Shares in UK mobile banking outfit Monitise slumped after it reported a tripling of losses in its fiscal first half due to higher product development costs and slower-than-expected customer uptake.
Monitise stock fell 15%, or 2.25 pence, to 12.75 pence after the vendor reported a net loss of £7.0 million for the six months to 31 December 2007, compared to a £2.29 million loss in the year ago period.
The Morse spin-off says the soaring losses are due to "continued investment in the Monitise platform and further development of our intellectual property".
The vendor says development costs generated an operating loss of £7.6 million in the first half, although this includes a non-cash charge of £1.1 million.
Furthermore, although Monitise is reporting a slight rise in first half half revenue of £392,000, compared with £363,000 in the same period last year, the vendor says customer take up of its mobile banking and payments services "has been somewhat slower than we initially anticipated".
Around 110,000 customers have registered for its services so far but Monitise says it expects this to accelerate in line with marketing investment by bank partners.
Monitise says its mix of revenues is starting to move away from consultancy activity, with license income and transactional income "starting to flow". It expects transactional income to form a higher proportion of overall revenue in its second half.
Commenting on the results, Alastair Lukies, CEO, Monitise, says: "The strong interest shown in our new services makes us confident that we are allocating investment in the appropriate areas and we expect steady revenue growth from this over the coming months."
In the UK Monitise has agreements with RBS, NatWest, Ulster Bank, A&L, HSBC and first direct. The firm says a tier one bank is currently integrating its service, increasing the company's current account coverage from 37% to 53%.
Monitise is bullish about its joint venture with Metavante in the US where it has signed 20 banks to its services. Meanwhile it claims to have "progressed steadily" in the international market, extending a deal in Germany with T-Systems and discussing the establishment of the service in Australia, India and Africa with various potential partners.
The company is also working with Visa to develop a mobile pre-paid account services for the European market. The first pre-paid product arising from this partnership is expected to launch in the second half, says Monitise.