GSTechnologies Limited (LSE: GST), the fintech company, is pleased to announce the Company's audited results for the year ended 31 March 2024 ("FY24").
Highlights
First full year reporting period as a pure play fintech group following the completion of the disposal of EMS Wiring Systems Pte Ltd in September 2022
Completion of the acquisition of PAYPT Finance Ltd ("PAYPT"), a Canadian company holding a Canadian Money Services Business ("MSB") licence, in August 2023
Formation of Angra Global following the acquisition of PAYPT, with significant growth in H2 FY24 and in the current financial year as the business rolled out its multi-currency e-wallet service
Soft rollout of the GS20 Exchange completed and the development of the GS20 Exchange has progressed in accordance with the Board’s expectations
Completion of the acquisition of Semnet Pte Ltd ("Semnet"), a cybersecurity company based in Singapore, in 29 February 2024. Prior to the acquisition's completion, a US$36 million contract was secured for the sale of high-performance application servers and solutions specifically designed for artificial intelligence (AI). These solutions feature the cutting-edge NVIDIA HGX H800 8-GPUs
Option purchase agreement to acquire 60% of EasySend Ltd ("EasySend"), a Northern Ireland company operating a cross-border payments business. Completion expected later in 2024
Revenue for the year of US$1.55 million (FY23 reported: US$2.32 million, including discontinued operations), with a fivefold increase in revenue in H2 FY24 (US$1.29 million) versus H1 FY24 (US$0.26 million)
Net loss for the year of US$1.22 million (FY23: US$1.63 million loss) as the Company continued to invest in developing its GS Money solutions, with a significantly decreased net loss in H2 FY24 (US$0.31 million) versus H1 FY24 (US$0.78 million)
As of 31 March 2024, the Company had US$2.61 million in cash and cash equivalents (31 March 2023: US$4.25 million)
Post Period Highlights
Significant further growth seen with both Angra Global and the GS20 Exchange post year end
Placing raising gross proceeds of £1.25 million completed in April 2024
Proposed acquisition of Bonfirepay in Spain, aimed at enhancing Angra Global's B2B-focused cross-border payments and currency exchange services throughout the European Economic Area (EEA), as announced on 9 July 2024
Enquiries:
The Company
Tone Goh, Executive Chairman
+65 6444 2988
Financial Adviser
VSA Capital Limited
+44 (0)20 3005 5000
Simon Barton / Thomas Jackson
Broker
CMC Markets
+44 (0)20 3003 8632
Douglas Crippen
Financial PR & Investor Relations
IFC Advisory Limited
Tim Metcalfe / Graham Herring / Florence Chandler
+44 20 (0) 3934 6630
CHAIRMAN'S STATEMENT
During the year GST continued its strategic focus, started in early 2021, on developing a borderless neobanking platform providing next-generation digital money solutions, both organically and through complementary acquisitions. This is being undertaken under the Company's GS Money banner primarily through the Group's GS20 Exchange and Angra Global businesses, based on three initial use-cases: international money transfers, borderless accounts, and private stablecoin. In particular, the disposal of EMS, completed in September 2022, removed a loss-making business from the Group and FY24 was the first full year for GST as a 'pure play' fintech group.
During the year we completed two further significant acquisitions, PAYPT Finance Ltd ("PAYPT"), a Canadian company holding a Canadian Money Services Business ("MSB") licence, in August 2023, and Semnet Pte Ltd ("Semnet"), a cybersecurity company based in Singapore, in February 2024. Both these acquisitions have added important additional capabilities and sources of revenue for the Group, which, given the timing of the acquisitions, are not fully reflected in the FY24 financial statements.
I am very pleased with the progress we have made during the year, which has continued post period end. Group revenues increased fivefold from the first half of the year to the second half as we established various offerings and rolled these out commercially. Further significant growth is expected to be seen in the current financial year and the various businesses progress and are fully consolidated into the Group.
