Tungsten Corporation operates a transaction platform with services including e-invoicing, e-billing and purchase order handling. Spending analysis, invoice data capture and, through a partnership, supply chain finance are also offered, providing additional benefits to customers.
Tungsten H121 results announced in December showed a COVID-19 affected 6% fall in transaction volume vs H120 but the stability of recurring income meant group revenue (£18m) was down just 1%. Adjusted EBITDA at £0.8m was down £0.2m. A further non-cash goodwill impairment (£26.2m) was taken against the core Tungsten Network business, reflecting the negative effect of the pandemic on trading and the time taken to sign up new customers. As a result the pre-tax loss was £30.5m (vs £2.4m). Period-end net cash stood at £1m (£1m) with £2m available on a rolling credit facility.
The diversity of Tungsten’s customer mix and presence of over 50% of subscription and software maintenance revenues is supportive. New contracts added in FY21 include the first for a customer using Total AR, AP and Workflow products together. A partnership with a large US bank has been secured and the trade finance partnership with Orbian is generating income. For FY21 management guides to maintained revenues and adjusted EBITDA of at least £3.2m. In March the phased withdrawal of a customer accounting for 5% of revenue was reported but the company is working to replace the lost income. Longer term, the benefits of adopting e-invoicing provide an underlying driver of growth.