GSTechnologies Limited (LSE: GST), the fintech company, announces the Company's unaudited interim results for the six months ended 30 September 2024 ("H1 25" or the "Period").
Period Highlights
Further significant progress for the Group as it focused on developing a borderless neobanking platform providing next-generation digital money solutions, both organically and through complementary acquisitions
Revenue for the Period grew nearly nine fold to US$2.23 million (H1 24 US$0.26 million), as the Group continued to execute its strategy and all Group entities demonstrated significant growth and expansion of their operations
Net loss for the Period reduced to US$69k (H1 24: US$737k loss) as the Company's operating businesses gain traction whist the Group continues to invests in developing its GS Money solutions
Placing to raise gross proceeds of £1.25 million in April 2024 at 1.05 pence per share
As of 30 September 2024, the Company had US$2.91 million in cash and cash equivalents (30 September 2023: US$2.19 million)
Net assets as at 30 September 2024 increased significantly to US$7.13 million compared to US$4.38 million at 30 September 2023, following the acquisition of Semnet and the progress of the Group's businesses
Post Period Highlights
On 18 November 2024 GST signed a legally binding Heads of Terms with Trident Global Capital Pte Ltd, regarding strategic preparations for a potential listing of Sement on NASDAQ in the US
On 11 December 2024 the Company's wholly owned subsidiary GS Fintech UAB entered into a legally binding Business Purchase Agreement to acquire the business and assets of Cake Pte. Ltd. and Cake DeFi UAB. The acquisition comprises a leading cryptocurrency investment platform, Bake, and is in line with the Company's strategy to expand and enhance the international presence and capabilities of its GS20 Exchange platform
Chairman's Statement
I am pleased to present on behalf of the board of directors of GST (the "Board") the interim report of the Company for the six months ended 30 September 2024.
Operational review
Angra Global
Angra Global operates under the AngraFX and Angra Global brand names and is an FCA approved Authorised Payment Institution ("API"), as well as holding a Canadian Money Services Business ("MSB") licence.
Angra Global provides a multi-currency e-wallet service, currently covering Sterling, Euro, US Dollar, Canadian Dollar, Chinese Yuan Renminbi and US Dollar Tether Token transactions. This service enables Angra customers to securely store their funds within Angra Global business accounts and facilitate seamless foreign exchange conversions and fund transfers through Angra's established and reliable banking partnerships, akin to a conventional business bank account, utilising technology developed by the Group's subsidiary in Singapore, GS Fintech Pte Ltd. Additionally, the MSB licence enables Angra to issue Sterling local accounts and Euro SEPA IBAN accounts to its clients, thereby providing a comprehensive one-stop business banking solution.
Angra has experienced substantial revenue growth during H1 25, which has continued post Period end. Â This growth has been closely linked to a significant rise in client volumes as the business continues to gain traction and market share following the establishment of Angra Global in H1 24. Â The Group's focus has been on expanding Angra's operations and sales teams as part of the Group's strategic intention for Angra Global to be a B2B-focused Neobank. Â By increasing headcount in these critical areas, Angra has effectively bolstered its service delivery capabilities, allowing the company to meet heightened demand while maintaining high service standards.
In addition to operational improvements, Angra is actively targeting over 2,000 UK-based Small Payment Institutions ("SPIs") as part of its growth strategy. Â This targeted approach aims to build a larger UK-focused client base for the company. Â Through these efforts, Angra is seeking to enhance its footprint, particularly in the UK market, capitalizing on rising demand for reliable and efficient foreign exchange services among SPIs.
GS20 Exchange
The Group's GS Fintech UAB business is a holder of a Crypto Currency Exchange Licence, registered in Lithuania, and launched the Company's GS20 cryptoasset exchange in November 2022. The GS20 Exchange is offering spot trading and over-the-counter trading desk services for popular cryptoassets, although it is not a pure cryptocurrency exchange.
The GS20 Exchange continues to attract increasing interest from high-net-worth individuals and corporate clients, leading to a steady rise in account openings and transaction volumes.  The positive growth trend is in line with the Board's expectations for the exchange within the crypto asset market.  Operationally, the GS20 Exchange has been focused on ensuring its technology is robust and appropriately enabled for future growth. The GS20 Exchange has made a number of improvements during the Period and it is expected that 2025 will be a pivotal year for the sector. The GS20 Exchange is well-positioned to benefit substantially from this favourable market outlook.
As part of the GS20 Exchange's growth plans, Noewe UAB, a Lithuania-based professional services firm, was recently engaged. Â This partnership aims to align GS Fintech UAB's financial year-end reporting with the Group's 31 March year-end. Â Additionally, Noewe UAB is providing guidance on regulatory compliance expectations through 2025, which will be invaluable in ensuring regulatory adherence is maintained and supporting GS Fintech UAB's ongoing growth.
