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Cornerstone FS PLC on Friday said it entered into a deal to sell its non-core subsidiary Avila House Ltd to Aspire Commerce Ltd, and it signed a software licencing deal with the company.
The London-based cloud payment provider has agreed to sell Avila House, a small electronic money institution, to Aspire for £300,000 in cash. Aspire is a Chester, England-based provider of payment accounts and lending services, trading as Muloot Money.
Cornerstone also entered a software licencing deal for Aspire to licence the Cornerstone platform for 12 months, which Cornerstone said will generate a minimum of £290,000 for the company.
Cornerstone acquired Avila in 2020 to gain a small electronic money institution under its portfolio, which is an entity that can issue electronic money as well as provide payment services.
The company’s primary operating subsidiary, Cornerstone Payment Solutions Ltd, was approved as an authorised electronic money institution by the Financial Conduct Authority in 2021. Cornerstone FS said this ‘supplanted the more limited licence’ it held through Avila.
Cornerstone added that it is in the best interests of the company to realise the value of Avila through its sale to Aspire, which is a non-competing entity. Aspire intends to utilise Cornerstone’s services for any foreign exchange payments made on behalf of its clients.
Avila recorded annual revenue of £197,996 in 2021 and a profit of £2,418. Overall, Cornerstone reported a pretax loss of £4.2 million in 2021, on revenue of £2.3 million.
Cornerstone said the sale of Avila will be ‘minimally beneficial’ to the results of the Cornerstone Group, due to a small amount of standalone entity costs that will be saved following the disposal.
‘This is an excellent deal for Cornerstone and reflects the value of an electronic 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,’ Cornerstone Chief Executive James Hickman said.
Shares in Cornerstone FS were down 2.6% to 5.60 pence on Friday morning in London.
By Jaskeet Briah, Alliance News reporter
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