Tungsten Revenues Up, Sells Bank, and Gets TrustWeaver Accreditation

Tungsten was in the news last week, as the leading eInvoicing and supply chain finance firm announced half year results, including the sale of Tungsten Bank.  (OK, our picture is of the Bank of England, but you get the idea). The acquisition of FIBI bank was originally seen by founder Edi Truell as an important part of the jigsaw, enabling Tungsten to fund the supply chain finance offering to clients using their own resources (i.e. the bank deposits).

But it became clear that there are plenty of other sources of such funding, and Tungsten successfully got a number of those lined up to support the business, whilst the regulatory and management costs of owning and running a bank proved a greater burden than expected. So the bank has been sold for some £30 million, which is about what Tungsten paid for it back in early 2014.

The half year results contained some further promising features, with revenue growth of 28% at £13.1 million looking particularly impressive, 500 new “integrated supplier customers”, a 10% increase in eInvoicing volumes to 7.5m and a 14% increase in associated value.

However, the EBTIDA loss was still high at £9.5 million, although that should now fall with the sale of the bank and a focus on establishing sustainable pricing; the firm “negotiated renewals with 14 buyer customers to deliver future price increases averaging 70% as customers recognise the increasing value they derive from Tungsten”. That is key; supply chain financing revenues have been slower than expected to come through, although they are growing, so the core eInvoicing business does need to make money, we’d suggest.

The share price barely responded to the results, which suggests that they met expectations; Tungsten will be hoping that 28% growth can be maintained or further accelerated, and shareholders will hope that the shares will get back on an upward track in 2016 after a very disappointing 2015.

Another positive reported last week by the firm saw TrustWeaver, a leading provider of cloud-based document compliance solutions, awarding the first ever TrustWeaver-Verified Trust Mark to Tungsten Network. The TrustWeaver-Verified programme helps businesses better understand the varieties of tax compliance covered by a third party operator’s services. Tax regulation, and the many requirements that stem from value-added-tax (VAT), cover a variety of invoicing and accounting functions.

“TrustWeaver recognised a lack of market transparency over which vendors are taking responsibility for different aspects of compliance. Given the costs and risks involved in tax compliance, going above and beyond to invest in compliance is an important differentiator for e-invoicing vendors, and so TrustWeaver has developed criteria that publicly declares the standards a company meets”.

Lucy Ashdown, Head of Network Compliance at Tungsten Network, said, “Tungsten has invested heavily over the years to ensure we are compliant across many legal areas, and we’re pleased to be leading the industry on this and forging a path with TrustWeaver to take compliance – and our clients – to the next level. Compliance is particularly critical for invoice-based FinTech services, where automation is everything. With Tungsten being awarded this inaugural Trust Mark, our customers can be assured that VAT compliance and all this entails is a significant priority of ours, and a responsibility we do not take on lightly.”

I can’t pretend to understand all the nuances of this – I guess what it says is that Tungsten take the tax implications of eInvoicing very seriously, which is at the very least reassuring for clients and potential clients!

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