RE: There you Go!14 Jul 2020 09:27
A short extract from the Finn Cap broker note......
A very good six months for Bango
This is a very positive update. Although these are early numbers, H1 has been impressive.
EUS grew nearly 60% YoY, doubtless boosted by lockdown spending on mobiles.
Interestingly, the ongoing combined Bango Payment & Marketplace revenue virtually matched
the >50% growth in spend on the platform, interrupting the natural long-term decline in the
revenue conversion rate as volumes grow. The blurring of the payment processing and data
sales business revenues is increasingly making this ratio less useful. Moreover, as revenue
grows on a flat platform costs, the payments business becomes more profitable. It continues to
fund the early-stage data business, but there is now a substantive profit at the bottom line and
seen in the cashflow. We are very impressed and have confidence in H2 so make no changes
to our current forecasts ahead of the Interim results in September.
EUS continues to grow
The COVID-19 global lockdown forced people online to mobile usage and transactions; for
games, music and video streaming services, physical good and groceries in Japan.
Assisted by additional DCB spend during lockdown EUS on the platform jumped almost
60% YoY in H1 to £740m.
Bango is confident of an even stronger rise in the second half, targeting over £1,260m in
H2 to reach £2bn in the FY. There is traditionally more EUS in H2 with the Black Friday,
Cyber Monday, Amazon Prime Day sales and Christmas shopping.
?Although the lockdown has eased, the step up in H2 EUS (doubling YoY) is expected
to come from a full half benefiting from the major customer wins and route activations
seen in H1. The biggest uplift in EUS is expected to come from enabling DCB
transactions on Amazon.co.jp for Softbank subscribers (the delay of Prime Day from
July to October is a huge benefit with the additional time allowing more customers to
have discovered and signed-up for DCB).
?Another boost to H2 EUS will come from the use of the platform by the major global
telco; a £1.5m multi-year agreement for use of the platform for bundling third-party
products and services with a household name in the UK with millions of subscribers.
There is also the expansion of DCB services on Google Play store for new operators in
Asia, Latin America and Africa, as well as the DCB enablement for Hatch Gaming.
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