Monitise to raise £11.8m

Monitise to raise £11.8m

UK mobile banking outfit Monitise is raising £11.8 million through a share subscription which it will use to fund its development strategy and global expansion.

Morse spin-off Monitise says it has signed agreements with investors to subscribe for 78.6 million new ordinary shares, priced at 15 pence apiece.

The subscription shares will represent 23.6% of the issued ordinary share capital of Monitise immediately following completion of the subscription, says the vendor. New investors include Standard Chartered Bank and a subsidiary of Hong Kong telco PCCW Limited.

Monitise CEO Alastair Lukies says the subscription will provide Monitise with the financial strength and flexibility "to implement its growth plans in a timely way, continuing to take advantage of the increasing demand for mobile banking and payment services worldwide".

The £11.8 million (before expenses) to be raised via the subscription, together with current cash balances across the group in excess of £9.5 million will provide Monitise with total cash of approximately £21 million immediately following completion.

The vendor says the funds raised will provide sufficient flexibility for it to continue to implement its development strategy and that new investors can assist in the development of its business in a number of new territories.

Along with details of the share issue, Monitise has also released a pre-close update on trading for the twelve months ending 30 June 2008 and says trading for the year "has been broadly in line with expectations".

The group expects to report revenues close to market expectations, reflecting a significant half on half improvement, with second half revenues approximately two and a half times that recognised in the first half of the year.

Lukies says the group's "ongoing cash spend is beginning to plateau" and the company remains focused on its preferred "joint venture model" as it expand into other geographic markets.

In February Monitise reported a tripling of losses in its fiscal first half due to higher product development costs and slower-than-expected customer uptake.

The group 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.

At the time the vendor said the heavy losses were due to "continued investment in the Monitise platform and further development of our intellectual property". The group also said that customer take up of its mobile banking and payments services "has been somewhat slower than we initially anticipated".

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