Angra Global
Angra Global was established during the year, in August 2023, following the completion of the acquisition of the entire issued share capital of PAYPT, in Canada, and its combination with Angra Limited in the UK. Angra Limited, which operates under the AngraFX brand name, is an established Financial Conduct Authority ("FCA") approved Authorised Payment Institution ("API"), conducting fast, secure, and low-cost foreign exchange business and payment services internationally, the first pillar of GS Money. The addition of PAYPT provided a Canadian MSB licence encompassing a range of financial activities, including: foreign exchange dealing; cryptoasset dealing; money transfer services; and authorisations for the issuance of debit cards and IBANs. The two businesses are now fully integrated, with the Angra Global team being led by GST directors Christopher Wellesley and Galvin Bai.
Following the establishment of Angra Global the focus has been on building an integrated offering, utilising new technologies that provide attractive solutions for customers and moving away from some of the lower margin traditional foreign exchange activities previous undertaken by Angra Limited and PAYPT.
Angra Global's multi-currency e-wallet service, initially covering Sterling, Euro, US Dollar, Canadian Dollar, Chinese Yuan Renminbi and US Dollar Tether Token transactions was launched on 1 September 2023 and continues to grow, with significant growth seen post the year end. This service enables Angra Global customers to securely store their funds within Angra Global business accounts and facilitates seamless foreign exchange conversions and fund transfers through Angra Global's established and reliable banking partnerships, akin to a conventional business bank account. Additionally, Angra Global is able to issue Sterling local accounts and Euro SEPA IBAN accounts to its clients, thereby providing a comprehensive one-stop business banking solution.
Angra Global is continuing to develop these services and the Group is focused on accelerating Angra Global's revenue, while simultaneously bolstering the Angra team to expand its B2B Neobank operations beyond the UK, serving companies of all sizes worldwide. As part of this expansion strategy, 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 based FCA approved API, conducting cross-border payment services. We believe the acquisition of a majority stake in EasySend will assist with growing the customer base for the Company's existing GS Money activities, in particular Angra Global, and provide access to additional technology, including EasySend's mobile terminal technology. It is intended that EasySend's founder and management team will remain with the business and that the 40% minority holding will be retained by EasySend's founder. As announced on 9 July 2024, the parties have mutually agreed to extend the period for entering into a definitive sale and purchase agreement until 30 November 2024. This extension will allow both parties time to refine the post-acquisition acquisition integration plan to ensure the acquisition aligns with GST's strategic objectives.
Post the year end, on 9 July 2024, we announced that GST has 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. This acquisition is expected to be a significant step in the Company's planned strategic expansion across Europe. The acquisition of Bonfirepay is aimed at enhancing Angra Global's B2B-focused cross-border payments and currency exchange services throughout the European Economic Area (EEA). Having a presence in Spain, through Bonfirepay, will enable Angra Global to collaborate with a broader network of European banks, non-banking financial institutions, and foreign currency providers, thereby reducing remittance costs and accelerating revenue growth. The 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.
Further complementary acquisitions are being investigated to accelerate Angra Global's growth and provide the licences and infrastructure needed to operate internationally.
GS20 Exchange
Following the acquisition of Glindala (now GS Fintech UAB), a holder of a Crypto Currency Exchange Licence registered in Lithuania, in August 2022, GST soft 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 soft launch was successfully completed during the year and the development of the GS20 Exchange has progressed in accordance with the Board's expectations, with a wider roll-out continuing. There has been a progressive build-up of registered users, and the Company are greatly encouraged by the market traction the GS20 Exchange is enjoying. The GS20 Exchange is generating revenue for the Company via trading commissions at varying levels depending on the type and size of transaction undertaken.
