Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.

10 January 2024

Cornerstone FS plc

("Cornerstone" or "the Company" or "the Group")

2023 Full Year Trading Update

Doubling of revenue and delivery of maiden full year adj. EBITDA

Cornerstone FS plc (AIM: CSFS), a foreign exchange and payments solutions company offering multi-currency accounts to businesses and individuals through its proprietary technology platform, is pleased to provide an update on trading for the year ended 31 December 2023. The information contained herein has not been audited and may be subject to further review and amendment.

Highlights

·    Revenue growth of 100% to c. £9.6m (2022: £4.8m)

·    Gross margin improvement to c. 63% (2022: 60.9%)

·    Adj. EBITDA¹ of not less than c. £1.4m (2022: £0.9m adj. EBITDA  loss)

·    Net cash generated from operating activities of c. £1.4m (2022: net outflow from operating activities of £0.8m)

·    Cash and cash equivalents at 31 December 2023 of c. £2.3m (30 June 2023: £0.8m; 31 December 2022: £0.7m)

The Group is pleased to confirm that the previously reported strong trading momentum was sustained to year end and, as a result, it expects to report a year-on-year increase in revenue of approximately 100% to £9.6m (2022: £4.8m), ahead of market expectations. The significant growth reflects the advancements made across the business driving year-on-year increases in active customers² (2023: 906, 2022: 803) and average transaction value. Key elements of this have been growth in the sales team and enhancing and expanding the Group's offering, in particular increasing the number of counterparties to broaden the range of currencies and countries where it can transact.

The Group expects to report an improvement in gross margin to c. 63% for 2023 (2022: 60.9%), reflecting a lower proportion of revenue derived from white label partners following the strategic decision to manage down almost all of its historic white label business. The Group also saw an improvement resulting from the change in commission arrangements agreed with Robert O'Brien, General Manager APAC and Middle East, in the first half of the year. 

With the increase in revenue and gross margin, as well as continued careful management of the cost base, the Group expects to report adjusted EBITDA for 2023 of not less than £1.4m, which is significantly ahead of current market expectations, compared with an adjusted EBITDA loss of £0.9m for the previous year. The Group generated a net cash inflow of c. £1.6m during the year, including a cash inflow from operating activities of c. £1.4m (2022: net cash outflow from operating activities of £0.8m), with cash and cash equivalents at 31 December 2023 of £2.3m (30 June 2023: £0.8m; 31 December 2022: £0.7m).

¹ Adjusted to exclude share-based compensation, transaction costs, other operating income and profit on a disposal of a subsidiary

² Defined as customers who traded through Cornerstone in the preceding 12 months

James Hickman, CEO of Cornerstone, said: "It has been an excellent year for Cornerstone as we made substantial strategic progress culminating in a set of strong financial results which significantly exceeded the Board's expectations this time last year. We have enhanced our sales team and expanded our offering, which has resulted in us executing higher value transactions and with a greater number of active customers. With a highly scalable platform, along with careful management of our cost base, we are also benefitting from the operating leverage within our business and 2023 has seen us report our maiden full year adjusted EBITDA. We look forward to updating the market on our success as we progress through 2024."

Investor Presentation

The Group gives notice that James Hickman, CEO, Judy Happe, CFO, and Jordanna Curtis, COO, will be presenting via Investor Meet Company on 16 January 2024 at 10.00am GMT to provide investors with an update on the Group's strategy.

Questions can be submitted pre-event via the Investor Meet Company platform up until 9.00am GMT the day before the meeting or at any time during the live presentation. 

Investors can sign up to Investor Meet Company for free and add to meet Cornerstone via: 

https://www.investormeetcompany.com/cornerstone-fs-plc/register-investor

Enquiries 

About Cornerstone FS plc

Cornerstone FS plc (AIM: CSFS) is a foreign exchange and payments company offering multi-currency accounts and payment solutions to businesses and individuals. Headquartered in the City of London, Cornerstone combines a proprietary technology platform with a high level of personalised service to support clients with payments in over 150 countries in 58 currencies. With a track record of over 12 years, Cornerstone has the expertise, experience and expanding global partner network to be able to execute complex cross-border payments. It is fully regulated by the Financial Conduct Authority as an Electronic Money Institution through its wholly owned subsidiary company Cornerstone Payment Solutions Limited. www.cornerstonefs.com