Monitise H1 revenue soars

Source: Monitise

Monitise (LSE: MONI), the technology and services company delivering mobile banking, payments and commerce networks worldwide, announces its unaudited interim results for the six months ended 31 December, 2011.

Financial highlights

• H1 FY 2012 revenue of £15.8m ($24.5m ), three times H1 FY 2011's £5.3m ($8.2m) and 12% higher than FY 2011
• EBITDA2 in Live Operations3 of £4.8m ($7.5m), five times H1 FY 2011 and greater than £3.4m ($5.2m) in FY 2011
• Group EBITDA2 loss reduced from £7.5m ($11.6m) in H1 FY 2011 to £6.9m ($10.7m) in H1 FY 2012
• Group pretax profit of £1.1m ($1.6m), reflecting one-time gain of £10.1m ($15.6m), related to acquisition of majority 51% holding in Monitise Americas joint venture
• Strong cash position of £43m ($67m), debt free
• Record order book of £83m ($128m) at 31 December 2011, with a further £120m ($186m) of revenues with a high degree of visibility from existing contracts over the next five years, totalling £203m ($314m)

1 Foreign exchange rate for Sterling/US Dollar used in the interim results is $1.55, being the rate as at 31 December 2011
2 EBITDA is defined as operating profit/loss before depreciation, amortisation, share-based payment charges and one-off gains made on the acquisition of subsidiaries
3 Live operations comprise Monitise UK, Monitise US and Global Accounts (incl Visa Inc., Visa Europe and Travelex)

Business highlights

• Demand accelerates for Monitise mobile money services

o Monitise's Enterprise Platform is now enabling billions of pounds of transactions per annum and rising
o 480m transactions a year are processed across the platform, compared with 120m transactions per annum in December 2010
o At peak times, more than 1m customers daily are using Monitise services to manage their money in real time via their mobile handsets
o Monitise and Visa Europe delivered the first pan-European mobile person-to-person payments and alerts service
o Strategic partner RBS extends its hugely successful retail mobile banking apps for for personal customers to mobile business banking customers via new range of apps for iPhone, iPad and iPod touch that Monitise helped to develop

• Step change in US market

o Visa Inc., in collaboration with Monitise, announced on 8 February, 2012, new mobile services offered via its Debit Processing Service (DPS), the largest issuer processor of Visa transactions in the US. DPS allows financial institutions to offer their account holders the ability to monitor account history and balances, transfer funds between accounts, and receive instant transaction alerts on their mobiles
o Acquisition of FIS's 51% majority stake in joint venture, Monitise Americas, enables Monitise to sell directly into the US market
o Five-year strategic partnership entered with FIS to create innovative mobile money services for existing and new clients via a licensing, services and development agreement involving multi-million dollar per annum revenues
o U.S. Bank partnered with Monitise Americas and FIS to offer a new mobile app for U.S. Bank ReliaCard Visa cardholders in 16 states
o Frank D'Angelo, former FIS Executive Vice President of Payment Solutions, joins as Executive Chairman of Monitise's US business

• Powerful partnerships deepened in Europe

o Alliance with Visa Europe strengthened on 31 October 2011 via a strategic investment of £24.7m ($38.3m) in Monitise made by Visa Europe to assist in the delivery of its 'Future of Payments' strategy
o Launch of alerts service alongside bill pay and person-to-person services, allowing registered users to transfer funds to any Visa cardholder in Europe from their mobile

• Mobile commerce launch in UK

o Monitise joint venture, the Mobile Money Network™, launched Simply Tap™ using the Monitise Enterprise Platform
o The Carphone Warehouse, HMV, Thorntons, Goldsmiths, thehut.com, Pretty Green and moreTvicar.com among launch phase retailers, with more announcements to follow shortly

• Worldwide reach broadened

o In India, the launch of Monitise's mobile payments service through a 50/50 joint venture with Visa Inc. is progressing with further announcements regarding partner banks expected in the coming weeks
o In the Asia Pacific region, a mid-2012 launch is planned with local partner JETCO, the major ATM switch serving the majority of banks in Hong Kong, with one of the initial launch clients for mobile payments being PCCW mobile. In Indonesia, the joint venture with Astra subsidiary AGIT will also be launching an innovative payment service around this time.
o In Africa, the Central Bank of Nigeria licenced the Monitise mobile money platform in the country with person-to-person transfers, salary payments and airtime top-up services already live with MainStreet Bank. Other banks in Nigeria are expected to become members of the Monitise mobile payments ecosystem over the coming months

• Board strengthened - New Non-Executive Director appointments

o Peter Ayliffe, Visa Europe President and Chief Executive, appointed November 2011
o Brian McBride, previously Managing Director of Amazon.com in the UK, appointed September 2011

Outlook

• We expect revenue to continue to grow during the second half from existing partnerships and have increased our guidance to £34m ($53m) for FY 2012 from £28m ($43m)

• Gross margin guidance is increased to more than 70% by H2 FY 2013, driven by a greater proportion of user generated revenues, which have relatively higher margins, as clients evolve through the development phases to live operations

• We expect continued growing profits from our live operations

• Continued opex investment in value creating opportunities

• Cash break-even remains on target for December 2013

• Monitise is well funded with a cash balance of £43m ($67m)

• The Board is encouraged by the performance of the company and looks to the future with confidence

Alastair Lukies, Monitise Group Chief Executive Officer, said: "Our growth continues to accelerate and we had an excellent six months to the end of December 2011 with encouraging signs across all our key financial, operational and adoption metrics. Our rapidly growing order book, increasing pipeline and deepening partnerships further validate Monitise's leadership role as the enabler of choice in the mobile money industry.

Monitise's Enterprise Platform is the leading global, bank-grade enabler of mobile money, relevant to both the banked and unbanked markets, offering the widest range of services for consumers on the move who want to manage their money and shop via their handsets. This platform is scaling globally through our continued investment as we deliver against our strategy. We have particularly seen momentum accelerate in the US mobile money market and we believe we are well placed to benefit from this."

Duncan McIntyre, Monitise Group Chairman, said: "The global market for mobile banking, payments and commerce across developed, hybrid and emerging markets has certainly reached a tipping point. Monitise has established its position as the global leader in this exciting space.

"The business goes from strength to strength and during the first half we continued to build on our networks of relationships and partnerships, including the recent key strategic agreements with FIS and Visa. The depth of experience across our Board has been further strengthened and we welcome Peter Ayliffe and Brian McBride as non-executive directors. I am also delighted to welcome Frank D'Angelo as Executive Chairman to our business in the US where our prospects look brighter than ever. Monitise is extremely well positioned to deliver ongoing value for our shareholders." 

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