News that electronic factoring play Tungsten’s (TUNG:AIM) systems have been given approval for use in Saudi Arabia underline the growing business momentum at the firm. The £295 million cap is up 4.0% to 307p.
Before the company’s OB10 e-invoicing hub can be used in a country it needs to get the necessary legislative approval and the Middle Eastern state becomes the 45th country to join up. Creating a globally authorised network is key to the company getting the required scale to win contracts from big multi-national clients such as that secured with General Electric (GE:NYSE) last month (19 May).
The news follows confirmation (4 Jun) that the firm had achieved accreditation to allow its systems to link in with the UK Government’s G-Cloud 5 Framework. Under this framework the company will be in pole position to win e-invoicing work from public sector bodies.
However, the vital piece of news for Tungsten since we flagged the company as a key pick (see Plays, Shares, 29 May) was confirmation (29 May) that its application for change of control of FIBI Bank has been approved. FIBI gives it the authorised platform from which to roll out its product.
The company is in a strong position as banks rebuild their balance sheets and cut lending to corporates, in turn creating an opportunity for providers of alternative finance. Tungsten’s model is not new, but factoring, the process of companies borrowing against their outstanding invoices, has historically been paper based and controlled by the big clearing banks. An organised electronic player has potential to be a disruptive force.