Bango (AIM: BGO), the mobile web payments and analytics company,is pleased to provide an update on business activities and details of a placing of new ordinary shares.
New relationships: Microsoft, Google Play, MasterCard
Bango is pleased to confirm that it continues to explore and progress new business opportunities and announces that it has entered into a number of new relationships with the following partners:
· After the year end, an agreement was signed with Microsoft relating to Bango payment services. The relationship is at a very early stage and it is not possible to accurately forecast what level of business this agreement may generate. Microsoft has existing mobile payment capabilities and relationships which it has previously used and therefore use of Bango services, if any, is harder to forecast.
· Mobile Network Operators ("MNOs") have approached Bango to use the Bango payment platform to connect their billing systems to the Google Play App Store for Android. Bango is pleased to report that the first such integration is now underway.
· On 7 May 2012, MasterCard announced that Bango has become a technology partner for the PayPass mobile wallet. This will allow Bango to use the PayPass wallet as a payment provider for obtaining end user funds, in addition to the established connections with MNOs, credit card issuers and PayPal. Mobile wallets are not currently widely used, but as they become more popular and are able to support more apps and web access, the Board believes that Bango is in a good position to build on this relationship. More information is available at www.bangoinvestor.com.
Developing relationships: Amazon, Facebook
The agreements signed with Amazon and Facebook, as announced on 8 December 2011 and 7 February 2012 respectively, as expected, did not generate significant revenue in the last fiscal year. The relationships continue to develop and management is encouraged by progress to date. On 10 May 2012 Facebook announced the Facebook App Centre, allowing users to search and pay for mobile apps.
A patent has been filed by Bango relating to one of Bango's significant innovatio's significant innovations which is likely to be used in this work and for future App store customers.
The Board continues to believe that it is too early in the relationship to accurately forecast the level of business which these new relationships may generate.
Blackberry App World Growth
Bango's payment services for the RIM app store, Blackberry App World™, have now successfully gone live with more than 40 MNOs across 34 countries. These connections cover mobile operators with approximately 360 million subscribers, compared with 116 million in March 2011. Dozens of additional integrations are underway covering a total of more than 900 million subscribers. New territories include operators in South America and the first Asian operators which bring with them significant numbers of mobile users. These territories match the growth Blackberry has reported in emerging markets.
Growth in transaction volumes has continued from a wide range of mobile applications and websites including NBA, CNN, Thomson Reuters and Telefonica-O2, more than doubling in the last year. Android, Apple, Blackberry, Windows and other devices all drive analytics traffic, and there is technical and commercial synergy between this activity and the Bango payment platform. During the second half, Bango Analytics was enhanced to cover an increased range of mobile operating systems, to improve HTML5 capabilities and to add a wide range of new reporting and exporting options. A new method for measuring the effectiveness of mobile advertising in driving mobile App downloads is in particular generating significant new business interest.
Strengthening the Management Team & Board Change
The Board believes that there is potential for significant growth in business from new and established customers. Bango has therefore started the recruitment process for a Chief Operating Officer (COO), to strengthen the management team and lead key operational functions that currently report to the CEO or CFO. This is expected to strengthen Bango's capability to continue to deliver the high levels of service expected by our industry leading App store, payment provider and content provider customers and partners as our business grows - especially in the USA. It will also assist Bango to further commercialize the opportunities that are now arising.
In addition, Peter Saxton, Bango's CFO, has notified the Board of his wish to retire, on a schedule to be agreed with the Board that will ensure an orderly hand-over to a new CFO. This process is expected to be completed by November 2012. Peter has been with Bango since 2004 and the Board has been very grateful for his significant contribution to the Bango business during that period. Further details will be announced once a suitable candidate has been identified and a formal handover date agreed with Peter Saxton.
Proposed Placing of New Ordinary Shares and Use of Proceeds
Bango is also pleased to announce that it has conducted a proposed placing with institutional investors of 2,355,000 new ordinary shares at 138 pence per share to raise approximately £3.25 million (approximately £3 million net of expenses) (the "Placing"). Bango intends to use the net proceeds of the Placing as follows:
· to increase the investment resources available to the Board with a view to developing the pipeline of existing and future strategic relationships to their full potential;
· to strengthen Bango's presence in the United States, particularly on the West Coast where an increasing number of Bango's strategic partners are based, so that Bango can greater develop and service those relationships; and
· to enhance the management team through the recruitment of a Chief Operating Officer to manage Bango's operations and service delivery worldwide.
The Placing is conditional upon the certain shareholder resolutions being passed by the requisite majority at a general meeting of Bango. If the resolutions are not passed by the requisite majority, the Placing will not proceed. Accordingly, a circular containing a notice convening a general meeting to be held at the registered office of the Company at 5 Westbrook Centre, Milton Road, Cambridge CB4 1YG at 2.00 p.m. on 8 June 2012 is expected to be posted to shareholders tomorrow. A copy of the circular will be available at www.bango.com. Application will be made for the new ordinary shares to be admitted to trading on AIM and it is expected that dealings will commence on 11 June 2012.
Following the Placing, Bango will have 41,022,322 ordinary shares in issue and each share has the right to one vote. Therefore, for the purposes of the Financial Services Authority's ("FSA") Disclosure and Transparency Rules, the total number of voting rights in Bango will be 41,022,322. This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify Bango of their interests in, or change to their interests in, Bango PLC under the FSA's Disclosure and Transparency Rules.
The Placing has only been made to persons (i) falling within the description of persons that, if they were clients of Cenkos Securities PLC, could be categorised as a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FSA's Conduct of Business Sourcebook, (ii) of a kind described in paragraph 5 of Article 19 or paragraph 2 of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), and (iii) who fall within the provisions of Article 2.1(e)(i) of the Prospectus Directive and no other person may participate in the Placing or rely on any communication relating to it.
Financial Update (for the twelve months to 31 March 2012)
Financial results for the year, subject to final audit, will be in line with previous expectations. LBITDA & SBP (loss before interest, tax, depreciation, amortisation and share-based payments) at £0.4m (FY2011: loss of £0.4m). The total loss after tax is expected to be approximately £0.8m (FY2011: loss of £0.7m) reflecting an increased amortisation charge for previously capitalized R&D.
Cash at 31 March 2012 was £1.8m, as expected (FY2011: £2.7m).
Bango intends to announce final results for the year ended 31 March 2012 in June 2012.
Ray Anderson, CEO of Bango plc, commented:
"We have been extremely encouraged by the adoption of Bango technology by leading industry players. The power of Bango's increasingly widely adopted platform is that each new major App store, payment provider or content provider addition brings benefits to existing customers and also makes the platform increasingly attractive to new customers.
"Our focus is now on strengthening the Bango business and technology to deliver our services on the scale demanded by our App store payment provider and content provider customers. At the same time we are enabling Bango to seize the new opportunities that are emerging as a result of recent progress in building out our platform and our ever increasing network of direct carrier billing connections.
"We remain committed to the tight management of the business and are confident we have a sufficiently robust financial platform from which to capitalize on these opportunities."