Under-pressure telecoms service provider Billing Services (BILL:AIM) has delivered one of three key milestones needed to unlock shareholder value.
Full year results show the business is now debt free after repayments since 2006 of a stunning $265 million (£185 million) under lending facilities taken out before one of its key business lines went into terminal decline.
A debt-free balance sheet means BSG has now achieved one of three key objectives that may return the business to a more sustainable footing.
Number two and three of the trio of targets include building out a new wireless service and resolving major litigation which currently threatens the company’s existence.
Wireless services, BSG’s management hopes, can arrest falling revenue at the company’s long-distance landline billing business.
Group revenues at BSG declined 14.3% to $36.4 million and operating profit declined 36% to $3.5 million.
Developments in BSG’s wireless division indicate the strategy may be starting to gain traction. Contracts have been signed with Deutsche Telekom (DTE:FRA) and BT (BT.A)
Wireless services at BSG include an app which allows users to search for nearby Wi-Fi hotspots and connect using a single log-in across a range of providers.
Deutsche Telekom is offering the service as a tool for its corporate subscriber base.
Litigation remains a key threat to BSG and explains why its market value is only a little higher than this year’s reported profit-before-tax.
Pay-outs to fund customer redress after claims of unfair fees charged to landline telephone bills weighed on the business in 2016 though these payments are now coming to an end.
Further claims are also being considered by US regulator the Federal Trade Commission (FTC) and is another key risk.
The stock is tightly held with major shareholders, including asset manager Henderson (HGG), owning 55% of its share capital.