Monitise puts itself up for sale;  warns on full year revenues

Monitise puts itself up for sale; warns on full year revenues

Mobile banking company Monitise has put itself in the shop window, as its stock price deteriorates still further and it warns on full year revenues.

Shares in the loss-making business dropped 10% as the company warned of a likely drop in FY 2015 revenue, compared to previous guidance of at least 25% growth. The company's share price has dropped 75% over the past year as it refocusses its business in the face of an unpredictable and rapidly changing market for mobile financial services.

Monitise is currently undertaking a painful transition to a product-based recurring revenue model, an effort which is reflected in a dramatic 47% drop in license revenue to £4.4 million. Development and integration revenue also fell 13% to £21.8m, while subscription and transaction revenues were up eight per cent to £16.2m.

For 2015, the company is forecasting a full year EBITDA loss of £40-50m/$60-76m, although it reiterates its expectation to be EBITDA profitable in FY 2016.

Monitise says it is now undertaking a strategic review of its options "in light of recent share price weakness, shareholder feedback and industry developments".

The Board has appointed Moelis & Company as its advisor and has invited expressions of interest for a merger or full-scale takeover from potential suitors.

In a statement, the company says: "The Board believes that the company has an exciting future as an independent business, however it recognises that there may be other businesses which could leverage Monitise’s capabilities for digital commerce enablement to significantly accelerate the growth of the business and take maximum advantage of the growth opportunities in the market today. The strategic review is expected to be all encompassing and will include consideration of corporate transactions and stock market listing options."

Comments: (4)

A Finextra member
A Finextra member 22 January, 2015, 14:031 like 1 like

That age old question, how do you monetise Monitise?  Never knowingly answered except by its well-paid employees.  I sometimes wonder about the funding models prevalent in our industry...

A Finextra member
A Finextra member 23 January, 2015, 07:561 like 1 like

A very top heavy organisation and graveyard for ex payment scheme employees! I have to repeat what Lukes said three years ago at the Visa forum... "Groupon can't make money, they will be gone in a year". More time spent running the company rather than running others down is always better. In my view they have been funded by the two largest schemes in a game of cat and mouse. I can't see how an ageing technology can survive. It was a great idea seven or eight years ago but technology and its adoption have moved way ahead of Monetise. Shame really, but when you're most important USP is that you were nimble, a start-up and not corporate then you employee people from the biggest schemes and make it more corporate then ever it’s hardly surprising (in my view) that this is occurring. 

A Finextra member
A Finextra member 23 January, 2015, 08:33Be the first to give this comment the thumbs up 0 likes

It has been a long list of mezz and other investments - Losses constantly increasing alongside revenues.... first mover advantage does not confer long term profitability....  there is money to be made here.... we will see by who, in the fullness of time

A Finextra member
A Finextra member 28 January, 2015, 11:47Be the first to give this comment the thumbs up 0 likes

Agree with the general consensus here that Monetise's time has passed.

Put it this way. Is there anyone, anywhere, looking to mimic or create similar technology? No.

Or put it another way. How many of their clients are happy with the service and see the technology as part of their long term mobile banking strategy. Not many.

What is their customer install base like and how much has it grown over the last 12 months?

I doubt we've seen the last of dramatic announcements to the market from these guys. Share price can't go anywhere but down.