Tungsten releases trading update
Tungsten has released a trading update for the financial year ended 30-Apr-15 ahead of its final results which are scheduled to be announced on 22-Jul.Improved revenues and better cost improvement lead to the company stating that it expects to exceed its own forecasts and market expectations. It has continued to roll-out products and services and adding new buyer and suppliers, with a total of 173 buyer group at the end of the period, up from 124.An important focus has been to improve the effectiveness of its approach to leveraging existing customers, and its pipeline of new customers is stronger than ever.Tungsten Bank has made a promising start and roll-out of Tungsten Early Payment is now on track.Tungsten's cash position at 30 April 2015 was GBP31.4 million, including GBP18.6 million of cash or cash equivalents held in Tungsten Bank. The Tungsten Board is reviewing various proposals to fund the the Company's growth strategy and will update the market as these materialise.
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Tungsten Corporation PLC

14 May 2015

TUNGSTEN CORPORATION PLC

("Tungsten" or the "Company")

For Immediate Release

Pre-close trading update

London, 14 May 2015 - Tungsten Corporation plc (LSE:TUNG), the global electronic invoicing, analytics and financing company, today announces the following trading update for the financial year ended 30 April 2015, ahead of its final results announcement due on 22 July 2015.

Unaudited preliminary results

Tungsten expects the unaudited financial results for the financial year to be above the Board's expectations at the time of the announcement of the Company's interim results, as the Company continues the global roll-out of its products and services. Revenues for the second half of the year are expected to be higher than budget and show good progress compared with the first half of the year, driven by accelerating the addition of new buyers and suppliers on the Tungsten Network. As a result, full year revenues are anticipated to be ahead of the market's expectation of GBP22.5 million. The higher revenues, combined with lower than forecast costs in the second half of the year, are expected to result in a smaller loss for the full year than the market's expectation of GBP31.2 million.

Tungsten Network

The Network has continued to add new buyers and suppliers, with a total of 173 buyer groups at 30 April 2015, up from 124 a year earlier, of which 43 are buyers using Tungsten Workflow, a service added during the year through the DocuSphere acquisition. Three buyers left the Network during the year, one of which was due to a corporate action and two which lacked scale.

During the year, 28,000 suppliers were added to the Network, while 18,000 mostly paper invoice suppliers ceased transacting over the Network as management focused on transitioning the Network away from non e-invoicing suppliers. As a result, at the end of the financial year the Network had 181,000 suppliers. Momentum of supplier releases picked up in the second half of the year when buyers sent Tungsten 25% more suppliers to bring onto the Network than in the first half.

An important focus for the Company has been to improve the effectiveness of its approach to leveraging the existing buyers and suppliers on the Network, and the rate at which suppliers connect to multiple buyers already on the Network has been encouraging. This has helped increase the total e-invoicing volume on the Network by 10% over the prior year to 13.8 million invoices out of a total of 14.8 million invoices transacted over the Network. E-invoicing value conducted over the Network grew by 8% to GBP103 billion, out of a total of GBP121 billion.

The pipeline of new customers for the Network, both buyers and suppliers, is stronger than ever. Growth is coming from buyers sending the Company additional supplier releases and from adding new buyers to the Network. During the year, the Company invested heavily in the on-boarding process and pricing for suppliers, which is improving the conversion rate of new connection opportunities. The new Customer Connect service, which enables suppliers to find additional customers already transacting on the Network, has already added over 3,700 new connections since its launch at the beginning of April.

Tungsten Bank and Tungsten Early Payment

Tungsten Bank has made a promising start and the roll-out of Tungsten Early Payment is now on track. The Tungsten Bank Board decided last week not to take deposits for now. It will not impact the Company's invoice financing capacity, since the Insight Investment arrangements and the Bank's balance sheet are sufficient to fund Tungsten Early Payment demand.

By 30 April 2015, 188 suppliers had signed a contract to use Tungsten Early Payment, and 38 suppliers had completed the registration process to become a customer of Tungsten Early Payment. Total invoices financed was GBP32 million.

Tungsten's experience has shown the two distinct markets, large corporates and SMEs, have different average yields, with large corporate invoice financing having an average yield of 4.5% p.a. and SMEs having an average yield of 12.4% p.a. The penetration rate was 6.6% of SME suppliers targeted, while the penetration rate for large corporates may be higher but has a smaller population. Customers using Tungsten Early Payment finance repeatedly use the service, financing an average of 79% of the value of their available invoices.

Since launching Tungsten Early Payment at the end of last year, we have determined that the sales and enrolment processes take longer than desireable; require more sales people and marketing resources; and need a simpler supplier financing approval process to gain traction. We have hired Early Payment sales people, plan to increase the marketing budget in the current financial year, and are simplifying and shortening the process for suppliers to be approved for Tungsten Early Payment, which currently takes several months before a supplier is allowed to finance their invoices.

