Growth is the name of the game for Monitise (MONI). The mobile banking and payments specialist recorded yet another loss, but compensated with gains in other areas. It broadened its subscriber base by 40 per cent year-on-year, to 28m, and more than doubled the value of payments and transfers it processed to $71bn on an annualised basis.
Monitise also converted its user and activity growth into cash, with subscription and transaction revenues up 14 per cent year-on-year. That should rise further, as deals with carrier Telefonica, credit-card giant Visa and computing guru IBM take off. The downside is that Monitise's operating expenses rose by a quarter year-on-year. Still, its prodigious levels of investment should pay off in an industry with strong network effects - that is, where every additional user makes the system ever more valuable.
Profitability isn't a priority yet; Monitise guided towards margins of above 70 per cent and revenue growth of around 50 per cent this year, with losses expected to continue. Broker Canaccord Genuity expects the company to make its first pre-tax profit of £20.4m in 2015, giving EPS of 1.1p. "We're still very much in the growth phase," says chief financial officer Brad Petzer.
| MONITISE (MONI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 68p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 67-68p | 12-MONTH HIGH: | 83p | LOW: 32p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 14p* | NET CASH: | £66.2m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012† | 27.8 | -29.7 | -2.6 | nil |
| 2013 | 46.5 | -23.3 | -1.4 | nil |
| % change | +67 | -22 | -46 | - |
| Ex-div: na | ||||
| Payment: na | ||||
*Includes intangible assets of £218m, or 13p a share | ||||
