TUNG.L Regulatory News (TUNG)

TUNGSTEN CORPORATION PLC 

("Tungsten" or the "Company")

PRELIMINARY RESULTS FOR THE FINANCIAL YEAR ENDED

30 APRIL 2015

London, 22 July 2015 - Tungsten Corporation plc (LSE:TUNG), the global electronic invoicing, analytics and financing company, today announces preliminary results for the year ended 30 April 2015 (FY15).

Group Financial and Operational Summary

· Group revenue up 19% at £23.1m vs. FY14 £10.8m (FY14 pro-forma1: £19.5m)

· Group EBITDA loss of £24.8m vs. FY14: £10.2m loss

· Group loss after tax of £27.0m vs. FY14: £11.0m loss

· Loss per share of 26.34p basic and diluted vs. FY14: 18.6p basic and diluted loss per share

· Group net cash and cash equivalents of £32.6m at 30 April 2015 (30 April 2014: £62.6m)

· Group balance sheet strengthened through two equity raisings: gross proceeds of £12m in September 2014 and £17.5m in May 2015

· Additional funding for invoice financing secured through agreement with Insight Investment

Rick Hurwitz, Chief Executive Officer, commented:

"Our leadership team is focused on establishing Tungsten as an indispensable partner to organisations in assisting them to optimise their accounts payable, procurement and working capital. Tungsten has made progress in its first full year of operations, growing our electronic invoicing network and securing maiden sales of our invoice financing solution, Tungsten Early Payment.

"As with any growing company, we are becoming smarter about our challenges, and with continued investment, hard work and a dedicated team we have transitioned into the execution phase. I look forward to leading the further expansion of our global Network to its users so they can benefit from our supply chain, financing and analytics solutions."

Key Performance Indicators

____________1 FY14 pro-forma includes Tungsten Network results for the year to 30 April 2014, including the period prior to acquisition

2 Includes 43 Workflow buyers from the acquisition on DocuSphere

3 Not statistically significant therefore not presented

Operating and Financial Summary 

Tungsten Network including Tungsten Analytics

· Growth in e-Invoicing Network with strong pipeline of new buyers and suppliers

· Total Network revenue of £23.0m vs. FY14 £10.8m, up 18% vs. FY14 pro-forma of £19.5m

· EBITDA loss of £5.1m (FY14: loss of £1.3m)

· 52 new buyers added to network, including 43 buyers using Tungsten Workflow; 173 total buyers at year-end (FY14: 124 total buyers)

· 28,000 new suppliers added to Network; 181,000 total suppliers at year-end (FY14: 168,000 total suppliers)

· 13.8m e-invoices transacted out of a total of 14.8m, up 10% (FY14: 12.5m e-invoices transacted out of £13.4m total)

· £103bn of value of e-invoices transacted out of a total of £121bn, up 8% (FY14: £89.4bn e-invoices transacted out of £103bn total)

· 47 compliant countries at year-end (FY14: 46 compliant countries)

· Initial roll-out of Tungsten Analytics with positive buyer feedback and continued product development; one contracted buyer

· Average savings identified by Tungsten Analytics of 1.6% on analysed spend

FY15 saw the Tungsten Network continue to grow organically while the acquisition of DocuSphere delivered a new client base and a new capability, Tungsten Workflow. New buyers during the year included some of the world's largest companies such as GE, Caterpillar, Siemens, Royal Caribbean and Honda Logistics North America, while existing buyers pledged more of their spend than ever before for the Tungsten Network. New product development and a simplified pricing structure also made it easier for suppliers to join the Network.

