iSignthis Ltd (ASX: ISX) headquartered in Melbourne, Australia and listed on the Australian Securities and Frankfurt Stock Exchange offers identification and payment authentication services with a reach to any of the 4.2Bn of the verified card holders or account holders. The company is engaged in anti-money laundering, counter terrorist funding and know your customer (KYC) identity proofing. Its eKYC offers a range of online services, including digital banking, card issuers, loan providers, insurance, bitcoin and cryptocurrency exchange, financial services, and person to person remittance/money service businesses.
A Flick through the Company’s Subsidiary and Service Offerings:
Probanx Information Systems Ltd (Probanx®)
A wholly owned subsidiary of the company offering web-based banking solutions using the latest technology and international standard business rules. Furthermore, it delivers core banking software including banking solutions. Its banking software solutions are designed for emoney and payment firms, as well as retail, corporate and private banks.
As a provider of back office solutions, it serves regulated firms. The service helps the merchants to cater to their regulatory requirements.
iSignthis eMoney Ltd, which is iSignthis’ subsidiary, trades under the symbol of ISXPay®. It is a principal member of many renowned card services providers like the Visa Inc, Dinners, etc., also an American Express aggregator. ISXPay® merchants get payment access via several methods such as SEPA, Trustly and WeChat, AliPay.
UAB Baltic Banking Service, (“BBS”)
The 100% owned subsidiary incorporates document and payment management services to the regulated entities present in the market and provides the Central Bank of Lithuania’s CENTROLink service to financial institutions.
iSignthis®’ patented AML KYCC system continues to allure the market. On 16 June 2019, the company announced to the market that it has approved over 150 active accounts, and the company addressed more complex and large entities from the CFD/FX markets. The company also highlighted that its customer onboarding is in line with their guidance and expectations.
Paydentity® service is a major contributor to the new business applications. Under this service, customers use the company’s patented Paydentity® technology to meet their AML (Anti Money Laundering) obligations. Moreover, the technology enables them in fulfilling the customer due diligence requirements, as an EU regulated firm. The company also reported that its AML process has been submitted to the regulators.
Their Advancement in CDD has helped them step into the KYB (know your business) process. Know your business is a requirement for any institution linking customers and traders. This requirement is as per the EU and Australian regulatory requirements. Paydentity® not only confirm the aspects of KYB but also assists them in Know Your Customer’s Customer (KYCC) aspect.
The company’s KYCC process applied via Paydentity® serves dual benefit by allowing the customers and merchants to comply with their AUSTRAC and/or EU regulatory requirements. Moreover, the process de-risks the company’s operations, as it tracks the flow of money from its customers through its systems to the merchant.
On 17 May 2019 at the annual general meeting the company had taken up ten resolutions, 9 resolutions were passed and resolution 4 withdrawn, i.e. Resolution on Approval of 10% Placement Capacity.
Overview of the 4th resolution: Resolution 4 is related to the approval to an issue of additional 10% issued capital
Decision 4 related to the authorization to issue an additional 10% of issued capital over a 12 month period. To be eligible to seek approval under ASX, a listed entity must have a market capitalization of $300 million, or less and not be included in the S&P/ASX300 Index.
But as the company had a market capitalization of over $300 million, therefore became ineligible of the 10 per cent grant.
The CEO, John Karantzis addressed the shareholders at the AGM. On the financial front of the company, the chairman stated that the first quarter of the financial year 2019 saw significant progress in the company's overall performance. Revenues came in at $1.85 million up by 78% in comparison to the last quarter 0f 2018, and the cash receipts were reported at $1.4 million up 55 per cent from 0.9 million in contrast to the previous quarter (Q4) of 2018. Consistency of the recurring costs as per the estimated budget expectations was another highlight. The subsidiaries also played a significant role in the company's success. ISXPay services contributed a gross profit of $620,000 with a reduction in the cost of goods sold (COGS), and MSF% (average) higher than 125bps whereas the technological subsidiaries BBS and ProbanX contributed a positive EBIT of $286,000.
The company aims to implement a growth strategy to continue the legacy of success in the market by
- Introducing New Products
Expanding the paydentity service to its full potential, exploring linking the paydentity and IBAN/BSB+AC to debit and credit cards enabling the customers to have economic mobility independent of working inside or outside the ISX environment.
- Discovering the Market
Continuously expanding the existing share of the merchant GPTV and exploring APAC, LATAM US/CA markets to step in a new market this financial year.
Further,The CEO speaking on the guidance stated that the actual average in gross profit (GP) margin was greater than 125 bps in the first quarter. GPTV is expected to recur on annually per merchant and grow with the new ones. The e-money unit accounted for an average GP in a margin of 100bps. Other revenue streams contributed in the growth include e-Paydentity, Probanx, BBS, fixed fees, set up charges, transfer fees and FX fees. Cost base has increased to $8.75m pa for Probanx, BBS and new product initiatives. However, the contribution of ADI licensing remains negligible since the late 2nd quarter. The company has set an EBIT target of AUD 10.7m for the 2019 financial year.
On 21st May, the company announced that it had appointed Dr George Theocharides to the board of its subsidiary isignthis e-money ltd. Following the Regulatory approval of a fit and proper person under the requirements of the European central bank. Dr. Theocharides holds a B. Eng (Hons) degree in Electrical Engineering and Electronics from USMIST and also holds an MBA. Prior to joining the company he was an Assistant Professor of finance in Korea.
On the day of writing (AEST: THU 21 June 2019, 03:35 PM) The stock opened at 0.650 and was trading flat at $0.650 with a market capitalization of $703.88 million. The company recorded a 52-week high of A$0.690 and 52 weeks low of A$0.105. Its six-month return is 319.35 per cent while its year to date return is recorded at 333.33 per cent.
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