Boxhill reaches deal with PDU to market high-value transfer service

Boxhill Technologies updated the market on Monday, after its announcement that it is launching a new high-value transfer service (HVTS) for transactions of more than €10m through its wholly-owned subsidiary Emex Technologies, on 28 July.

The AIM-traded firm said that, while its HVTS - dubbed emexGo - had not generated any revenue to date, it was a service that the board anticipated would produce “significant revenues” in the future, and provide for a substantial increase in the monies passing through Emex.

Emex receives ad valorem fees on all monies passed through emexGo, the board confirmed.

“The development of [the] HVTS has involved substantial investment,” the board explained in its statement.

“It has been agreed that part of this investment will be funded by Phillite D UK Limited (PDU), a company which between December 2014 and November 2016 undertook certain regulated payment processing activities on behalf of the group.”

Boxhill said PDU would market the HVTS to its clients as part of its offering of payment services, charging fees independently and not receiving any share of the processing fees.

“PDU's share of the investment costs - about £1.43m - will be met from future receipts secured by PDU on HVTS transactions where PDU will in some circumstances be acting as the principal and other circumstances as an agent.

“PDU's share of the investment costs are currently represented on the Boxhill balance sheet as a trade receivable.

As the company announced on 31 October, the “historic legal matters” surrounding its relationship with its former regulated payment processor, EU Pay Group, had been settled without any adverse cost implications.

PDU had - independently of Boxhill - taken responsibility for the amounts owed by EUPay to the group, the board said on Monday.

“As a result of the settlement, PDU is now in a position to pursue the collection of these amounts without any hindrance from the now settled litigation.

“This will facilitate the repayment of the amounts outstanding to the group - about £224k - under the arrangement.”

Additionally, and further to its announcement on 31 October, the company contracted an independent expert to undertake a valuation of the intangible assets included in the Timegrand acquisition announced on 10 April, in consultation with its auditors.

The increase in the value of those intangible assets - which principally consists of software - announced on 31 October, reflected the outcome of that independent valuation, the board said.

“The company confirms that it continues in its search for the best candidate to perform the chief executive officer role for the group,” its update concluded.