Tungsten Early Payment

· Total Early Payment revenue of £0.1m

· EBITDA loss of £12.7m (FY14: loss of £1.9m)

· Total invoice financing of £32m 

· Average yields of 4.5% for large corporates and 12.4% for SMEs

· Penetration rate of 6.6% for SMEs

· 188 suppliers requested Tungsten Early Payment with 38 suppliers approved and live

· Steps taken to improve and accelerate supplier financing processes

FY15 saw the launch of Tungsten Early Payment, funded by Tungsten Bank and latterly through an agreement arrangement with Insight Securities S.A. (Luxembourg securitisation vehicle known as IIFIG Securities S.A. since 17th July 2015) that enables it to selectively acquire individual invoice contracts. Although the product launch was delayed, the early adoption and feedback has been promising, with users electing to finance 79% of the value of eligible invoices. During the second half of the year we grew the number of buyers who are live with Invoice Status Service, which allows their suppliers to access Tungsten Early Payment, by 14%.

Analyst Presentation

Rick Hurwitz, Chief Executive Officer, and David Williams, Chief Financial Officer, will host a conference call for analysts and investors at 9.00am BST on 22 July 2015. A live webcast will be available at https://engage.vevent.com/rt/tungsten~20150722

For participants unable to join the webcast, the dial-in number for the conference call is 0800 376 7922 / +1 (866) 966 1396 with the passcode 86634704 and a presentation will be available on the Tungsten Corporation website at https://www.tungsten-network.com/uk/about-tungsten/investor-relations/financial-reports/financial-documents/

A replay facility will be available until 5 August 2015. The dial-in number for the replay facility is 0800 953 1533 /

+1 (866) 247 4222 with the passcode 86634704.

Enquiries:

About Tungsten Corporation plcTungsten Corporation (LSE: TUNG) accelerates global trade by enabling customers to streamline invoice processing, improve cash-flow management and make better buying decisions from their detailed spend data.

Buyer organisations that join Tungsten Network, the world's largest compliant electronic invoicing network, can reduce their invoice-processing costs by 60%. Suppliers benefit from efficiencies, greater visibility of their invoice status and peace of mind. Tungsten offers options for supply chain financing and helps buying organisations profit by applying real-time spend analytics to its vast repository of line-level invoice data.

Tungsten serves 56% of the Fortune 500 and 67% of the FTSE 100 by connecting the world's largest companies and government agencies to their thousands of suppliers around the globe. It enables suppliers to submit tax compliant e-Invoices in 47 countries, and last year processed transactions worth over $187bn for organisations such as Alliance Data, Aviva, Cargill, Deutsche Lufthansa, General Motors, GlaxoSmithKline, Henkel, IBM, Kellogg's, and the US Federal Government.

Contact: Juliana Wheeler, Head of Global Communications, +44 20 7280 7973.

juliana.wheeler@tungsten-network.com

Forward looking statements

This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading margins, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Tungsten as of the date of this statement. All written or oral forward-looking statements attributable to Tungsten are qualified by this caution. Tungsten does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Tungsten's expectations.

TUNGSTEN CORPORATION PLC

("Tungsten" or collectively the "Tungsten Group")

PRELIMINARY RESULTS FOR THE FINANCIAL YEAR ENDED

30 APRIL 2015

Chairman's statement

Financial year 2015 was a transitional one for Tungsten Corporation. We put the building blocks in place for our future and began to execute on our vision to accelerate global trade by enabling customers to streamline compliant invoice processing, improve cash-flow management, and make better buying decisions from their detailed spend data.

We began the year as a company beginning to execute on the previous year's vision of creating a company with three business lines. We ended the year with strong growth in Tungsten Network, welcoming the first customer to use Tungsten Analytics, and demonstrating that Tungsten Early Payment is an attractive source of funding to the supplier companies that are using it.

Growth in Tungsten Network, the most mature of our businesses, was strong, with new buyers and suppliers joining throughout the year, and with Tungsten increasing support to governments and public sector agencies with their process automation and tax compliance objectives.

The newer parts of our business, Tungsten Analytics and Tungsten Early Payment, were slower to take off than we had hoped, though the reception from customers using the services has been strong and gives us the confidence that these businesses will grow.

To support this growth, we successfully raised £17.5 million in an oversubscribed share placing after the financial year ended, which was supported by our largest shareholders. We were delighted with the continued support from these anchor investors. The funds will be used for the continued enhancement of Tungsten Network and Tungsten Early Payment, and to improve the ease of use and deliverability of these products to both existing and potential customers.

On behalf of the Board I would like to thank our shareholders for their support through this transitional year.

The Board

Our Board continued to evolve as the business entered an execution phase and moved on from the phase during which we built on our vision. Michael Spencer, Phil Ashdown and Jeffrey Belkin left the Board, all of who were instrumental in helping to build the company as we developed Tungsten. We welcome as a non-executive director Nick Parker, who also became Chairman of Tungsten Bank's Board, and David Williams, who I am pleased to say has stepped up to become an Executive Director as well as Chief Financial Officer.

The year ahead

I am delighted Richard Hurwitz is now Chief Executive, having demonstrated his strong ability to execute on a strategy and deliver results in his previous dual role as Chief Executive, Americas, and head of our buyer business. Rick's experience as CEO of Pictometry, a similar growth company, means he is the ideal person to assume the role at this time to execute on the strategy we have in place. I have worked closely with Rick since he joined the Board as an Executive Director during the financial year and I am looking forward to working more closely with him in his new role.

In addition, I am grateful to Edi Truell for his significant contribution to Tungsten as the Company's founder and Group CEO up until Rick's appointment. During this time he worked tirelessly and closely with the management team to build and develop the Company to where we are today.

We continue to develop Tungsten Analytics and Tungsten Early Payment and expect to welcome new customers to each of these services during the current financial year. We will do this by working with customers to find the most attractive proposition for Tungsten Analytics. We are streamlining our processes to make it easier for suppliers to enrol and use Tungsten Early Payment. We will continue to ensure Tungsten Network remains best in class for security and compliance; and look forward to welcoming new buyer and supplier organisations onto the Network as well as extending the scope of services to our considerable customer base.

I would also like to thank our employees for their hard work and dedication during the year.

Annual General Meeting

Our AGM will take place on 24 September 2015 at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA.

Arnold Hoevenaars

Group Non-Executive Chairman

Business review

FY15 was one in which Tungsten continued the evolution of its corporate strategy as it emerges to become a high-growth company. The Company continued the roll-out of its products and services and acquired Tungsten Bank and DocuSphere, and so reported an EBITDA loss for the year of £24.8 million, which was higher than the previous year (FY14: £10.2 million). Revenues for the year were £23.1 million, which were driven by increased revenues in the second half of the year as the addition of new buyers and suppliers on the Tungsten Network accelerated and streamlined pricing took effect. Administrative expenses were £49.9 million, which included £11.3 million of one-off costs associated with the growth and development of the business.

At 30 April 2015, the Group had cash balances of £32.6 million, which included £19.5 million of cash or cash equivalents held in Tungsten Bank. On 21 May 2015, after the financial year-end, we raised £17.5 million gross in a share placing to support our key priorities of the continued enhancement of our Network and Tungsten Early Payment, and improvements to the ease of use and deliverability of these services to existing and potential customers.

In order to deliver against these priorities, the net proceeds of the placing will provide Tungsten with the required capital to:

· Continue to invest in the Network to further improve the on-boarding process for suppliers, thereby maximising the supplier opportunity provided by the buyers on the Network;

· Increase the sales and marketing resources required to accelerate the penetration of Tungsten Early Payment;

· Invest in the required operational enhancements required to make it easier for suppliers to take advantage of Tungsten Early Payment; and

· Fund ongoing investment in product innovation for customers.

We have clear areas of strategic growth that will be our focus for the year ahead. These include:

Tungsten Network

· Increase the number of suppliers that are registered on Tungsten Network

· Increase the number of active buyers and suppliers that are connected through Tungsten Network

· Increase revenues from buyers on Tungsten Network, which will include the provision of Tungsten Analytics

Tungsten Early Payment

· Increase the number of suppliers that are signed-up for Tungsten Early Payment

· Increase the number of suppliers that are live for Tungsten Early Payment

· Increase the total value of invoices financed

· Optimise the gross yield achieved on purchased invoices

Tungsten Network

The Network, which is the key part of Tungsten's business, continued to add new buyers and suppliers during the year, with a total of 173 buyer groups at 30 April 2015, up from 124 a year earlier. Of those, 43 are buyers using Tungsten Workflow, a service added during the year through the DocuSphere acquisition. Three buyers left the Network during the year, one due to a corporate action and two that lacked sufficient scale.

During the year, 28,000 suppliers were added to the Network, while 18,000 suppliers that transact mostly in paper invoices ceased transacting over the Network, as we focused on transitioning the Network away from non e-I

Invoicing suppliers. As a result, at the end of the financial year the Network had 181,000 suppliers, an increase of 7.7% over the previous year. Momentum of supplier releases picked up in the second half of the year when buyers sent Tungsten 25% more suppliers to bring onto the Network than in the first half.

An important focus for us has been to offer a fuller product suite to buyer customers and improve the effectiveness of our approach to leveraging the existing buyers and suppliers on the Network. The rate at which suppliers connect to multiple buyers already on the Network has been encouraging. This helped increase the total e-Invoicing volume on the Network by 10% over the prior year to 13.8 million invoices out of a total of 14.8 million invoices transacted over the Network. The e-Invoicing value conducted over the Network grew by 8% to £103 billion, out of a total of £121 billion of transaction value.

The pipeline of new customers for the Network, both buyers and suppliers, remained strong. Growth is coming from buyers sending us additional supplier releases and from adding new buyers to the Network. During the year, we invested heavily in the on-boarding process and in how we price the Network for suppliers, which is improving the rates of new and multiple connections. Users continue to benefit from a network effect in which they connect to multiple customers on the Network. Suppliers have made over 8,000 new connections to buyers since a new service, Customer Connect, was launched in early April 2015. Customer Connect enables suppliers to find buyer customers already on the Network.

We are in the process of on-boarding the new buyers who became customers during the year. On-boarding includes connecting the buyers' ERP systems to the Tungsten Network, as well as inviting and bringing onto the Network their suppliers.

Tungsten Analytics, with real-time line level spend analysis, continues to receive positive feedback from buyer trialists. Tungsten is in negotiations about bundling e-Invoicing, Workflow and Analytics products into one combined package for buyers, which would support a considerably higher price point. These discussions will continue over the next three years as each buyer approaches contract renewal. We expect that this combined package will be well received by buyers, and should improve future revenues.

In addition, we continue to develop Tungsten Analytics functionality, following the previously announced formation of the Tungsten Centre for Intelligent Data Analysis in partnership with Goldsmiths University. We expect the output from this venture to take 18 months before it is realised.

Tungsten Early Payment

We launched Tungsten Early Payment in November 2014, nine months behind schedule in large part due to a six month delay in launching Tungsten Bank. In December 2014 we agreed an arrangement with IIFIG Securities S.A. to fund our Tungsten Early Payment business, which is sufficient to fund Tungsten Early Payment demand. As a result of this and following discussions with the Prudential Regulatory Authority ("PRA") about Tungsten Bank's governance following the departure of the Bank's CEO in April 2015, the Tungsten Bank Board decided in May 2015 not to take deposits for the time being. This will not impact the Company's invoice financing capacity.

At 30 April 2015, 188 suppliers had signed a contract to use Tungsten Early Payment, and 38 suppliers had completed the registration process to become a customer of Tungsten Early Payment. Total invoices financed were £32 million.

Tungsten's experience has shown our two distinct markets, large corporates and SMEs, have different average yields, with large corporate invoice financing having an average yield of 4.5% p.a. and SMEs having an average yield of 12.4% p.a. The penetration rate was 6.6% of SME suppliers targeted, while the penetration rate for large corporates may be higher but has a smaller population. Customers using Tungsten Early Payment finance repeatedly use the service, financing an average of 79% of the value of their available invoices.

