iSignthis Limited

A Look at the Recent Update for ISX: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.

On December 6, 2019, the company informed the market about the expiry of its unlisted options and cancellation of performance rights.


Unlisted Options & Performance Rights Information (Source: Company Reports)

SWIFT Operational Update:On December 6, 2019, the company provided SWIFT operational update to the market, where it highlighted that it has been a client to many Australian banking partners to assist them with its SWIFT transfers to various international jurisdictions under a Tier 2 arrangement.

The company is no longer in a position to reliably conduct SWIFT transfers originating from Australia due to various problems faced by Australian banks such as AML (anti-money laundering) failures. ISX is placing its own Tier 1 arrangements via the European TARGET2 framework, which will allow its advanced anti-money laundering, anti-fraud and anti-crime system “Paydentity™” platform to incorporate into incoming and outbound transactions and ensuring third party banks for SWIFT transfers. 

The platform can screen inbound and outbound SWIFT transactions in real-time, from the external sender to the external beneficiary against law enforcement, sanction, politically exposed person lists and court databases, ensuring the integrity of transactions executed by ISXPay®, which is responsible to send and transmit monies through the single Euro Payments Area network to over 4300 European banks.

With ISX temporarily suspending outbound SWIFT, there will be a softening in the growth of GPTV until the end of February, with the FY2019 impact to be factored into the revised earnings guidance. By end-February to mid-March 2020, the company’s own independent SWIFT Tier 1 facilities are expected to be operational. These temporary outages and transitioning activities are expected not to alter the company’s usual business with other banks.


September’19 Quarter Operating Cash Flow Statement (Source: Company Reports)

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

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

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 Bn: The company updated that actual annualised Gross Processed Transaction Volume (GPTV) in the month of September 2019, exceeded A$1.9 Bn, up 360% from June 30, 2019. Business customer group approvals by the end of the September quarter stood at 304, up 45% on 210 as on June 30, 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 Mn. Assumptions underlying the set target included a fixed cost base of $11.0 Mn 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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