eServGlobal Ltd enters FY18 with a reduced cost base and a fully funded balance sheet; we are forecasting the core business to be close to EBITDA break-even in FY18. With access to Mastercard’s sales force and financial institution customer base, HomeSend has signed up a number of banks to use its cross-border payment platform. As these banks shift volumes onto the platform, this should drive strong growth in volumes and move the joint venture towards profitability.
FY17 results – core business rightsized
FY17 was another year of restructuring within the core business, with poorly performing legacy contracts cleared out and the cost base reducing to a level that the company believes it can support with revenues from its existing customer base. Contracts worth €5m that the company was aiming to sign by the end of FY17 have been signed post year-end, providing support to the company’s target to reach break-even revenues of c €12.5m/A$19.4m in FY18. At this revenue level and excluding corporate costs, the core business should be able to generate EBITDA margins in the region of 20%, which could make this business a strategic target for a larger mobile software supplier.
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