Since launching Tungsten Early Payment in November 2014, we have determined that the sales and enrolment processes take longer than is desirable; require more sales people and marketing resources; and need a simpler supplier financing approval process to gain traction. As a result, we have increased our sales effort with Britt Lintner joining as Head of Supplier Sales, a new sales team structure in place and new sales people have been hired.

We have increased the marketing budget in the current financial year, and are simplifying and shortening the process for suppliers to be approved for Tungsten Early Payment, which currently takes several months before a supplier can finance their invoices. 

Invoice Status, which enables buyers and suppliers to see the approval status of an invoice and the payment date, must be in place with a buyer before its suppliers can use Early Payment. At the end of April, 42 buyers were live with Invoice Status, up from 37 at the mid-year.

Highlights post financial year-end

New CEO

As Tungsten executes on its strategy, the Company announced senior management changes at the time of our pre-close statement on 14 May 2015.

Richard M. Hurwitz is now CEO, reporting to the Board of Tungsten Corporation, effective 13 July 2015. He was previously Executive Director, CEO (Americas) and Head of Global Client Development. Edmund Truell, previously CEO, has moved to the newly created role of Vice Chairman.

This allows Edi to develop the wide range of strategic opportunities available to Tungsten, including enhancing the Group's relationships with major clients, providers of capital and strategic and joint venture partners, and driving the global roll-out, which will involve considerable international presence. In addition, in order to allow Edi to concentrate on these important strategic matters, Nick Parker, previously an Independent Non-Executive Director of Tungsten Bank plc, has replaced Edi as Non-Executive Chairman of Tungsten Bank and Edi has become Deputy Chairman of Tungsten Bank.

Outlook

Revenue is expected to grow over the course of the year, supported by increased numbers of suppliers using both Tungsten Network and Tungsten Early Payment; and by buyers using the full suite of Tungsten services including Analytics. We expect new products to accelerate the pace of adoption.

We expect to increase significantly the size and margin of Tungsten Network, working with our current buyer customers to transition more of their suppliers onto e-Invoicing on an increasingly global basis, and we expect to continue to attract more new multi-national buyers. Through the introduction of a revised pricing model for our buyers, supported by our Tungsten Analytics proposition, we expect to increase the profitability of our buyer customers.

In the early part of the current financial year we have focused particularly on developing the Tungsten Early Payment product, processes and sales force, as we have gained greater insight into the customer requirements. We expect to sign up more SMEs and large corporate suppliers for this product, although the mix of large vs smaller suppliers will determine the value of invoices financed and our return on this business.

Tungsten previously announced discussions about a proposed joint venture arrangement with a global financial institution and that we are actively exploring strategic options for Tungsten Bank. The discussions are ongoing.

We have been through a period of significant investment in our products and markets, incurring a number of one-off costs, such as professional services fees for Tungsten Bank and the invoice financing business. The majority of these have now been incurred and paid for. Further investment will be made to support growth, particularly in sales and marketing.

Rick Hurwitz

Chief Executive Officer

Edmund Truell

Vice Chairman

Chief Financial Officer Review

Highlights

· Revenue of £23.1 million (FY14 reported: £10.8 million) vs FY14 pro forma £19.5 million, an increased of 19%

· Completed acquisition of Tungsten Bank for £29.5 million and DocuSphere (now Tungsten Workflow) for $7 million (£4.3 million)

· Raised new equity of £12 million gross of transaction costs in September 2014 and a further £17.5 million after the year-end in May / June 2015

· Tungsten Group EBITDA loss of £24.8 million (FY14: loss of £10.2 million), including one-off costs of £11.3 million (FY14: n/a)

· Post-tax loss of £27.0 million (FY14: £11.0 million)

Group trading performance

The year to 30 April 2015 was a year of growth and transformation for Tungsten and a period in which we completed two acquisitions, launched our Tungsten Early Payment product and continued the expansion of our e-Invoicing network.

On 10 June 2014, Tungsten completed the acquisition of FIBI Bank (UK) plc (subsequently renamed Tungsten Bank plc). The total consideration of £29.5 million was paid, of which £25.4 million was paid in the period. £1 million of this will be held in escrow for 18 months.

