News Column

Monitise Slides As It Warns Of Wider-Than-Expected Loss

July 8, 2014

Steve McGrath

LONDON (Alliance News) - Mobile banking and payments company Monitise PLC lost a fifth of its value Tuesday after warning that its shift to a subscription model meant revenue in its last financial year had come in below expectations and its loss for the year will be wider than the market expected.

In a trading statement, the company said its revenue in the year to end-June grew between 31% and 33%, below the 40% growth expected, due to a faster shift to its subscription model and the lower up-front revenue that entails.

The company said it expects revenue growth of at least 25% in the current financial year, but it retaining its longer-term guidance, including its expectation that it will achieve profitability in fiscal 2016.

The stock was down 19% at 39.875 pence early Tuesday, the biggest decline on the AIM All-Share index.

It said its loss before interest, tax, depreciation and amortisation will be between GBP32 million and GBP36 million, wider than a market consensus on Bloomberg for an Ebitda loss of GBP28 million. Revenue is expected to be between GBP95 million and GBP97 million.

"There were a small number of larger contracts that either have been or are being negotiated on a longer term subscription basis. They were previously expected to be signed before the year end with a large up-front licence component. Had this occurred, Monitise would have exceeded guidance revenue for the year. However, Monitise took the decision to favour longer-term subscription revenue over shorter-term licence income with sub-optimal subsequent revenue," it said in a statement.

Still, the company's metrics continues to improve.

The company said it has 30 million registered end-users on its Bank, Pay and Buy platforms in June, up from 28 million in February. Live transactions through its platforms hit 4 billion in June an an annualised basis, up from 2.4 billion a year earlier. Payments and transfers initiated via Monitise technology is now worth USD88 billion on an annualised basis, compared with USD40 billion a year ago, it said.

Monitise will put out its fiscal 2014 results on September 15.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters