can offer a true alternative to traditional banking. Customers can open accounts with IBANs in their names, send and receive money worldwide either on a peer to peer basis, via bank wire or even directly to any card issued by a recognised issuer, manage their foreign exchange and treasury needs all in one place.
The company has increased its banking network further within Europe and the Middle East, including with liquidity providers to support the Market Access business.
As reported previously the company is owed substantial sums by Phillite D UK Limited ("Philite"). This indebtedness has been reduced by payments in excess of £600,000 made by Phillite to the Company since the end of the financial year.
Lottery Division
Prize Provision Services celebrated its 1,000th weekly managed lottery draw on 19 February 2018 and is working hard to increase the number of societies it supports. The Lottery Division is operating in line with expectations; revenue was slightly higher than expected in the previous month, although this is offset with increased staff numbers supporting the Weather Lottery and the new website, sportsclublottery.com. The Sports Club Lottery website has been launched to help sports clubs of all sizes raise funds to increase participation in sport across Great Britain. Lottery profits represent 50% of lottery proceeds which compares favourably to competing lottery providers.
Corporate
The Company confirms that it continues in its search for the best candidate to perform the chief executive officer role for the Group.
For further information, contact:
Boxhill Technologies PLC 020 7493 9644
Lord Razzall, Executive Chairman
Website www.boxhillplc.com
Allenby Capital Limited (Nomad & Broker)
John Depasquale/Nick Harriss 020 3328 5656