REG - Cornerstone FS PLC - Sale of Avila House

Cornerstone FSAnnouncement

23/12/2022 07:00

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RNS Number : 8823K  Cornerstone FS PLC  23 December 2022

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Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

 

23 December 2022

 

Cornerstone FS Plc

("Cornerstone" or "the Company" or "the Group")

 

Sale of Avila House

Value realisation of non-core small e-money institution to generate c. £600k

 

Cornerstone FS Plc (AIM: CSFS), the cloud-based provider of international
payment, currency risk management and electronic account services to SMEs, is
pleased to announce that it has entered into a share purchase agreement
("SPA") for the sale of its non-core subsidiary, Avila House Ltd. ("Avila"), a
registered small electronic money institution, to Aspire Commerce Ltd.
("Aspire"), trading as MulootMoney.com (http://MulootMoney.com) , the
provider of payment accounts and lending services, for a consideration of
£300,000 to be paid in cash on completion. The parties have also entered a
software licencing agreement for Aspire to licence the Cornerstone platform
for a period of 12 months, which will generate a minimum of £290,000 for the
Company.

 

The Company acquired Avila in October 2020 to gain a Small Electronic Money
Institution. In August 2021, the Group's primary operating subsidiary,
Cornerstone Payment Solutions Ltd. (formerly FXPress Payment Services Ltd.),
was approved by the Financial Conduct Authority ("FCA") as an Authorised
Electronic Money Institution, which supplanted the more limited licence the
Group held through Avila. Accordingly, the Board believes that it is in the
best interests of the Company to realise the value of this non-core asset
through its disposal to Aspire, a non-competing entity, while also further
monetising the underlying Cornerstone platform as part of the transaction. In
addition, Aspire intends to utilise Cornerstone's services for any FX payments
made on behalf of its clients. The proceeds from the sale of Avila will be
used to strengthen the Company's existing cash resources.

 

For the financial year ended 31 December 2021, Avila generated revenue of
£197,996 and profit of £2,418. All of the revenue and the majority of the
costs incurred by Avila were intra-Group related. In addition to the
consideration and licensing fees, the disposal of Avila will be minimally
beneficial to the results of the consolidated Cornerstone Group due to a small
amount of standalone entity costs that will be saved following the disposal.

 

The completion of the SPA is conditional upon receipt of regulatory approval
from the FCA, which is expected to occur in Q1 2023. The proceeds of the sale
will be received by Cornerstone upon completion. Under the terms of the
licencing agreement, the Company will receive revenue in stages over the
12-month period, with the majority expected to be recognised in the second
half of 2023.

 

James Hickman, CEO of Cornerstone, said: "This is an excellent deal for
Cornerstone and reflects the value of an e-money registration as well as our
platform. As we have said previously, we have experienced strong trading
momentum throughout the year, and it is great to now be ending 2022 having
secured an additional £600,000 for next year. We look forward to reporting on
our further progress."

 

 

Enquiries

 

 Cornerstone FS Plc                         +44 (0)203 971 4865
 James Hickman, Chief Executive Officer

 Judy Happe, Chief Financial Officer

 SPARK Advisory Partners Limited (Nomad)    +44 (0)203 368 3550
 Mark Brady, Adam Dawes

 SP Angel Corporate Finance LLP (Broker)    +44 (0)203 470 0470
 Jeff Keating, Harry Davies-Ball

 Gracechurch Group (Financial PR)           +44 (0)204 582 3500
 Harry Chathli, Claire Norbury

 

About Cornerstone FS PLC

Cornerstone FS Plc is a payments focused fintech business that makes managing
currency simple for SMEs. It provides international payment, currency risk
management and electronic account services using a proprietary cloud-based
multi-currency payments platform. These services are delivered directly and
via white label partners on a SaaS basis to UK-based SMEs that engage in
international trade. Cornerstone also serves some high-net worth individual
clients.

 

Headquartered in the City of London and with offices in Tunbridge Wells and
Dubai, Cornerstone is listed on AIM under the trading symbol 'CSFS'. For more
information, please visit www.cornerstonefs.com.

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