Monitise plc (LSE: MONI) ("Monitise" or the "Company") announces its unaudited interim results for the six months ended 31 December 2015, with results in line with the trading update given on 21 January 2016.
Financial Summary and Outlook
· H1 FY 2016 revenue of £33.4m (H1 FY 2015: £42.4m), with revenue in the second half anticipated to be broadly similar
· EBITDA losses reduced to £20.2m (H1 FY 2015: £30.8m loss), with existing businesses generating positive EBITDA going forward
· Targeted investment in developing our new cloud-based offering, FINkit®
· Decisive action on costs has been taken and a further material reduction in total costs is expected in H2 FY 2016
o Total costs of £53.6m in H1 FY 2016 (H1 FY 2015: £69.4m) projected to reduce by
approximately £3m per month in second half
· Monitise is projecting H2 FY 2016 to be EBITDA positive
· Gross cash at 31 December 2015 of £53.4m and prospective EBITDA positive trading for H2 FY 2016 means the business is sufficiently well funded to meet its future plans
· A non-cash impairment charge in relation to non-cloud intangible assets of £166.8m was made
· During the period exceptional costs of £8.4m have been recognised as part of the business restructuring. Offsetting exceptional credits of £7.4m have been recognised, including £5m following a restructuring of customer contracts
· Our customer relationships have remained strong during this period, our pipeline is robust and continues to develop, we are well progressed with a number of our existing and prospective customers who are interested in using our cloud-based offering through FINkit®, and we have successfully proven the capabilities of FINkit® through a customer proof of concept
· Tighter cost discipline will be maintained throughout FY 2016 and beyond whilst we continue to invest in our cloud business, making sure such investment is proportionate to the size and timing of customer contracts
· Ongoing cost disciplines have improved transparency and accountability enabling each business unit to have full ownership of their respective P&Ls
· We continue to evaluate all assets within the Monitise group to ensure they remain core to our proposition
Monitise Chairman Peter Ayliffe said: "The essential transition to cloud-based services and sustainable recurring revenues, continues to be very challenging. However, the focus on ensuring we have developed a relevant, market leading proposition whilst also achieving EBITDA profitability for the second half of FY16, means that we enter this next phase in our transition with optimism. We are all now focused on executing our plans with successful delivery of our cloud-based services at the heart of our future."
Monitise CEO Lee Cameron said: "Having taken the tough decisions and defined a clear path to take the business forward, Monitise is not just a leaner business; it is stronger and healthier. We are proud of our market leading technology assets, world class digital experts across our businesses, a strong history and heritage of being trusted to deliver bank grade services to highly regulated organisations and an enviable client list who remain supportive of our strategy.
We have faced many challenges during the last six months, and have further work to do to restore investor confidence in our business, but we are adequately funded and I am confident we will be EBITDA positive in the second half of FY16. Investment in FINkit® will be proportionate to the timing and scale of contracts signed and we will continue to evaluate all assets in order to preserve and maximise value for all stakeholders. Our mission is to become the global toolkit that enables smarter and faster innovation for our clients where security, compliance and performance are mandatory."