On 9 September 2014 Tungsten acquired Image Integration Systems, Inc ('DocuSphere'), now renamed Tungsten Workflow. Consideration of $6.5 million (£4.0 million) was settled in cash with deferred consideration of $500,000 (£313,000) payable after 18 months. The Group raised new equity of £12 million gross of costs to fund the acquisition and other business expansion activities.

In November 2014 Tungsten launched Tungsten Early Payment, a product that allows suppliers transacting on our e-Invoicing network to take early payment on approved invoices.

In addition to our acquisitions we continued our significant investment in people and infrastructure in FY15. We spent £11.3 million on the one-off costs of acquisition, development of our Tungsten Early Payment product and systems, e-Invoicing product enhancements and restructuring. We expect our investments in these areas to significantly decrease in FY16.

At 30 April 2015, the Group had cash and cash equivalent balances of £32.6 million (30 April 2014: £62.6 million). This included £1.0 million of cash equivalents held by Tungsten Bank not previously reported with the cash balance. In May 2015, we raised an additional £17.5 million of new equity, gross of transaction costs.

Group revenue in FY15 grew 19% to £23.1 million from £19.5 million on a proforma basis. Tungsten Network contributed £23.0 million of total revenue, with the balance of £120,000 from Tungsten Network Finance.

Tungsten Group EBITDA loss for the year to 30 April 2015 was £24.8 million (FY14: £10.2 million).

Tungsten Network

Revenue for Tungsten Network for FY15 was £23.0 million (FY14 reported: £10.8m) an increase of 18% over FY14 pro forma of £19.5 million. Tungsten Network revenue in the period includes Tungsten Workflow revenue of £1.9 million. Excluding Tungsten Workflow, Tungsten Network's revenue grew by £1.7 million (9%).

In FY15, 11 buyers were signed up to the e-Invoicing Network. The proportion of total Tungsten Network revenue from our Buyer customers increased from 37% in FY14 to 43% in FY15, in part as a result of the inclusion of Tungsten Workflow revenue.

Buyer revenue in FY15 of includes set-up fees of £0.9 million, Tungsten Workflow fees of £1.9 million and annual licence fees / transaction fees of £6.9 million. Three buyers left Tungsten Network during the year. These buyers had previously contributed minimal revenue.

Supplier revenue includes annual licence fees / transaction fees from suppliers using our integrated product and transaction fees from suppliers using our portal product ("Web Form"). During FY15 we changed the pricing structure for our Web Form suppliers so that each supplier receives 52 free transactions per year, with a higher per-transaction fee charged above that level. On a net basis this change did not materially impact our supplier revenue in FY15.

Tungsten Network EBITDA loss of £5.1 million (FY14: £1.3 million loss) reflects in part the increase in headcount, notably in the introduction of Client Relationship Managers to drive the development of our buyer relationships. We expect further headcount increases over FY16 to support additional customer acquisitions and their associated implementation.

The Tungsten Network FY15 EBITDA loss of £5.1 million includes one-off costs of approximately £2.8 million.

Tungsten Network Finance

Tungsten Network Finance, which includes Tungsten Early Payment and Tungsten Bank, earned £120,000 of revenue in FY15. This reflects the amount recognised in the period for the difference between the price paid to a customer for the purchase price of an invoice and the face value of the invoice (the "Gross Yield").

The significant majority of invoices purchased by Tungsten Network Finance in FY15 were sold to Tungsten Bank plc. In FY16 we expect a greater proportion of invoices to be sold made available to IIFIG Securities S.A. Revenue from IIFIG Securities S.A. will be recognised in the form of a fee calculated as a percentage of the Gross Yield, with that percentage varying depending on the Gross Yield.

Tungsten Network Finance incurred costs totalling £12.8 million in FY15 (FY14: £1.9 million). This includes one-off costs totalling £6.4 million, including regulatory costs, costs of the development of policies and procedures, software development and staffing costs. The majority of the underlying FY15 Tungsten Network Finance cost base was payroll costs. Tungsten Network Finance employed 45 people as at 30 April 2015.

