Monitise plc Preliminary Results for the year ended 30 June 2013

05 Sep 2013

REVENUE MORE THAN DOUBLES FOR FOURTH YEAR IN ROW

GROSS MARGIN RISES TO 76% FROM 66%, BOLSTERED BY USER GENERATED REVENUE INCLUDING PRODUCT LICENCES

MONITISE AND IBM ANNOUNCE SMARTER COMMERCE INITIATIVE

PETER AYLIFFE APPOINTED NEW CHAIRMAN

VALUE OF MONITISE MOBILE MONEY TRANSFERS AND PAYMENTS GROWS 150% TO $50BN

EXPECTED REVENUE GROWTH OF APPROXIMATELY 50% IN FY 2014

MONITISE ACQUIRES GRAPPLE, A LEADING MOBILE INNOVATION AGENCY

 

LONDON - Monitise plc (LSE: MONI)(“Monitise”, the “Company” or the “Group”) announces its audited preliminary results for the year ended 30 June 2013.

 

Financial Highlights

 

  • Full-year revenue more than doubled for the fourth year in succession, rising to £72.8m from £36.1m, an increase of 102%. Revenue growth was 50% on an organic basis(1).

 

  • Gross margin increased to 76% from 66% in FY 2012, with user generated margin particularly strong, owing to a number of significant product licence deals.

 

  • Group EBITDA(2)loss of £19.3m for the year (FY 2012: £10.4m), which takes into account the acquisition of Clairmail Inc., Mobile Money Network and eMerit Solutions, continued investment in scaling Monitise’s platform technology and Group service delivery capabilities as services were launched across three continents.

 

  • Adjusted3 loss for the year was £32.8m (FY 2012: £18.2m) and adjusted loss per share was 2.4p (FY 2012: 2.4p). Statutory Loss before tax in the year was £51.1m (FY 2012: £16.9m), with loss per share at 3.8p per share (FY 2012: 2.1p).

 

  • Group net cash of £85.6m at 30 June 2013.

 

Revenue and revenue growth by source

 

 

 

H1 2013

H2 2013

FY 2013

Revenue

£m

YoY% reported

YoY% organic

£m

YoY% reported

YoY% organic

£m

YoY% reported

YoY% organic

User generated*

14.2

164%

70%

29.2

311%

155%

43.4

247%

119%

Dev/integration

13.6

16%

-5%

15.8

33%

10%

29.4

25%

2%

Total

27.8

63%

22%

45.0

137%

74%

72.8

102%

50%

 

*User generated revenue in FY 2013 includes product licences of £13.7m

 

Board Appointments

 

  • Monitise announces that Peter Ayliffe, who has served as a Non-Executive Director on the Board of Monitise since November 2011, has been appointed Non-Executive Chairman of the Group. Peter, who has led Visa Europe as President and Chief Executive for seven and a half years, will assume his duties under his new role on 1 October, 2013, following his retirement from Visa Europe. He succeeds Duncan McIntyre, who is stepping down on 1 October. Duncan will continue as a special advisor to the Company.

 

  • Monitise is also pleased to announce today that Victor Dahir is joining the Board as Non-Executive Director with immediate effect, replacing Ellen Richey, as the Visa Inc. appointed director.

 

  • An announcement regarding Peter and Victor’s appointments, including details required under AIM Rules, is being released separately this morning.

 

Grapple Mobile Ltd - Acquisition Highlights

 

  • The Company announces the acquisition of Grapple Mobile Ltd, a leading European mobile innovation and design agency delivering smartphone and tablet solutions for leading European brands including Whitbread, Procter & Gamble, Sky and B&Q.

 

  • In a share-based deal, Monitise has acquired the entire issued share capital of Grapple. Initial consideration (net of cash) is to be satisfied by the issue of 28,640,748 Ordinary Monitise Shares, valued at £16.5m based on the closing share price of 53.75p on 4 September, 2013, with an earn-out consideration of up to £22.9m payable on the achievement of aggressive performance-related targets. 

