Tungsten Corporation (LON:TUNG) remains in its investment phase as it builds out its e-invoicing and related services. However, a little over a year since the appointment of Rick Hurwitz as CEO, there are real signs of operational progress with price increases, greater focus underlined by the expected sale of Tungsten Bank, and reorganisation and technology investment to achieve efficiencies.
This should help deliver operational gearing and a move into EBITDA profitability during CY17 as Tungsten capitalises on the growth potential in the e-invoicing and related markets.
AGM update
In its recent AGM update Tungsten confirmed that the current financial year has started well and that it has continued to implement its strategic plan involving greater focus, operational improvements, relaunching invoice financing and developing related services. The sale of Tungsten Bank is still on track for completion shortly and it will release significant cash to support the group on the path to profitability and cash generation. Importantly, the process of negotiating higher prices as contracts for e-invoicing renew has continued and, in FY16, 34 buyer contracts were renewed with a weighted average increase of 64%. This process has continued in the first quarter of FY17. Progress is being made on cost reductions, while investment in technology is also being made to secure further efficiencies that should have increasing benefits as volumes rise.
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