Corporate

The FY15 Corporate EBITDA loss totalled £7.0 million (FY14: £7.0 million). This included £2.1 million of one-off costs, relating to restructuring and to the acquisitions of Tungsten Bank and DocuSphere.

The underlying Corporate EBITDA loss of £4.9 million reflects the Board, Group management and Group costs (including marketing, head office, AIM related costs).

Balance sheet

Non-current assets increased over FY15 by a net amount of £15.0 million to £130.9 million, driven by the acquisitions of Tungsten Bank (£10.1 million) and DocuSphere (£5.1 million).

The Group capitalised software costs of £0.3 million in FY15 (FY14: £0.3 million).

The Group capitalised £0.5 million of costs associated with the continued development of our head office, Pountney Hill House, which houses Tungsten Corporation, Tungsten Network Finance and the operation of Tungsten Network London.

Total current assets decreased by £25.2 million over FY15 to £47.4 million. This was primarily due to the decrease in cash and cash equivalents from £62.6 million to £32.6 million over FY15. £32.6 million represented £13.1 million of cash resources held outside of Tungsten Bank plc and available to the Group. The balance of £19.5 million represented cash or cash equivalent items held by Tungsten Bank plc and not available to the Group.

The increase in current assets also included an increase of £1.6 million in trade receivables. We expect trade receivables to decrease over FY16 as a result of the impact of changing the payment terms with the majority of our supplier customers.

At 30 April 2015 the Group held £6.4 million of invoice receivables, representing invoices purchased through our Tungsten Early Payments product.

Current liabilities increased by £2.7 million in FY15 to £17.3 million. This includes a decrease in trade and other payables of £1.9 million and an increase in deferred income balances of £0.8 million.

Cash flow

Cash outflow from operating activities increased to £31.6 million in FY15 (FY14: £8.1 m), reflecting the EBITDA loss of £24.8 million and the acquisition of £6.4 million of Tungsten Early Payment invoice receivables.

Net cash inflow from financing activities of £11.8 million, representing the issue of additional share capital, was primarily used to fund the acquisition of Tungsten Bank plc, DocuSphere and other fixed assets totalling £10.6 million.

Liquidity and going concern

At 30 April 2015, the Group had cash on hand and short-term deposits of £32.6 million. £13.1 million of this was freely available to the Group. On 21 May 2015 the Group raised additional gross equity of £17.5 million. The Group has no borrowings.

We expect to have sufficient cash resources to fund the committed activities of the Group for at least 12 months from the date of these financial statements.

The Group's forecasts and projections, taking account of reasonably possible changes in trading performance and the timing of the growth in Tungsten Network Finance, show that the Group has sufficient liquidity to fund its committed expenditure. Accordingly, the Group continues to adopt the going concern basis.

David Williams

Chief Financial Officer

Consolidated income statement

Consolidated statement of comprehensive income

Items in the statement above are disclosed net of tax.

Consolidated statement of financial position

Consolidated statement of changes in equity

Year ended 30 April 2014

Consolidated statement of cash flows

Notes to the preliminary results for the financial year ended 30 April 2015

1. General information

Tungsten Corporation plc (the Company) and its subsidiaries (together, the Group) is a global e-Invoicing network that offers supply chain financing and spend analytics.

The Company is a public limited company, which is incorporated and domiciled in the UK. The address of its registered office is Pountney Hill House, 6 Laurence Pountney Hill, London, EC4R 0BL, UK.

2. Accounting policies

The preliminary announcement for the year ended 30 April 2015 was approved by the Board of Directors on 21 July 2015. The financial information set out above does not constitute the Group's statutory accounts for the year ended 30 April 2015 but is derived from those accounts.

The Group's results have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

3. Segment report

Management have determined the operating segments based on the operating reports reviewed by the Board of Directors that are used to assess both performance and strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker (CODM).

