Interim results to 30 April June 2017

Transcription

1 Interim results to 30 April 2017 June 2017

2 Presenting team John Conoley Executive Chairman 30+ years experience across a variety of industry and private equity roles including positions at IBM, Psion and Eon. General management and directorlevel roles in small & medium-sized private and public companies. Director of HomeSend Andrew Hayward Chief Financial Officer Experienced finance executive with senior strategic advisory and investor relations experience Key strategic direction and governance of the business Previous fundraising and M&A advisory experience James Hume Chief Operating Officer 15+ years industry experience delivering commercial enterprise software for telco & financial services Customer facing roles in various international markets to deliver strategic & dynamic technology solutions Director of HomeSend 2

3 Introduction On the point of significant sales expansion within HomeSend Live transactions with KEB Hana Bank have started to flow Advanced negotiations with larger banks Proof of concept ongoing with traction in North America Identified further routes to market as well e.g. e-commerce Loan 2.5m further loan taken from Lombard Odier Further re-structuring of the business to create a more appropriate and long term structure General working capital Core business Further refinement of the core business to streamline costs Support the return to breakeven in the short term 3

4 Driving the digitalization of money movements by connecting the world in a way that is safe, convenient and cost-effective. International Payments JV 4

5 Achievements since the last capital raise Accelerating into a maturing business Since 2016 fundraise Several other banks already signed One of Asia s largest banks already sending live transactions Improved addressable market size from a market of over $600 billion* to c.us$22 trillion** Sufficient opportunity has been generated to reach break even point HomeSend has become the cross border capability for Mastercard Send Contract negotiations ongoing with multiple global opportunities Up to 2016 fundraise A fast-growing start-up Targeting Money Transfer Operators ( MTOs ) to take a commission from a market of over US$600 billion* Huge structural progress Payment Institution license, data centre upgrades & interconnectivity, Security (PCI), integration with Mastercard Send Connectivity to over 1bn bank accounts, mobile wallets, etc. * Source: **Source: BCG Global Payments Model (2014), quoted in SIBOS 2014 session 5

6 Core Business Connect to tomorrow 6

7 Innovative Mobile Financial Technology At a glance 150 staff 30+ years experience Global customer footprint Refreshed and growing product portfolio FY2016 saw the launch of new and complementary products within the landscape of digital payments. Channel-ready platform PayMobile 3 elastic deployment capabilities. Sales Team Restart well underway and gaining traction Global footprint Legend Countries with services deployed 7

8 Core business Significant cost savings when PLC / Group related costs removed these include support functions, board costs and listing costs Demonstrable value in the medium term FY17 1H17 Actuals FY17* 14 months Forecast FY18* 12 months Forecast M M M Revenue Total Costs (7.8) (18.5) (15.0) Operating EBITDA (3.6) (3.5) Estimated PLC / Group costs Adjusted EBITDA (2.0) * Management Information data Total Costs excludes impact of HomeSend equity losses, WIP and debtor provisions included within the interim financial statements 8

9 Trading update and forecast Continued streamlining of the core Year to date total costs of for the first half are 30% ( 3.4m) below the same period in 2016 Annualised costs for the second six months to October 2017 expected to be below 16.0m Cost expectation for the 14 months period to December 2017 of c. 18.5m FY18 costs forecast to be 15.0m m Diversified pipeline - over one third of the current pipeline is now from outside the Middle East concentration 9

10 Current Trading Restructuring of the business Pipeline development Timing issues due to be recovered in the second half FY17 FY16 1H17 Actual 6 months 12 months M M Revenue Cost of sales (5.0)* (9.7) Gross profit (0.9) 3.8 Operating Costs (7.3)** (10.7) EBITDA (8.2) (6.9) Loss for the period (10.2) (13.6) * Includes one off adjustments of 1.4m related to WIP provisions ** Includes one off adjustment of 1.9m related to debtor provisions Interim balances translated from AUD at a AUD/Euro rate of Prior year end balances translated from AUD at AUD/Euro rate of

