Boxhill provides an update on recent developments.
The Company is pleased to announce the win by its subsidiary, Prize Provision Services Limited (which operates the Weather Lottery), to operate a lottery for one of the UK’s largest membership organisations, with over two million potential participants. The membership organisation is investing a six-figure sum in internal marketing to drive its membership to contribute to its charitable arm which supports its members in a number of activities. With the investment in marketing it is expected to see a substantial uplift in lottery lines played and we look forward to reporting on the progress over the coming months.
Reorganisation of the payments business following the sale of the Emex Group has involved a refocus on more mainstream clients and markets within Market Access Limited (“Market Access”). This finds the payments business in a more competitive arena, where margins are lower, and this will be reflected in the first half results. The reduction in revenues reported on 12 July has continued at the same level while the reorganisation continues, with further declines in payment processing being offset by a rise in foreign exchange business. However, we believe that in the long term the reorganisation will enable us to produce a growth pattern that is more stable than we have seen in the past.
In implementing this reorganisation, Market Access has made progress across all areas of operation. It has launched its Market Access treasury services platform with a small number of Beta clients testing the cross-border payment and foreign exchange functionality. The full suite of services (including FX, Treasury, Compliance and Risk Monitoring) is expected be ready in November, with an initial tranche of approximately 30 corporate clients already in the approval cycle.
Refocused credit card processing services are now in place and the first few merchants are going through the approval process and we expect this to contribute to revenue from November 2018. We have partnership agreements in place with a number of key acquiring banks and other suppliers in Europe, the Far East and North America.
Market Access is also working on several card issuing opportunities – with two medium sized programmes in development – both of approximately 5,000 users each.
Also, in July, The Board announced the separation of the provision of payment services to Non-Conforming Customers from the rest of the Group through the sale of Emex (UK) Group Limited, Emexconsult Limited and Emex Technologies Limited to MDC Nominees Limited.
The consideration for the purchase of Emex was £2,000,000, satisfied through the issue by MDC Nominees Limited of a Loan Note to the same value, with a 10-year term. Repayment is to be by way of the establishment of a sinking fund into which the net revenues of Emex resulting from the customers left in place at the time of the transaction or any new Non-Conforming Customers (as defined in the announcement of 12 July 2018) referred by Market Access, the referral of which is expected to commence in November as part of the full set of Market Access services. The delay in establishing the Market Access payment processing platform, which, as mentioned above, is due to go live in November, has prevented the processing of Non-Conforming Customers on behalf of MDC Nominees Limited as well its own customers. As a consequence, no payments have yet been made into the sinking fund by MDC Nominees Limited.
Work continues to satisfy the auditors on the one outstanding item and shareholders will of course be notified as soon as the audit is completed. Trading in the Company’s ordinary shares of 0.1 pence each remain suspended on AIM pending publication of the Annual Report and Accounts and its half-yearly financial results for the 6-months to 31 July 2018.
Full report can be found here