 

  • Grapple will form part of Monitise Create, a division focused on designing and developing world-class digital strategies and user experiences.

 

  • The acquisition complements Monitise’s globally-recognised capabilities in creating, deploying and running intuitive, cutting-edge, and bank-grade mobile solutions for and with some of the world’s leading financial institutions, payment companies, network operators and technology businesses such as Visa, Telefónica, IBM, RBS, Lloyds, Cognizant and CGI.

 

IBM and Monitise Collaboration

 

  • In a separate release, issued 4 September, 2013, IBM (NYSE: IBM) and Monitise announced how the companies are now collaborating to extend the adoption of Mobile Money capabilities across the two businesses' client and partner networks. Visa Europe’s member banks will be among the first beneficiaries of the new partnership, drawing on IBM’s Smarter Commerce initiative with support from Monitise. IBM will provide a broad range of software, technology services and consulting, including IBM Mobile First solutions, to help power Monitise mobile services for Visa Europe.

 

 Outlook

 

 Our continued confidence is reflected in the following guidance:

 

  • Expected revenue growth of approximately 50% in FY 2014.

 

  • FY 2014 gross margin to be maintained above 70%.

 

  • The Group sees multiple opportunities in all geographies both from direct sales channels and its growing partner network.

 

  • A move to the London Stock Exchange’s main market is targeted in calendar 2014.

 

Operational Highlights

 

  • Strong growth in core business

 

  • Registered customers at 24m, compared with 17m a year ago.

 

  • Further growth in live transactions, with more than 3bn transactions on an annualised basis, compared with 1.6bn a year ago.

 

  • Processed payments and transfers now worth more than $50bn on an annualised basis, 150% higher than the $20bn a year ago.

 

Second-half highlights

 

  • Under a five-year agreement, Monitise became the preferred mobile payments and commerce technology partner for Telefónica Digital, the global innovation arm of Telefónica, one of the world’s largest telecommunications businesses with more than 316m subscribers in 24 countries. It operates under the O2, Movistar and Vivo commercial brands.

 

  • A new three-year deal was entered into with Visa Europe spanning the development and deployment of Mobile Money solutions for Europe’s leading financial institutions.

 

  • BBM Money, a person-to-person mobile payments service, was launched through Monitise Asia Pacific’s Joint Venture with Astra Graphia Information Technology in partnership with Indonesian financial institution PermataBank and BlackBerry.

 

  • A mobile point of sale (mPOS) partnership was created with Lloyds Bank Commercial Banking to develop a suite of mobile card acceptance solutions for the bank’s micro-merchant, start-up and small business customers. This agreement occurred shortly after the launch of Monitise’s white-labelled mPOS service for banks, mobile operators and acquirers.

 

  • The launch of an international partnership with Blackhawk Network, a leading prepaid payment network, was announced to make mobile gift card purchasing available to consumers through certain banks and financial institutions.

 

  • New business wins post year end

 

  • On 22 July, Monitise announced that in India, ICICI Bank had entered into an agreement with Movida, the Group’s Indian Joint Venture with Visa Inc., to enable ICICI payment cardholders to pay bills, recharge prepaid airtime and buy cinema tickets via their mobile.

 

  • On 12 August, Monitise announced an agreement with Desjardins Group, Canada’s leading cooperative financial group, to develop and deploy NFC (near field communication) mobile payment capabilities to its members and clients.

 

  • The Group has been selected and is progressing discussions with two commercial banks in Continental Europe regarding the implementation of mPOS services and looks forward to updating the market in due course.

 

Monitise Group CEO Alastair Lukies said:

 

“Monitise has delivered another financial year of very strong growth that reflects our standing as a category-leading specialist. By creating, developing, deploying and running 'bank', 'pay' and 'buy' solutions for our partners and clients around the world, we are playing our role in societies’ ever-quickening shift to Mobile Money, globally. Significant momentum via both our partner and direct sales channels continues to grow across the business.

