Source - LSE Regulatory
RNS Number : 8823K
Cornerstone FS PLC
23 December 2022
 

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.

 

23 December 2022

 

Cornerstone FS Plc

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

 

Sale of Avila House

Value realisation of non-core small e-money institution to generate c. £600k

 

Cornerstone FS Plc (AIM: CSFS), the cloud-based provider of international payment, currency risk management and electronic account services to SMEs, is pleased to announce that it has entered into a share purchase agreement ("SPA") for the sale of its non-core subsidiary, Avila House Ltd. ("Avila"), a registered small electronic money institution, to Aspire Commerce Ltd. ("Aspire"), trading as MulootMoney.com, the provider of payment accounts and lending services, for a consideration of £300,000 to be paid in cash on completion. The parties have also entered a software licencing agreement for Aspire to licence the Cornerstone platform for a period of 12 months, which will generate a minimum of £290,000 for the Company.

 

The Company acquired Avila in October 2020 to gain a Small Electronic Money Institution. In August 2021, the Group's primary operating subsidiary, Cornerstone Payment Solutions Ltd. (formerly FXPress Payment Services Ltd.), was approved by the Financial Conduct Authority ("FCA") as an Authorised Electronic Money Institution, which supplanted the more limited licence the Group held through Avila. Accordingly, the Board believes that it is in the best interests of the Company to realise the value of this non-core asset through its disposal to Aspire, a non-competing entity, while also further monetising the underlying Cornerstone platform as part of the transaction. In addition, Aspire intends to utilise Cornerstone's services for any FX payments made on behalf of its clients. The proceeds from the sale of Avila will be used to strengthen the Company's existing cash resources.

 

For the financial year ended 31 December 2021, Avila generated revenue of £197,996 and profit of £2,418. All of the revenue and the majority of the costs incurred by Avila were intra-Group related. In addition to the consideration and licensing fees, the disposal of Avila will be minimally beneficial to the results of the consolidated Cornerstone Group due to a small amount of standalone entity costs that will be saved following the disposal.

 

The completion of the SPA is conditional upon receipt of regulatory approval from the FCA, which is expected to occur in Q1 2023. The proceeds of the sale will be received by Cornerstone upon completion. Under the terms of the licencing agreement, the Company will receive revenue in stages over the 12-month period, with the majority expected to be recognised in the second half of 2023.

 

James Hickman, CEO of Cornerstone, said: "This is an excellent deal for Cornerstone and reflects the value of an e-money registration as well as our platform. As we have said previously, we have experienced strong trading momentum throughout the year, and it is great to now be ending 2022 having secured an additional £600,000 for next year. We look forward to reporting on our further progress."

 

 

Enquiries 

 

Cornerstone FS Plc 

+44 (0)203 971 4865 

James Hickman, Chief Executive Officer 

Judy Happe, Chief Financial Officer 




SPARK Advisory Partners Limited (Nomad) 

+44 (0)203 368 3550 

Mark Brady, Adam Dawes 




SP Angel Corporate Finance LLP (Broker) 

+44 (0)203 470 0470 

Jeff Keating, Harry Davies-Ball 




Gracechurch Group (Financial PR) 

+44 (0)204 582 3500 

Harry Chathli, Claire Norbury 


 

About Cornerstone FS PLC

Cornerstone FS Plc is a payments focused fintech business that makes managing currency simple for SMEs. It provides international payment, currency risk management and electronic account services using a proprietary cloud-based multi-currency payments platform. These services are delivered directly and via white label partners on a SaaS basis to UK-based SMEs that engage in international trade. Cornerstone also serves some high-net worth individual clients.

 

Headquartered in the City of London and with offices in Tunbridge Wells and Dubai, Cornerstone is listed on AIM under the trading symbol 'CSFS'. For more information, please visit www.cornerstonefs.com.

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