iSignthis Limited

Suspension from Official Quotation: iSignthis Limited (ASX: ISX) is a global RegTech leader in remote identity verification, payment authentication with deposit taking, transactional banking, and payment processing capability. The company provides an end-to-end on-boarding service for merchants, with a unified payment and identity service via its Payidentity™ and ISXPay® solutions. As per a market announcement released on 02 October 2019, it was notified that the shares of iSignthis Limited have been suspended due to pending outcome with respect to enquiries made by the Australian Securities and Investments Commission (ASIC) and Australian Securities Exchange (ASX), into certain issues concerning the company. Recently, the ASIC questioned the above announcement regarding the suspension of shares, stating that it did not request any such action to be taken. A written statement from the regulator read that the suspension was not done at the request of ASIC. In response to the above, ASX mentioned that there was no representation to any of the parties regarding suspension of securities at the direction of ASIC. Provided the authority given to the exchange to suspend any security on account of an appropriate reason, it is allowed to issue suspension orders without direction or consent from ASIC.

Appointment of Joint Company Secretary: In another recent announcement on the exchange, it was notified that Elizabeth Warrell, Group CFO, has been appointed as the Joint Company Secretary along with Todd Richards. The new CS has a rich experience of 20 years in the banking and financial services sector.

Unaudited Financial Results for Q3FY19: During the quarter ended 30 September 2019, the company reported an operating cashflow amounting to $1.067 million. Cash receipts during the period stood at $8.326 million, representing a quarter-on-quarter increase of 38.5% as compared to receipts amounting to $6.01 million in the previous quarter. Revenue for the quarter amounted to $8.58 million, representing an increase of 36% as compared to the previous quarter revenue of $6.3 million. Third-quarter revenue was also higher than the total revenue of $8.173 million during the first half.

Cash Position: At the end of the quarter, the company had a bank balance of $12.2 million, up 23% on the previous quarter’s balance of $9.9 million. Client funds held at the end of the period amounted to $75 million, up 114% on $35 million in the previous quarter. Cash security of $1.44 million has also been lodged with Visa Inc for licensing.


Financial Performance (Source: Company Reports)

Customer Distribution: Majority of the company’s customers, 69% to be precise, are spread across the sectors such as general retail, video games, marketing, e-commerce, etc. The remaining 31% span across sectors, including securities brokers, banks, CFD and digital currency exchange. Out of the 31%, 1% constitutes customers in gambling and 6.5% in providing payment services to digital currency exchanges.

September GPTV Exceeds A$1.9 billion:The company updated that actual annualised Gross Processed Transaction Volume (GPTV) in the month of September 2019, exceeded A$1.9 billion, up 360% from 30 June 2019. Business customer group approvals by the end of the September quarter stood at 304, up 45% on 210 as at 30 June 2019. The group approvals continue to grow consistently in-line with the expectations while the company continues to work through the growing pipeline of business customer applications.

Guidance: The company expects CY/FY2019 EBIT, excluding non-cash items, to be approximately $10.7 million. Assumptions underlying the set target included a fixed cost base of $11.0 million and growing GPTV from new merchants.
The company’s stock has generated whopping returns of 637.93% over a period of one year and has currently been suspended on account of enquiries conducted by the AISC and ASX with respect to certain issues in relation to the business.

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