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£31m green light for Monitise

TIP UPDATE: Credit card giant Visa give a great endorsement to the fast-growing mobile banking specialist
July 14, 2010

Now: Monitise has gone to shareholders with a £31m cash call just days after we flagged that likelihood in our buy tip just a week ago.

IC TIP: Buy at 23p

US credit card giant Visa is ploughing £6.6m in itself, taking its stake from 12.6 to 14.4 per cent. With a new market value of around £145m, Monitise should have the cash to see it through to breakeven. The company made £6m of revenue in the year to 30 June 2010, of which £4.3m was in the second half, demonstrating its rapid rate of growth.

The cash call and backing from Visa is a ringing endorsement of Monitise. Start-up costs in Asia-Pacific will likely anchor the soon-to-be cash generative UK and US operations in the short term, but rapid transaction revenue growth is starting to show the commercial potential of mobile banking.

What we said:

When: 9/07/10

Price: 20p

Performance to date: +15%

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