The GS20 Exchange entered into an agreement with Liminal, a leading blockchain wallet infrastructure company, just post the year end, to enhance the exchange's digital assets custody capabilities and to enable the exchange to securely scale its digital asset operations through HSM (hardware security module) and MPC (multi-party computation) backed architecture. This has enabled the successful launch of the GS20 Exchange vaults, facilitating self-custody for various blockchains including Bitcoin, Ethereum, Tron, and others. Ensuring digital asset security is a priority and the GS20 Exchange vaults are CCSS Level 3 certified, the highest standard in Cryptocurrency Security Standards (CCSS).
The Group complies with the recent implementation of EU-wide cryptocurrency regulations and is keenly observing developments in this space. Our commitment to compliance and innovation remains steadfast as we navigate these changes and continue to explore opportunities within the evolving regulatory landscape.
Semnet
The Group acquired 66.67% of the share capital of Semnet Pte Ltd ("Semnet"), a cybersecurity company based in Singapore, on 29 February 2024. Semnet is a profitable cybersecurity business that is providing the Company with expertise and licences that are a critical component to the advancement of the Company's GS Money and B2B Neobanking operations. Cybersecurity is of particular importance to both the Company's developing global neobank ecosystem under Angra Global and the GS20 Exchange.
Semnet has now been successfully integrated into the Group's operations and the Semnet team's experience and capabilities are already adding significant value to the Group's operations, particularly through enhanced cybersecurity support.
In addition to providing support to the Group's operations, Semnet has been successful in winning additional third-party business, including a US$36 million revenue contract with Ypsilon Technology Pte. Ltd that was recognised prior to the consolidation of Semnet in the Group.
Zheng Kang Wen Mervyn, an existing Director of Semnet, has been appointed as Sales and Marketing Director of Semnet and is supporting the Group in expanding Semnet's cybersecurity business. He is being assisted by a senior leadership team including GST director Galvin Bai and Lam Pek San, a 10% shareholder in Semnet.
Semnet was only consolidated into the Group on 1 March 2024, a month before the year end, but is trading ahead of the GST Board's expectations at the time of the acquisition and the business is achieving significant profitable growth.
Other Operations
As a further key pillar of the stablecoin activities that the Group intends to carry out in strategic jurisdictions, including the UK, the Company applied to the FCA for the Company's stablecoins to be admitted to the FCA Regulatory Sandbox. In June 2023, the Company was informed by the FCA that they had concluded that the Company's stablecoin application did not currently meet the FCA's strict criteria for admission to the FCA Regulatory Sandbox. As an alternative the FCA offered the Company a place on their Innovations Pathway programme, an initiative designed to support financial services firms in launching innovative products and services, which the Company was pleased to accept. Under the FCA Innovation Pathway programme, the Company was provided with a dedicated FCA case officer and a comprehensive range of support services, designed to assist GST to further develop the appropriate path for the progression of its stablecoin plans. This process has been extremely helpful in shaping the Company's future roadmap for its stablecoin activities which may involve a future Regulatory Sandbox application or preparation for regulatory authorisation without the need for supervised testing. Discussions with the FCA continue, but regulatory authorisation in the UK for the Company's stablecoins is not seen as an immediate strategic priority or necessity as the Group's other operations develop.
Fund Raising
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.
During the year the Company entered into an unsecured convertible loan facility to receive funding of up to US$1.6 million (the "Loan Facility") with an institutional investor. US$800,000 of the Loan Facility was drawn down. The Loan Facility was cancelled on 29 March 2023, with the second instalment of US$800,000 undrawn. On 4 April 2023 the remaining US$285,000 principal amount of the Loan Facility and the associated interest of US$28,500 (10%), was converted into new ordinary shares of no-par value in the capital of the Company ("Ordinary Shares"). Following this conversion no principal amount or associated interest remains outstanding under the Loan Facility.
On 17 May 2023 the Company has raised gross proceeds of £750,000 through a placing of 75,000,000 Ordinary Shares at a price of 1.0 pence per share.
On 14 November 2023, the Company raised gross proceeds of £847,000 through a placing of 77,000,000 Ordinary Shares at a price of 1.10 pence per share.
Post period end, on 23 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.
Board and People
I would like to take this opportunity to thank all of the GST Board and team for their hard work and dedication throughout the year.
In June 2023, Chong Loong Fatt Garies ("Garies Chong"), a Non-executive Director of the Company, resigned from the Board in order to focus on his other business interests. I would like to thank Garies for his contribution to GST and we wish him well for the future.
In January 2024 we welcomed Lord Christopher Wellesley to the Board as a Non-Executive Director. Christopher is an experienced banking and capital markets executive with over 30 years' experience in senior roles based in the UK, Hong Kong and the USA. He began working with the Group in the UK in September 2023 and has been appointed as Chief Executive Officer of Angra Limited. His significant international capital markets and trading experience has already proved to be very valuable to the Group.
Current trading
During April to June 2024, GST has experienced a notable increase in revenues, reflecting the effectiveness of the company's strategic initiatives and the strong performance of our subsidiaries. Each operating subsidiaries contributed significantly to this growth, with standout performances in key markets driven by increased adoption of our digital payment solutions and expanded partnerships with financial institutions. Our efforts to penetrate new markets and strengthen our presence in existing ones have yielded positive results, with new client acquisitions and expanded service agreements.
Summary
GST is now a focused, 'pure play', fintech group with two solid operational platforms, Angra Global and the GS20 Exchange, coupled with a profitable cybersecurity business, on which to build and continue to roll out our GS Money solutions.
Angra Global provides the first pillar of GS Money and is enjoying substantial growth with its multi-currency e-wallet service, particularly post year end. With additional services being added and further geographic expansion planned this growth is expected to accelerate.
Unlocking the demand for a large user base also requires a platform that can meet the clearing and settlement needs of both retail and institutional customers, with high compliance and security standards. The GS20 Exchange provides such a platform and following its soft launch is rapidly building its customer based as the second pillar of GS Money.
Whilst growing the Group organically and completing the acquisitions of EasySend and Bonfirepay, we will also continue to explore further value enhancing acquisition opportunities that are presented.
I would like to take this opportunity to thank all stakeholders, including the Group's staff, customers and GST shareholders for their continuing support.
GST has come a long way over the last three and a half years and I look forward to reporting on our further progress in the coming months.
Tone Kay Kim GOH
Executive Chairman
FINANCIAL REVIEW
The Group's financial statements include a full 12-month contribution from Angra Limited and GS Fintech UAB, with PAYPT (now Angra Global) being consolidated from 15 August 2023 and Semnet from 1 March 2024.
Income Analysis
Following the disposal of EMS, the Group's income during the year was solely derived from the Group's 'fintech' and cybersecurity businesses, which led to a decrease in revenue for the 12-months ended 31 March 2024 to US$1.55 million (2023: US$2.27 million) as these businesses remain in the developmental phase. However, the revenue from continuing operations has seen significant growth. The revenue for the year of US$1.55 million was a 90% increase on the revenue derived from continuing operations in FY 23, with a further significant increase seen during the year; H2 FY24 revenue of US$1.29 million was a fivefold increase over H1 FY24 (US$0.26 million).
The Group's operating loss before tax for the financial year was US$1.22 million, compared to the operating loss incurred in previous financial year of US$1.63 million as the Company continued to invest in developing its GS Money solutions, with a significantly decreased net loss in H2 FY24 (US$0.31 million) versus H1 FY24 (US$0.78 million).
Balance Sheet Analysis
Net assets as at 31 March 2024 amounted to US$6.24 million (31 March 2023: US$3.87 million). As at 31 March 2024, the Group had available cash of US$2.61 million (31 March 2022: US$4.25 million), with gross proceeds of £1.25 million (approximately US$1.60 million) being raised post period end in April 2024.
The Directors believe that the Group is in a stable financial position and has the financial resources to enable it to expand and grow its current operations and meet all its current liabilities, together with the ability to access further capital should an appropriate need arise. You may read our full year financial report below:
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