Losses engulf 63% first half revenue rise at Monitise

Source: Monitise

Monitise plc (LSE: MONI)("Monitise", the "Company" or the "Group")announces its unaudited interim results for the six months ended 31 December 2012.

Financial Highlights

  • H1 FY 2013 revenue of £27.8m, up 63% on H1 FY 2012; up 22% on an organic basis2.
  • Strong growth in user generated revenue on a reported and organic basis, up 164% and 70% respectively, rising on a reported basis to 51% of total revenues from 31% in H1 FY 2012 and 37% in H2 FY 2012.
  • Gross margins increased to 72% from 64% in H1 FY 2012, driven by a greater proportion of user generated revenue.
  • EBITDA3in Live Operations4 of £5.3m (H1 FY 2012: £5.1m).
  • EBITDA loss of £14.7m (H1 FY 2012 loss: £4.2m), in line with management expectations, reflecting the acquisition of Clairmail Inc., continued investment in scaling of the Monitise Enterprise Platform and Group service delivery capabilities.
  • Group pre-tax loss of £24.4m (H1 FY 2012: profit £1.1m).
  • Free cash outflow5was £21.6m in H1 FY 2013, compared to £22.6m in H2 FY 2012.
  • Gross cash of £106.4m as at 31 December 2012.

1) Foreign exchange rate for Sterling/US Dollar used in the interim results is $1.59.
2) Assuming Clairmail Inc. had been owned for the full six months in H1 FY 2012.
3) EBITDA is defined as operating profit/loss before exceptional items, depreciation, amortisation and share-based payment charges.
4) Live operations comprise Monitise UK, Monitise US and Global Accounts (incl Visa Inc. and Visa Europe).
5) Free cash flow comprises cash used in operating and investing activities, excluding exceptional items and net cash acquired on acquisitions of subsidiaries.


  • Full-year revenue target of at least £70m ($110m) on track, underpinned by orderbook and strong sales pipeline.
  • Gross margin expectations of at least 70% maintained for full year.
  • More and more banks are seeing the inevitability of mobile becoming their most important customer eng engagement channel.
  • Group's strengthened balance sheet provides ability for Monitise to further scale its offerings and invest in its platform capabilities in line with market demand and to enable its clients' customers to bank, pay and buy through the mobile channel.

Business Highlights

Value of payments and transfers initiated via the Monitise Enterprise Platform (MEP) is more than $31bn on an annualised basis, compared with $10bn a year ago.

Further growth in live transactions with 2bn transactions on an annualised basis, compared with 0.48bn in February 2012.

Registered customers 20m, compared with 6m in January 2012.

Acquisition of UK mobile commerce Joint Venture, the Mobile Money Network Ltd.

  • All-share deal allows Monitise to deploy the mobile checkout and marketplace technology across the Group's global mobile commerce platform for banks and payment partners.

Acquisition of eMerit Solutions Ltd.

  • Acquisition extends mobile point of sale (mPOS) capabilities of the Monitise Enterprise Platform and enhances Monitise's international offering to SME banking customers. The Group already has a strong pipeline of mPOS opportunities in UK and Europe, with existing partners including O2 and HSBC Merchant Services LLP, a wholly-owned subsidiary of Global Payments Inc., and one of the largest independent payment processors in the UK.

Global footprint broadened to help clients enable their customers to Bank Anywhere, Pay Anyone and Buy Anything:

  • Cognizant, a leading global provider of information technology and business process services, and Monitise announced an alliance to leverage the Group's Monitise Enterprise Platform.
  • On 23 January 2013, Monitise announced an alliance with CGI Group Inc., a leading global provider of information technology and business process services.
  • Intuit Inc. and Monitise working on delivery of new mobile solutions. The relationship is intended to be worldwide, with initial focus on Europe and United States.
  • Monitise announces today that it has formed a strategic partnership with Venda, the world's largest on-demand ecommerce provider. The partnership will fast track retailer adoption of Monitise's Instant Mobile Checkout by seamlessly integrating with Venda's commerce platform. More than 100 brands of all sizes use Venda's platform to handle millions of transactions each month. These include Universal Music, Fat Face, TK Maxx, Tate, Laura Ashley, Emma Bridgewater, Jimmy Choo, Paperchase, Royal Doulton, Wickes, Clothing at Tesco and Orange.

Pipeline of more than 100 financial institutions via partners and direct sales teams looking to adopt mobile banking, payments and commerce services developed by Monitise.

UK and Europe
Strategic partner Visa Europe has a strong pipeline of banks readying to launch person-to-person and alerts services developed in collaboration with Monitise.

Android and BlackBerry Fast Balance services deployed for HSBC in the UK.

Android service deployed for The Co-operative Bank following launch of iOS and BlackBerry services for the bank earlier in 2012.

Monitise named 'Best Technology Supplier 2012' on 4 February 2013 by Royal Bank of Scotland Group.

Monitise Americas Inc. (formerly Clairmail Inc.) cemented its position as the leading independent Mobile Money company in North America.

A number of large issuers of both debit and prepaid cards are now live with Visa Inc.'s mobile

Debit Processing Service (DPS) solution, which has been built and managed by Monitise. A growing number of US banks are preparing to launch services developed via Visa Inc.'s DPS, the largest issuer processor of Visa transactions in the US.

Monitise expects to announce new initiatives, in collaboration with Visa Inc., over the coming months.

Monitise Americas Inc. operations integration now complete.


  • Via Monitise's Asia Pacific Joint Venture, BlackBerry Messenger's first mobile payments service will be commercially launched in Indonesia later in February having recently received regulatory approval from Bank Indonesia, the country's central bank. A pilot launch went live on 1 February 2013.
  • In December 2012, mobile payment services in India went live via the Movida mobile payments Joint Venture between Visa Inc. and Monitise. The launch debuted with HDFC Bank, the second-largest private bank in the country. Over the coming months, Movida intends to announce further partner banks and services.

Alastair Lukies, Monitise Chief Executive Officer, said: "Monitise's performance during the six months ended 31 December 2012 saw revenues continue to rise on the previous period with gross margins lifted by the ongoing shift towards growing user generated revenues. Monitise's overallperformance during the period reflected the ongoing investment in scaling the business to meet the increasing global demand for Mobile Money and strategic moves taken to consolidate the Group's leadership position globally. Our vision is clear. As a result of our interoperable platform and ecosystem of customers and partners, consumers globally can bank anywhere, pay anyone and buy anything via their mobile.

As the only independent Mobile Money business with live services across Europe, America, India and the Far East, we have big aspirations and remain resolutely focused on our strategy to enable the world's leading financial institutions to make money mobile for everyone as money becomes digitised."

Duncan McIntyre, Monitise Chairman, said: "This has been yet another successful period in the Monitise journey. We were delighted with the strong investment community interest and support shown for our business with the capital raise carried out in December 2012. The proceeds from this are being used to rapidly scale our business as we enhance our global Mobile Money leadership position, laying deeper foundations for future growth.

During the period, we were delighted to welcome Mike Keyworth and Ellen Richey to our Board. I am also looking forward to welcoming Brad Petzer, whose appointment as the Group's Chief Financial Officer was announced on 4 January 2013, to the Board from 1 April 2013. Our experienced and professional management team and staff continue to work effectively to drive the Group forward." 

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