Tip Update Monitise PLC (uk:MONI)
Our previous tip
- We said Buy
- When 8 July 2010
- Price 18p
- Tip performance to date +106%
Mobile banking platform provider
New deals, including a five-year contract with Visa, and an extension of an existing relationship with RBS has propelled Monitise's order book to £55m in the year. That contract win momentum has continued since, too, with the book having reached to £78m by the start of this month. Mr Lukies is expecting £14m of this to be recognised in the current financial year, with another £9m expected from other existing deals.
Meanwhile, with mobile banking becoming increasingly popular, Monitise's registered customer base has risen to 4.5m from 3.5m in December - accordingly, user generated revenues have more than doubled to £6.3m, from £2.9m previously. Sales from development and integration services have surged as well, to £6m from £1.4m, driven largely by new business wins. Encouragingly, the gross margin also held firm at above the group's 60 per cent target.
Evolution Securities expects a pre-tax loss of £10.2m in 2012, with a loss per share of 1.3p.
|ORD PRICE:||37p||MARKET VALUE:||£260m|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||5p*||NET CASH:||£23.6m**|
While profitability is still a fairly distant prospect, mobile banking remains in its early stages - suggesting plenty of long-term upside ahead for Monitise. So, even though the shares have more than doubled on our buy tip (18p, 18 July 2010), we reiterate that advice. Buy.
Last IC view: Buy, 25p, 14 February 2011