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 announce its unaudited interim results for the six months ended 30 June 2023.

Financial Highlights

· Revenue increased by 90% to £3.6m (H1 2022: £1.9m) through the continued expansion of the Group’s payments capabilities and offering, and on-going investment in the sales function

· Gross margin broadly stable at 61.0% (H1 2022: 61.7%)

· Maiden half-year adjusted1 EBITDA of £0.2m (H1 2022: £0.5m loss) driven by both revenue growth and careful management of the Group’s cost base

· Operating profit of £0.1m (H1 2022: £3.0m loss)

· Profit before tax of £23k (H1 2022: £3.0m loss)

· Cash generated from operations of £0.1m (H1 2022: cash used in operations of £0.1m)

· Cash and cash equivalents increased to £816k at 30 June 2023 (31 December 2022: £682k)

Operational Highlights

· Proportion of revenue accounted for by direct clients increased to 91% (H1 2022: 74%) reflecting the strategic decision to rationalise the majority of the historic white label business

· Active customers2 increased to 874 (period to 30 June 2022: 697)

· New counterparty partnerships established to broaden the number of currencies and countries where the Group can transact – the Group can now pay out to over 150 countries in 58 currencies

· Completed preparation for the introduction of the Consumer Duty regulation in July 2023

Current trading and outlook

· The strong trading momentum experienced in the first half of the year has continued into the second half

· With the continued advancements being made across the business and a clear focus on Finseta’s strategic growth priorities, the Group now expects to report results for its full year 2023 significantly ahead of market expectations, including achieving its first full year of positive adjusted EBITDA

· The Board is confident that the Group’s funding position is comfortable and sufficient to support its existing growth plans

James Hickman, CEO of Finseta, said:

“It has been an excellent six months for Finseta, delivering substantial revenue growth and achieving our first half-year period of profitability and operating cash generation. This has been driven by our enhanced sales efforts and focus on more fully commercialising our platform alongside important action to carefully manage our cost base as we grow.

“We have also continued to execute on our strategy to augment our capabilities by establishing further counterparty relationships and partnerships, and we’re particularly excited about the progress we’ve made towards expanding our payment methods.

“With the strong trading momentum having continued into the second half of the year, and with the benefits from our operational improvements still coming through, we expect to report full year results significantly ahead of market expectations, representing substantial year-on-year growth as well as a maiden full year adjusted EBITDA.

“When combined with a large and supportive market backdrop, as global digital payment transaction values expand and the on-going shift of payment transactions away from banks to specialist firms continues, the Board has great confidence in the future of the Group.”

1 Adjusted to exclude share-based compensation and transaction costs of £0.2m and other operating income and profit on a disposal of a subsidiary of £0.4m (H1 2022: £2.3m and £nil)

2 Calculated as customers who traded through Finseta in the 12 months to 30 June 2023