 

I am honoured to announce Peter’s appointment as Chairman. Peter’s wealth of experience and insights will be invaluable in supporting us through the next phase of our growth. I would also like to take this opportunity to thank Duncan for his selfless and constant support and guidance as we have built Monitise into the trusted and proven business it has become. He has been an outstanding Chairman as the Company has grown from a start-up to a business that services more than 350 financial institutions and initiates payments, purchases and transfers across its platform technology worth more than $50 billion.


The acquisition of Grapple announced today, which will become part of our Monitise Create division, supports the growth of our creative capabilities and further reinforces our leading position as a technology enabler at the heart of the Mobile Money ecosystem. Combined with our very exciting Smarter Commerce initiative with IBM, we are executing against our strategy to bring together the global ecosystem in banking, payments and commerce. We are excited by the opportunities we can now pursue from our combined strengths.


We have made a positive start to our new year. We have a strong sales pipeline and broadening strategic partnerships allowing us to target revenue growth of approximately 50% in FY 2014.”


Monitise Chairman Duncan McIntyre added:

 

“This has been another strong year for the business, thanks to ongoing progress in our key areas of strategic focus as we build our business to meet the present and future needs of our partners and clients.

 

It has been tremendously exciting being part of Monitise’s journey to becoming a leading global Mobile Money specialist. I am delighted to be able to hand over the chair to Peter, a high-calibre executive with relevant and deep industry knowledge. Peterhas been a highly valuable member of the Board and I am delighted that he has agreed to succeed me as Chairman and oversee the next chapter in Monitise’s journey.

 

As a Group, we remain on track with our growth strategy and believe we are perfectly placed with our strong balance sheet and proven platform technology to further expand our market reach as we enable our customers’ ongoing expansion into Mobile Money.”

 

An analyst presentation will be held on Thursday 5 September 2013 at 9.00am BST at the London Stock Exchange, London, EC4M 7LS. A live webcast of the presentation will be available to view online via investor relations on www.monitise.com.A replay facility will be accessible viawww.monitise.com/investor_relationswithin 24 hours of the results presentation.

 

 

1Assuming Clairmail Inc. (now Monitise Americas Inc.) had been owned for the full twelve months in FY 2012.

2 EBITDA is defined as operating profit/loss before exceptional items, depreciation, amortisation, impairments and share-based payment charges.

3Adjustments comprise share-based payments, exceptional items, impairments and acquisition-related amortisation.

 

 

 

For further information

 

Monitise plc                                                                                     

Alastair Lukies, Chief Executive Officer

Lee Cameron, Chief Commercial Officer

Brad Petzer, Chief Financial Officer

Mike Keyworth, Chief Information Officer

 

Investor Relations

Andrew Griffin, Haya Herbert-Burns

investorrelations@monitise.com

 

Media Relations

Gavin Haycock                                          

Gavin.haycock@monitise.com

 

Canaccord Genuity                                                                                       

Simon Bridges, Cameron Duncan                                                                                                                

FTI Consulting                                                                         

Charles Palmer, Jon Snowball

 

 

 

 

Tel:  +44(0)20 3657 0900

 

 

 

 

 

Tel:  +44(0)20 3657 0366

 

 

 

Tel:  +44(0)20 3657 0362

 

 

 

Tel:  +44(0)20 7523 8000

 

 

Tel:  +44(0)20 7831 3113

 

 

Forward Looking Statements

 

This document includes forward looking statements. Whilst these forward looking statements are made in good faith they are based upon the information available to Monitise at the date of this document and upon current expectations, projections, market conditions and assumptions about future events. These forward looking statements are subject to risks, uncertainties and assumptions about the Group and should be treated with an appropriate degree of caution.

 

About Monitise

 

Monitise (LSE: MONI) is a world leader in Mobile Money - banking, paying and buying with a mobile device. Leading banks, payments companies, retailers and mobile networks utilise Monitise's technology platforms and services to securely connect people with their money. 

 

Already 24 million consumers benefit from our patented technology to 'bank anywhere', 'pay anyone' and 'buy anything', accounting for $50bn of payments, purchases and transfers annually. More information is available at www.monitise.com.