Cornerstone FS registers 127% Y/Y increase in revenues in H1 2022
Cornerstone FS plc (LON:CSFS), a cloud-based provider of international payment, currency risk management and electronic account services, today announced its unaudited interim results for the six months ended 30 June 2022.
Revenue for the six months to 30 June 2022 increased by 127% to £1.9 million, compared with £837,000 for the first half of the previous year, and by 27% sequentially (H2 2021: £1.5m). This reflects strong underlying growth, driven by the revenue generated by clients that the Group serves directly, as well as the contribution from Capital Currencies, which was acquired during the period.
As a result of the increased contribution to revenue from clients that the Group serves directly, gross margin improved substantially to 61.7% in the first half of 2022 (H1 2021 38.1%). The improvement in gross margin combined with the increased revenue enabled the Group to achieve significant growth in gross profit to £1.2m (H1 2021: £319k).
Total administrative expenses for the first half of 2022 were £4.1m compared with £1.5m for the first half of the prior year.
The Group recognised a loss before tax of £3.0m for the first half of 2022 compared with £1.2m for the prior period, which primarily reflects the greater administrative expenses. Loss per ordinary share on a basic and diluted basis was 13.05 pence (H1 2021: 6.49 pence), due to the increased loss.
The Group’s underlying loss from operations (excluding share-based compensation charges and transaction costs) was £721k, an improvement of £41k compared to the prior period (H1 2021: £762k).
As at 30 June 2022, the Group had cash and cash equivalents of £283k (31 December 2021: £348k; 30 June 2021: £951k). This followed the raising of gross proceeds of £870k via the placing of, and subscription for, new ordinary shares, which was partly used to fund the initial £586k cash consideration for the acquisition of Capital Currencies.
Post period, the Group raised a total of approximately £1.1m through the placing of new ordinary shares (£860k) and the issue of a convertible loan note (£225k). The loan note was issued to one investor who also took shares up to the maximum amount allowed before obtaining FCA approval (9.9% of the Company’s issued share capital). Application for FCA approval has been made and the loan note converts automatically into shares on approval being received.
The strong trading momentum that was experienced in the first half of the year has continued into the second half, reflecting underlying growth as well as the initial contribution from the Pangea FX acquisition. With the investment in the expansion of its sales team, the Group expects this trend to be sustained throughout the year.
In addition, revenue for 2022 will benefit from the contribution from Capital Currencies, which was acquired during the year. As a result, the Board continues to expect to achieve substantial revenue growth for full year 2022.