Monitise to break even sooner than expected; plans £24m placing

Source: Monitise

Monitise plc (LSE: MONI) ("Monitise", the "Company" or the "Group"), the technology and services company delivering mobile banking, payments and commerce networks worldwide, announces a trading update ahead of the announcement on 4 September 2012 of its financial results for the year ended 30 June 2012.

Operational Update

· As Monitise continues to enhance its reputation for delivering bank grade secure services for its customers, be it mobile banking, mobile payments or mobile commerce, the opportunities to enhance shareholder value continue to grow.

· The Company has invested significantly in its Monitise Enterprise Platform and technology over the past few years and is also delighted to have completed four major customer launches during June and July. The Company has a strong pipeline of future deployments.

· At the end of the 2011/2012 Financial Year, Monitise had £20m gross cash and £10m of debt from the acquisition of Clairmail. Monitise has repaid approximately half of the debt post year end.

· The Company is pleased to bring forward EBITDA breakeven guidance by a full quarter to September 2013.

· Customer feedback globally following the Clairmail acquisition has been very positive.

· The Company has also been approached by a number of global technology companies interested in partnering and reselling Monitise's capabilities.

[1] Foreign exchange rate for Sterling/US Dollar used is $1.56
[1] EBITDA is defined as operating profit/loss before depreciation, amortisation, share-based payment charges and one-off exceptional gains/losses

2011/2012 Financials in line with 17 July Trading Statement

· We stated in the July Trading Statement that from 2011/2012 we would account for the Group's interests in Joint Ventures in one line in the income statement (share of Associates and JVs) which is reported below EBITDA and Operating Profit. The unaudited results for the year for revenue and EBITDA are shown both on an equity and proportionate basis in note 1 below.

· On an equity basis, revenue in the year grew by approximately 140% from £15m to £36m and thom £15m to £36m and the EBITDA loss reduced from £12m to £10m.

· The order book The order book as at 30 June 2012 was more than £110m of committed orders, plus a further £160m of additional revenue with a high degree of visibility from existing contracts over the next five years, totalling £270m. Increased demand from existing customers and pipeline of new customer wins provides further confidence of future growth in the order book.

· Reiteration of revenue guidance for 2012/2013 of £70m ($110m) minimum.

Proposed Placing

· Certain existing strategic investors have provided strong expressions of interest to subscribe for shares for a value of up to £24 million. The Company has the ability to issue up to 81 million shares pursuant to the authorities granted by shareholders to the Board on 25 June 2012.

· The Company announces its intention to undertake a proposed placing of ordinary shares to raise gross proceeds of up to £24 million ("Proposed Placing") to take advantage of this demand.

· Discussions will take place with other major shareholders regarding the opportunity of taking part in the Proposed Placing on a non pre-emptive basis. Depending on demand the strategic investors may be scaled back.

· The Proposed Placing, once completed, will ensure that the Group maintains a strong balance sheet, and provides headroom for other investment opportunities.

· Canaccord Genuity Limited ("Canaccord") is acting as NOMAD and Sole Broker with respect to the Proposed Placing.

· The Company will announce the outcome of discussions with respect to the Proposed Placing on finalisation and signature of agreements.

Alastair Lukies, Group CEO, Monitise plc, said: "The Mobile Money industry is gaining more attention, investment and profile than ever before. At Monitise we believe that our bank and payment industry centric approach is delivering sustainable shareholder value and creates an infrastructure that will be used for generations. We are excited by the opportunities ahead of us and focused on delivering profitability earlier than anticipated."

Duncan McIntyre, Chairman, Monitise plc, added: "In June 2012 we completed our acquisition of Clairmail and then also launched four major customer releases which help to underpin our future growth and market leading position. The integration of Clairmail is progressing well and is further accelerating our strong growth in the US market.

We are in a unique position in this exciting industry and ensuring that we have a suitable capital base is vital if we are to deliver on the substantial potential of the business. We are delighted that our major partners are fully supportive of our strategy." 

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