Post Period end, on 11 December 2024, we were pleased to announce that GS Fintech UAB had entered into a legally binding Business Purchase Agreement to acquire the business and assets of Cake Pte. Ltd. and Cake DeFi UAB (together "CAKE"). The CAKE acquisition comprises a leading cryptocurrency investment platform, Bake, with a particularly strong presence in the DACH region, and is in line with the Company's strategy to expand and enhance the international presence and capabilities of the GS20 Exchange platform, providing greater value to both retail and institutional customers. I believe the acquisition marks a significant step for GST in strengthening the offering and scalability of its GS20 Exchange platform, which is central to the Company's GS Money initiative.  In particular, the acquisition will: significantly expand GS20 Exchange's user base, adding approximately 50,000 active crypto users; enhance the GS20 Exchange's technology stack, providing seamless clearing and settlement of cross-border cryptoasset trades and related fiat currency payments; and create opportunities for substantial revenue growth, leveraging CAKE's strong historic financial performance and established market presence. The acquisition of CAKE is expected to complete on 2 January 2025.
Semnet
Prior to the start of the Period, on 6 December 2023 we announced that the Company had entered into an agreement to acquire 66.67% of the issued share capital of Semnet Pte Ltd ("Semnet"), a cybersecurity company based in Singapore, for a total consideration of US$1.8 million, payable through US$0.8 million in cash and US$1.0 million in new shares in the Company. The acquisition completed prior to the start of the Period on 29 February 2024 and Semnet is therefore consolidated in the Group results for the whole of H1 25. The share consideration was satisfied on the nine-month anniversary of completion, as anticipated and announced on 2 December 2024, through the provision of 58,844,713 ordinary shares in the Company to the vendors, allocated from the 60,000,000 ordinary shares held by the Company in treasury. This ensured that the acquisition of Semnet did not increase the issued share capital of the Company.
During the Period, Semnet has been focused on its core operations in cybersecurity and hardware across the ASEAN region, together with providing support to the Group's other businesses. Â Since the completion of the acquisition, Semnet has performed ahead of the Board's expectations and given the wider opportunities that Semnet is seeing, GST, in conjunction with Semnet's minority shareholders, explored options for the future of the business.
We were therefore delighted to announce, post Period end, on 15 October 2024, the signing of a non-binding Memorandum of Understanding ("MOU") with Trident Global Capital Pte Ltd ("TGC"), led by its director, Soon Huat Lim, who also serves as the CEO of Nasdaq-listed Trident Digital Tech Holdings Ltd (NASDAQ:TDTH). Â The MOU outlined TGC's proposed role in guiding and assisting Semnet through strategic preparations for a potential listing on NASDAQ in the US (the "Potential Listing"). Â This was followed on 18 November 2024 by GST and TGC signing a legally binding Heads of Terms ("HoT") covering in more detail the assistance to be provided by TGC to the Company with regard to the Potential Listing.
The HoT contained certain legally binding clauses including:
- TGC will be responsible for, and will provide, necessary transaction expenses of both parties, which are expected to be approximately US$2 million. GST will commit an advance of 20% for the payment of the listing expenses and upon a successful IPO this amount will be reimbursed to GST.
- That TGC shall identify a suitable US-based corporate finance adviser and broker for the purpose of the Potential Listing and send a copy of its proposed engagement letter for GST's review before it is signed.
- The parties agree that the proposed valuation ascribed to 100% of Semnet for the Potential Listing will be US$54 million, of which GST's 67% ownership of Semnet is agreed to be valued at US$36 million subject to the Potential Listing being successfully completed.
We look forward to providing further updates in due course, as the Potential Listing progresses.
Corporate
On 29 November 2023, the Company entered into an option to purchase agreement to acquire 60% of the share capital of EasySend Ltd ("EasySend"), a Northern Ireland incorporated company operating a cross-border payments business. EasySend is a an FCA approved API, conducting cross-border payment services. Completion of the acquisition of EasySend is conditional, inter alia, on final due diligence, the entering into of definitive sale and purchase documentation and also on GST obtaining approval from the FCA for the change of control of EasySend, a regulated entity. Whilst the formally agreed period for entering into a definitive sale and purchase agreement ended on 30 November 2024, the parties continue to work towards the completion of the acquisition. In particular, EasySend, in consultation with GST, has been working on completing its development activities in Poland. Both parties wish to see this work completed before completion of the acquisition. The Group's acquisition of EasySend is therefore currently expected to complete in Q1 2025.
