Tungsten : AGM Statement & Trading Update

TUNGSTEN CORPORATION PLC

('Tungsten', the 'Company' or 'Group')

AGM Statement / Trading Update

15 September 2017

Tungsten Corporation plc (LSE: TUNG) makes the following trading update in advance of the Company's Annual General Meeting to be held today.

Tungsten's focus in the year to 30 April 2018 ('FY18') is executing against our plan. Unaudited revenue of £8.3 million in the three months to 31 July 2017 ('Q1-FY18') was 12% higher than the same period in the prior year on a constant currency basis and in line with the Board's expectations.

In the first quarter we added three new Buyer customers to Tungsten Network. These included a multi-year global rollout of e-invoicing services for Carlsberg Group and a further sale of our new Invoice Data Capture product, which digitises non-electronic invoices and therefore enables quicker achievement of some of the benefits of digital automation. We also continued to renew the contracts of existing Buyers on Tungsten Network to better reflect the value created by our services, without any notable losses. We continue to open new sales channels to increase our reach and have entered into a strategic partnership with Tech Mahindra to push automation in newer markets and increase our presence globally.

We continue to work closely with Buyer customers to onboard an increasing number of their Suppliers onto Tungsten Network including, amongst others in Q1-FY18, those of Mondelēz International and Sanofi.

In FY17, we expanded the breadth of Tungsten Network Finance products through an increased range of partners. In Q1-FY18, we secured three structured receivables financing mandates totalling approximately $75 million. We expect these to be funded by our partners in Q2-FY18, at which time we start to generate revenue. Also in Q1-FY18, the first Tungsten Network customers took advantage of the flexible lines of credit offered through our partner BlueVine.

To enable us to accelerate the achievement of our goal of profitable growth, we are focussed on the execution of technology improvements that will enhance the scalability, reliability and security of Tungsten Network. In Q1-FY18, we made strong progress with the upgrade of our core processing capabilities and transition to new production infrastructure. We expect these projects to be fully completed over FY18, delivering enhanced scalability, security and cost efficiencies.

In July 2016, we set ourselves the challenging goal of achieving monthly EBITDA breakeven by the end of this calendar year. This remains our goal and in Q1-FY18 our unaudited EBITDA loss fell by 36% from the same period in the prior year as we made progress on both revenue growth and cost control.

We have a strong sales pipeline and expect to add more new Buyers to Tungsten Network this financial year than last. As always, the timing of contract closure determines the phasing of monthly revenues. For FY18, our targets remain constant currency revenue growth in excess of 15% and a gross margin of at least 90%.

Tungsten's operating cost base is now stable and carefully controlled. In Q1-FY18, we continued to make organisational adjustments to meet the demands of our customers in a more efficient manner. We continue to expect to spend less than £40 million in operating expenses during the year, excluding one-off restructuring costs of approximately £2 million.

As we look forward to the rest of FY18 and beyond, we recognise that our markets are supportive of the products and services we offer and we have put the Company in a position to generate profitable growth and shareholder value. We remain excited about the opportunities afforded by our partnerships and corporate development activities.

Tungsten will announce its Interim Results for the six months ended 31 October 2017 on 14 December 2017.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

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About Tungsten Corporation plc

Tungsten Corporation(LSE: TUNG) aims to be the world's most trusted business transaction network by using data intelligently to strengthen the global supply chain.

Tungsten Network is a secure e-invoicing, purchase order services and workflow platform that brings businesses and their suppliers closer together with unique technology that revolutionises invoice processing, maximises efficiency and improves cash flow. Delivering trusted connections and streamlined transactions, the network also provides users with real-time spend analysis and offers suppliers access to invoice financing through Tungsten Network Finance, a form of alternative finance for businesses.

Tungsten Network processes invoices for 70 percent of the FTSE 100 and 76 percent of the Fortune 500. It enables suppliers to submit tax compliant e-invoices in 48 countries, and last year processed transactions worth over £133bn for organisations such as Alliance Data, Cargill, Deutsche Lufthansa, General Motors, GlaxoSmithKline, Mondelēz International, Henkel, IBM, Kellogg's and the US Federal Government.