London, UK, 22 May 2018

Edison issues outlook on eServGlobal (ESG)

eServGlobal enters FY18 with a reduced cost base and a fully funded balance sheet; we are forecasting the core business to be close to EBITDA break-even in FY18. With access to Mastercard's sales force and financial institution customer base, HomeSend has signed up a number of banks to use its cross-border payment platform. As these banks shift volumes onto the platform, this should drive strong growth in volumes and move the joint venture towards profitability.

We believe that the majority of the value of the company is provided by its stake in the HomeSend joint venture. We estimate that the share price is factoring in adoption of HomeSend by banking customers to the tune of c $5bn in transaction volumes, a small proportion of the cross-border payments market. Evidence of recent bank signings transferring cross-border payments over to the HomeSend platform will be key to supporting and driving the current share price. Contract wins in the core business could also have a more limited impact on the share price.

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