ISignThis warns cash receipts will halve after Euro problems; shares drop
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Payments platform iSignThis has warned its cash receipts will halve this quarter after its European clearing house was placed into administration.
September quarter cash receipts “will be down significantly from last quarter, with resultant cash receipts possibly as low as $1.2 milion”, iSignThis told investors on Wednesday morning.
That compares with $2.6 million last quarter (for a total of $5 million for the year to June).
The stock (ASX:ISX) dropped 14 per cent to 15.5c in early Wednesday trade before recovering to 16.5c just before 11am AEST.
iSignThis — which describes itself as a European-focused payments, eMoney and identity technology company — told investors clearing and settlement of its card networks via partner KAB (Kobenhavns Andelkasse Bank) was “no longer possible”.
KAB has been placed under the control of the Danish administrators.
“The KAB matter has already impacted processing, clearing and settlement intermittently during July and August and most of the September month.”
iSignThis merchants had been forced to make “arrangements to continue to utilise their existing card processing facilities outside of the company’s present network”.
iSignThis would stop processing EU card transactions “with corresponding impact on revenues until our own central bank facilities are commissioned”.
These systems would be “going live progressively through October into early December”, the business said.
iSignThis is now expecting earnings before interest and tax of $10.7 million for FY2019.
“Whilst the KAB matter has significant impact on short term revenues, the Company’s [own] Tier 1 facilities are being progressively completed and commissioned over the coming weeks in any case,” the company said.
“The company’s overall view remains optimistic and positive with regards to execution of its overarching strategy.”