The Board of Directors reviews financial information for three segments: Tungsten Network (which includes the e-Invoicing and spend analytics business of Tungsten Network), Tungsten Network Finance (which includes the supply chain finance business Tungsten Network Finance and Tungsten Bank) and Corporate (which includes overheads and general corporate costs). Intersegment revenue from management fees is eliminated below.

1EBITDA is calculated as earnings before interest, tax, depreciation and amortisation.

Year ended 30 April 2014

Geographical information

The Group's revenue from external customers and non-current assets by geographical location is detailed below.

Revenue by geographical location is allocated based on the location in which the sale originated.

Non-current assets are allocated based on the geographical location of those assets and exclude other financial assets, loans receivables and deferred tax.

4. Income Taxation

Income tax comprises the following:

The standard rate of Corporation Tax in the UK changed from 23% to 21% with effect from 1 April 2014 and changed to 20% with effect from 1 April 2015.

Deferred tax

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is considered more likely than not. The Group has unrecognised deferred tax assets of £17.8m (2014: £12.9m) in respect of losses that can be carried forward against future taxable income for the period between one year and an indefinite period of time.

5. Loss per share

Basic loss per share is calculated by dividing the loss attributable to the ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

EPS may be subject to future dilution as a result of the issue of shares pursuant to the LTIP Securities and SAYE Scheme.

6. Intangible assets

Year ended 30 April 2014

Impairment testing is carried out at cash generating unit (CGU) level on an annual basis. The following is a summary of the goodwill allocation for each reporting segment:

The Group estimates the recoverable amount of a CGU using a value-in-use model by projecting cash flows for the next five years together with a terminal value using a growth rate. The five-year plans used in the impairment models are based on Board approved budgets and management's past experience and future expectations of performance. The cash flow projections are based on the following key assumptions:

Tungsten Network

· Revenue growth from buyers and suppliers using the Tungsten Network, including Tungsten Workflow and Tungsten Analytics at a compound annual growth rate of 19.3%

· Pre-tax discount rate of 11.6% (FY14: 12.5%), being based on the Group's weighted average cost of capital (WACC)

· Growth rate used in the annuity of 2.0% (FY14: 2.0%). This does not exceed the long-term economic average growth of the territories that the Group operates in

Tungsten Bank

· The build-up of a customer deposit base to £110 million

· Pre-tax discount rate of 15.7% (FY14: n/a), being based on Tungsten Bank's weighted average cost of capital (WACC)

· Growth rate used in the annuity of 2.0% (FY14: n/a). This does not exceed the long-term economic average growth of the territories that the Group operates in

Based on the above assumptions, Tungsten Network exceeded the carrying value of the CGU by £143.7million (FY14: £54.0 million) and Tungsten Bank exceeded the carrying value of the CGU by £0.6 million (FY14: n/a).

Sensitivity to changes in key assumptions

The recoverable amount of the Tungsten Network CGU was particularly sensitive to changes in the increase in the number of suppliers, the increase in revenue from existing buyers and the pre-tax discount rate. The values assigned to the buyer and supplier assumptions in the models are an increase in revenue from existing buyers of 61% and an increase in the number of new suppliers on the Network by 246,000 over the period of the model. Whilst the Directors are confident in the assumptions used in the impairment models, reasonably possible changes in these assumptions could result in the carrying value of the CGU exceeding its recoverable amount. Assuming that there is no increase in revenue from existing buyers, a reduction in the number of new suppliers of 21% and an increase in the pre-tax discount rate to 14.4% the recoverable amount would equal the carrying value of the CGU.

The recoverable amount of the Tungsten Bank CGU was particularly sensitive to changes in the level of customer deposits and the pre-tax discount rate. Whilst the Directors are confident in the assumptions used in the impairment models, any change in these assumptions would result in the carrying value of the CGU exceeding its recoverable amount.

7. Property, plant and equipment

Year ended 30 April 2014

8. Trade and other receivables

Non-current assets

Current assets