Don't worry about Tungsten's (TUNG) half-year loss. That, says chief executive Edmund Truell, reflects the fact that the investment vehicle is "spending tons of money" building the business after having snapped up the world's largest cloud-based e-invoicing platform, OB10.
That deal was financed with the proceeds of October's Aim flotation. As the cost benefits of e-invoicing are increasingly recognised, it's an area that's growing fast. For example, Tungsten presently boasts 127 blue-chip and government customers and the OB10 platform processed £109bn-worth of invoices in the year to 31 December - a 12 per cent year-on-year rise. International acceptance of e-invoicing is growing, too, with nations such as Brazil, Russia and India in the process of passing legislation for e-document recognition. Increased government demand should also provide boost. By 2016, all European Union public procurement should be performed electronically.
Tungsten is making progress with providing invoice financing, too. Specifically, it's working with Blackstone Tactical Opportunities to establish a special purpose financing vehicle with an annual funding capacity of $10-12bn (£6.1bn-£7.3bn). It's also seeking UK regulatory approval to buy the UK arm of First International Bank of Israel. In America, meanwhile, Tungsten has teamed up with a top 10 US bank.
TUNGSTEN CORPORATION (TUNG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 259p | MARKET VALUE: | £256m | |
| TOUCH: | 258-260p | 12-MONTH HIGH: | 270p | LOW: 220p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 175p* | NET CASH: | £75.4m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | nil | -9.0 | -78.5 | nil |
| 2013 | 829 | -5.5 | -29.0 | nil |
| % change | - | - | - | - |
Ex-div:- Payment:- *Includes intangible assets of £114m, or 114p a share | ||||