At year-end, 42 buyers were signed up for the standard Tungsten Invoice Status Service, up from 37 at the mid-year. A key product enhancement now being offered to buyers is the full Invoice Status, which enables any and all of the invoices received by a buyer to be presented on the Tungsten Portal. This means suppliers, even if they have not yet connected to the Tungsten Network, can see the status of their invoices sent to their Tungsten Network buyers. It will also enable Tungsten to provide Tungsten Early Payment to suppliers who are not yet connected to the Tungsten Network. Seven buyers have already signed up for the full Invoice Status, which when fully deployed would increase the addressable market for Tungsten Early Payment fivefold.

We expect these changes to impact financing volumes positively and anticipate the benefit of this will be seen in the current financial year.

Tungsten Analytics

Tungsten Analytics, with real-time line level spend analysis, continues to receive positive feedback from potential buyer customers. The average savings identified in current trials are 1.6% of the spend analysed. At the end of April 2015, the first buyer to trial analytics had contracted for the service and a further 40 were taking part in pilot programmes. The Company is in negotiations with these pilot buyers and with new buyers about bundling Tungsten's e-invoicing, Workflow and Analytics products into one combined package for our buyers, which would support a considerably higher price point. These discussions will continue over the next three years as each buyer approaches renewal. We expect that this combined package will be well received by buyers, and should improve future revenues.

In addition, Tungsten continues to develop Tungsten Analytics, following the previously announced formation of the Tungsten Centre for Intelligent Data Analysis in partnership with Goldsmiths College.

Strategy for international network expansion and banking growth

The Company intends to continue to invest in its businesses, in terms of improved products and services as well as geographical expansion. Recent discussions between Tungsten and the Indian government resulted in a change to legislation to open up the Indian market to e-invoicing. In addition, Tungsten can now provide compliant e-invoicing services in Japan. To capitalise on these markets now being open to Tungsten providing electronic invoicing, the Company intends to grow with locally staffed offices, with local sales and support functions.

As Tungsten sees increased opportunities in markets such as Japan, Asia, Latin America and Eastern Europe, the supply chain finance offering in these markets is better served by Tungsten operating in partnership with local banks, which are being actively explored.

Funding

Tungsten's cash position at 30 April 2015 was GBP31.4 million, including GBP18.6 million of cash or cash equivalents held in Tungsten Bank. The Tungsten Board is reviewing various proposals to fund the the Company's growth strategy and will update the market as these materialise.

Board and executive appointments

As Tungsten moves beyond its start up phase and executes on its strategy, the Company is making the following senior executive management changes.

Edmund Truell, currently Group CEO, moves to the newly created role of Vice Chairman and Richard M. Hurwitz, currently Executive Director, CEO (Americas) and Head of Global Client Development, is appointed Group CEO reporting to the Board of Tungsten Corporation, effective 13 July 2015.

These changes allow Edi to develop the wide range of strategic opportunities available to Tungsten, including enhancing the Group's relationships with major clients, providers of capital and other strategic partners, and driving the global roll-out, which will involve considerable international presence. In order to allow Edi to concentrate on these important strategic matters, Nick Parker, who is currently an Independent Non-Executive Director of Tungsten Bank plc, has replaced Edi as Non-Executive Chairman of Tungsten Bank and Edi has become Deputy Chairman of Tungsten Bank.

Rob Eddowes, currently a Non-Executive Director of Tungsten Bank, has been appointed interim Chief Executive Officer of Tungsten Bank.

Tungsten also announces today the appointment of Nick Parker as Non-Executive Director to Tungsten Corporation plc. Nick brings a wealth of expertise to the Company's board from his 30 years' corporate finance advisory experience at PwC, where he led the Project Finance and Privatisation group. In addition to his role with Tungsten Bank, Nick is currently a Non-Executive Director of Pension Insurance Corporation plc and Chairman of The Wastepack Group.

Current outlook

The Company is targeting significant growth and profitability by extending the Tungsten Analytics and Workflow services to buyers who currently use only e-invoicing; by enrolling new suppliers to Tungsten Early Payment including into additional markets; by introducing the full Invoice Status Service to expand the addressable market of invoices that can be financed; by increasing the number of new connections by enrolling more suppliers and by connecting more existing suppliers to additional buyers on the Network; and by opening new offices. The Board will continue to assess potential acquisition opportunities.

Tungsten will continue to reduce the level of non-electronic invoices it processes and to migrate away from interoperating with networks that have less robust standards of compliance than the Tungsten Network.

Edmund Truell commented:

"We have taken the exceptional customer base and international compliance capability that we inherited from OB10 and, following significant investment and procedural improvements, are now executing on the Tungsten vision for continued and significant future growth. The Tungsten Network continues to expand as we attract new suppliers, enable more existing suppliers to transact with additional buyers, and connect more large buyers to the Network on a global basis to increasing its value through a true network effect. We are now about to invite suppliers en masse to enroll for finance and are negotiating with numerous buyers to contract for Analytics.