On 9 July 2024 the Company entered into a conditional agreement to acquire the entire issued share capital of Bonfirepay SL ("Bonfirepay"), a company incorporated and operating under the laws of Spain.  As stated at the time of entering into the conditional agreement, completion of the acquisition is conditional on the finalisation of Bonfirepay's registration as a Small Payment Institution (SPI) with the central bank of Spain, which has not yet occurred. Additionally, we continue to conduct due diligence on Bonfirepay. Whilst we believe the acquisition of Bonfirepay would be a good addition to the Group, it is not an immediate strategic priority and a decision will be taken in Q1 2025 whether to continue with this proposed acquisition.
The Group continues to assess further potential complementary acquisition opportunities, in addition to the acquisition of CAKE announced on 11 December 2024, and further acquisitions remain a key part of the Group's expansion strategy.
Funding
In order to accelerate the implementation of the Group's GS Money strategy, including via acquisition, the Company has undertaken fundraising activities, as the Board has deemed appropriate, to facilitate the maximisation of overall shareholder value. Against this background, on 29 April 2024 the Company raised gross proceeds of £1,250,000 through a placing of 119,047,619 Ordinary Shares at a price of 1.05 pence per share.
The Board is mindful of dilution for existing shareholders, and the Company will only undertake further fundraising activities if the Board believes additional capital is required to achieve the Company's strategic goals.
Summary
H1 25 was a period of significant development for the Group, with a substantial increase in revenues and significantly reduced losses. We are a focused, 'pure play' fintech group with solid platforms on which to build as we continue to develop and roll out our GS Money solutions.
Our stated strategy with GS Money is to make cross-border payments quick and affordable to an addressable market of millions of participants by netting and settling trades through a stablecoin-based payments network. With Angra Global, the Group has both an FCA approved API and a Canadian MSB licence to enable the Group to conduct fast, secure, and low-cost foreign exchange business and payment services internationally, together with the ability to offer further services.
With the GS20 Exchange we have a regulated, operational, trading platform offering spot trading and over-the-counter trading desk services for popular cryptoassets, although it is much more than a pure cryptocurrency exchange, providing the clearing and settlement needs of both retail and institutional customers with high compliance and security standards.
The addition of Semnet has provided vital cybersecurity skills to the Group and we are excited to be progressing the plans for Semnet to list on NASDAQ in the US.
In the second half of the financial year we are looking to continue to grow revenues substantially from all the Group's businesses and we look forward to completing the acquisition of CAKE, and integrating it with our GS20 Exchange. We will also continue to explore further value enhancing acquisition opportunities that can assist with accelerating the development of the Group.
I believe GST is extremely well positioned for the future and I look forward to reporting on our further progress in the coming months.
Tone Kay Kim GOHÂ Chairman
Financial Review
The Group's interim financial statements represent a full six month contribution from all subsidiaries, including Semnet.
Income Analysis
Revenue for the Period grew nearly nine fold to US$2.23 million (H1 24 US$0.26 million), as the Group continued to execute its strategy and all Group entities demonstrated significant growth and expansion of their operations.
Whilst the Group continues to invest in the development of its businesses, losses narrowed significantly in the Period, reflecting more stable and efficient operations. The net loss for the Period of US$0.07 million compared to a net loss of US$0.74 million in H1 24. While losses persisted, the trend of reducing losses and significantly increased revenues provides the Board with confidence for the future of the Group.
Balance Sheet Analysis
The Group cash position improved to US$2.91 million as at 30 September 2024 (30 September 2023 US$2.20 million). The increase in cash reserves are reflective of better cash flow management, driven by higher revenues and more efficient cost control, coupled with the fundraise undertaken to raise gross proceeds of £1.25 million in April 2024.
Net assets as at 30 September 2024 increased significantly to US$7.13 million compared to US$4.38m at 30 September 2023 following the acquisition of Semnet and the progress of the Group's businesses.
Summary
The financial performance for the Period shows marked improvement compared to the previous year. The Group's net loss has significantly narrowed, driven by higher revenues, especially from Semnet, GS Fintech Singapore, GS Fintech UAB and Angra (UK). Â The strengthened cash position and increased net assets suggest that the Group is on a path to sustainable financial stability. Â Continued focus on profitability and operational efficiency will be critical in maintaining this upward momentum moving forward.
Director's Responsibilities Statement
We confirm that to the best of our knowledge:
(a) the unaudited condensed interim financial statements for the Period have been prepared in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). Download full set Interim Results here:
Enquiries:
The Company
Tone Goh, Executive Chairman
+65 6444 2988
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Financial Adviser
First Sentinel Corporate Finance
+44 (0)20 3855 5551  
Brian Stockbridge / Gabrielle Cordeiro
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Broker
CMC Markets
+44 (0)20 3003 8632
Douglas Crippen
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Financial PR & Investor Relations
IFC Advisory Limited
Tim Metcalfe / Graham Herring / Florence Chandler
+44 20 (0) 3934 6630