11 Summary 11

12 Forward outlook HomeSend foresees significant sales expansion and expects to become profitable in the near future HomeSend is in detailed discussions regarding larger opportunities with new partners Board anticipates the potential value of this investment to significantly increase compared to previous expectations Further cost cutting measures in core business being taken to bring breakeven point down Geographical diversity of improving pipeline At a proforma level (ie excluding PLC and Group costs) of profitability 12

13 THANK YOU For further info: eservglobal.com/investors Subscribe to all company updates at: eservglobal.com/investors/news 13

14 Appendix 14

15 Board Members John Conoley Andrew Hayward Stephen Baldwin Tom Rowe Executive Chairman CFO & Executive Director Non-executive Director Non-executive Director 30+ years experience across a variety of industry and private equity roles including positions at IBM, Psion and Eon. General management and director-level roles in small & medium-sized private and public companies. Director of HomeSend Experienced finance executive with senior strategic advisory and investor relations experience Key strategic direction and governance of the business Previous fundraising and M&A advisory experience Chartered accountant with 30+ yrs experience in business and fund management including roles at Price Waterhouse, Hambro-Grantham & Colonial First State. Extensive Board experience across multiple industries. Advisor to one of Australia s larger superannuation funds on their global private equity program. Corporate Lawyer practising in Sydney with 10+ years experience in mergers & acquisitions, capital raising and corporate governance. Holds a BA and LLB (Hons) and Graduate Diplomas in Applied Finance and Investment and in Corporate Governance. 15

16 A business of two halves Dual-listing on Australian Securities Exchange and AIM (London Stock Exchange) JOINT VENTURE MasterCard, & BICS Global payments hub enables crossborder money transfer between mobile money accounts, payment cards, bank accounts or cash outlets from anywhere. CORE BUSINESS Innovative financial technology solutions for developing markets. Mobile payments, Recharge, Data Analytics and Consulting. has two seats on the HomeSend Board: John Conoley, Executive Chairman James Hume, COO 35% Ownership 100% Ownership Synergy Sales 16

17 HomeSend The Network Effect PSP / Agents Banks MTOs Any partner connected to the HomeSend hub offers their customer access to any other connected party, including bank accounts, mobile wallets, cards and digital wallets Aggregators E-Wallet/ Disbursers MNOs Other Card Networks MNO = Mobile Network Operator MTO = Money Transfer Organisation PSP = Payment Service Provider Direct HomeSend customers 17

18 Mastercard Send. Domestic and cross border services Mastercard Send for cross border leverages HomeSend s platform to expand global reach and capabilities A robust, innovative and cost effective solution that adds value to a Bank s cross-border services. Single Connection, Predictable Delivery and Transparent Pricing Faster Coverage in 80 countries Faster settlement Quicker availability of funds Predictable timing Better Amount expected is the amount received Consistency enforced by network rules Secure and authenticated with payments expertise Sending bank controls the pricing and the branding Cheaper Less expensive for payer Competitive FX No bene deduct Operational efficiencies 18

19 Refreshed and growing product suite DIGITAL WALLET SERVICES RECHARGE CROSS-BORDER PAYMENTS SERVICES PLATFORM BUSINESS ANALYTICS TELCO ACCESS CHANNELS CONSULTING 19

20 Revenue Model sells software on a traditional licence model, generating revenue from licence sales, support fees and professional services: Type of revenue New customers: Licence, professional services Description New customer licence fee : Licensing capacity metrics include number of subscribers, transaction traffic and number of agents or retailers Implementation and integration services for new customers and upgrades for existing customers Third party hardware and software Support / Recurring Renewal rates exceed 95%+ Support priced at % of net licence fee Existing customers: Licence extensions, upgrades & upsell opportunities Licence upgrades generated from capacity upgrades and additional modules Upgrade projects for additional modules and services 20

21 Customer life cycle A typical customer lifecycle includes several upsell and cross sell opportunities CUSTOMER EVENTS Customer chooses for project Solution live and provides support as per contract Customer s subscriber numbers double, exceeding their license After X years of operation, the platform needs to be upgraded As the market matures, customer wants to add new features eg. Micro Finance ESERVGLOBAL MILESTONE Project start phase Project live REVENUE RECOGNISED 21