"We look forward to 2016 as the year when Tungsten Corporation begins to transform the world's supply chain and I believe Rick is the right person to lead the company as CEO as we execute and deliver on our strategy. As the leading provider of e-invoicing services, we aim to trade on a compliant basis globally, harnessing analytic tools to improve procurement for buyers and providing peace of mind and offering financing for all their suppliers through the Tungsten Portal."

Rick Hurwitz commented:

"I am truly excited at taking on the role of Group CEO and working with the strong team we now have in place to continue developing new solutions to enhance our service delivery and executing on Tungsten's vision of supporting the global supply chain."

Tungsten expects to announce its final results for the year ended 30 April 2015 on Wednesday 22 July 2015.

Investor and Analyst Conference Call

Management will host a conference call for investors and analysts at 9:00am UK time today. The dial-in number for the conference call is +44 20 3427 1912 / +1 646 254 3364 and the passcode is 5579696.

A replay facility will be available until 25 June 2015. The dial-in number for the replay facility is +44 20 3427 0598/ +1 347 366 9565 and the passcode is 5579696.

Enquiries:

Tungsten Corporation plc +44 20 7280 Edmund Truell, Vice Chairman 7901 Juliana Wheeler, Head of +44 20 7280 Global Communications 7973 Charles Stanley Securities (Nominated Adviser and Joint Broker) +44 20 7149 Marc Milmo/Dugald Carlean 6000 Canaccord Genuity Limited (Joint Broker) Simon Bridges/Peter Stewart/Andrew +44 20 7523 Beswick 8000 Neustria Partners (Investors and Analysts) Robert Bailhache/Nick Henderson/Charles +44 20 3021 Gorman 2580 Equus Group (Media) Piers Hooper/Sam Barton/James +44 20 7223 Culverhouse 1100

About Tungsten Corporation plc

Tungsten Corporation (LSE: TUNG) accelerates global trade by enabling customers to streamline invoice processing, improve cash-flow management and make better buying decisions from their detailed spend data.

Buyer organisations that join Tungsten Network, the world's largest compliant electronic invoice network, can reduce their invoice-processing costs by 60%. Suppliers benefit from efficiencies, greater visibility of their invoice status and peace of mind. Tungsten offers supply chain financing through Tungsten Bank*; and helps buying organisations profit by applying real-time spend analytics to its vast repository of line-level invoice data.

Tungsten serves 56% of the Fortune 500 and 67% of the FTSE 100 by connecting the world's largest companies and government agencies to their thousands of suppliers around the globe. It enables suppliers to submit tax compliant e-Invoices in 47 countries, and last year processed transactions worth over $187bn for organisations such as Alliance Data, Aviva, Cargill, Deutsche Lufthansa, General Motors, GlaxoSmithKline, Henkel, IBM, Kellogg's, and the US Federal Government.

Tungsten Corporation joined forces with OB10 in 2013 to create the world's largest electronic trading network; and acquired DocuSphere in September 2014, a provider of accounts payable automation solutions.

Contact: Juliana Wheeler, Head of Global Communications, +44 20 7280 7973.

juliana.wheeler@tungsten-network.com

* Tungsten Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Tungsten Bank is registered on the financial services register with firm reference number 139209.

Cautionary statement

This announcement has been prepared for the shareholders of Tungsten Corporatoin as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this announcement has not been audited or otherwise independently verified and no warranty is given as to its accuracy or completeness (other than any such warranty which is mandatorily implied by statute). Tungsten Corporation and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement and their responsibility to shareholders shall be limited to that which is imposed by statute.

This announcement contains indications of likely future developments and other forward looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future, which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.

Information relating to Nick Parker

Details of directorships that Nicholas Sherren Parker currently holds or has held in the previous five years are given below:

Current

Cuvva Limited

Tungsten Bank Plc

Farmstar Polska (UK)

Pension Insurance Corporation plc

The Wastepack Group Limited

Former (in the past 5 years)

FP Lothian Limited

European Academy of Optometry and Optics

Scottish Resources Group Limited

Castle European Estates Limited

Continental Farmers Group plc

The Universum Group

As noted above, Mr Parker was a director and sole owner of FP Lothian Limited, a business that owned a farm in Poland. In February 2014, the company was wound up voluntarily by way of a members' voluntary liquidation and there were no unpaid creditors.

Save as disclosed above, there is no further information required to be disclosed in accordance with Schedule 2, paragraph (g) of the AIM Rules.

Information relating to Richard M. Hurwitz

Rick Hurwitz has a proven track-record spanning 30 years of building high growth companies including extensive experience in talent development, general management and capital raising with financial services and technology companies in the US and internationally. As Chief Executive of Pictometry International, Mr Hurwitz led the strategic transformation of this category-defining company in the changing geospatial industry. Earlier, he was as a Partner at Aegis Investment Partners, a private investment firm which focuses on buying and turning distressed assets, a Managing Partner with Bancorp Services, where he led the firm's subsidiary broker-dealer, and Chief Executive of Bridge Information Systems' European operations where he also ran all non-US institutional equity and derivatives trading.

This information is provided by RNS

The company news service from the London Stock Exchange

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