Monitise's (MONI) first-half cash losses tripled to about £31m, yet its share price surged on the back of its interim figures. That may reflect investors' relief at the lack of surprises. After all, the mobile banking group's shift from a licensing-based model, last month's profit warning and the potential sale of the company conspired to send its shares down two-thirds in the past year.
First-half coups included a multi-country digital banking agreement and a seven-year partnership with Virgin Money. Monitise also brought forward the launch of its IBM-built Monitise Central Platform to April. And strong user growth drove a near-50 per cent rise in the annualised value of payments and transfers initiated using Monitise's technology to $101bn (£65.8bn).
Monitise's financial gains were mixed: development and integration sales rose 14 per cent to about £22m, but divisional gross margin narrowed sharply to 27 per cent. That reflected higher-than-expected costs tied to large, complex projects such as Yaap, the group's joint venture with Santander, Telefónica and Caixabank. Moreover, increased headcount following its acquisitions of Grapple, Pozitron and Markco Media meant operating costs were up by a quarter.
Monitise expects to turn a cash profit next year and deliver a cash-profit margin of 30 per cent in 2018. Broker UBS forecasts a full-year loss per share of 3.7p, narrowing to 2p in 2016.
| MONITISE (MONI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 24p | MARKET VALUE: | £518m | |
| TOUCH: | 24-25p | 12-MONTH HIGH: | 81p | LOW: 13p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 19p* | NET CASH: | £128m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 46.5 | -23.3 | -1.4 | nil |
| 2014 | 42.4 | -58.4 | -2.8 | nil |
| % change | -9 | - | - | - |
*Includes intangible assets of £306m, or 14p a share | ||||
