Slower than expected trading combined with continued restructuring of the business in H117 has resulted in a reduction in our forecasts for FY17. Management is confident that the pipeline has strengthened and should support a pick-up in revenues in H217. The HomeSend joint venture (JV) has extended its application to the cross-border bank payments market, which should support its target to break even in CY17 and drive growth in the value of the JV.
H117 trading disappoints
Eservglobal Ltd (AX:ESV) saw weaker than expected trading in H117 due to delays in a new and an existing contract, resulting in a 30% decline in revenues y-o-y. However, management is confident that it has a strong pipeline and therefore expects a material step-up in revenues in H217. Management has been restructuring the business over the past two years and continues to assess historical receivable balances – taking a more prudent approach has resulted in further WIP and receivable write-downs totalling A$4.3m in H117. The company extended its debt by £2.5m/A$4.2m post period end to fund working capital and further restructuring.
To read the entire report Please click on the pdf File Below: