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The purpose of the trading update is to allay unnecessary concerns. The mid year trading update did this in that the EUS had increased significantly. The January 2018 one did not in that the EUS rate could be only a little more than it was at the end of August. The share price assumes high levels of growth for the next two or three years. No doubt we will receive more precise and useful information shortly. Personally I do not think there is anything to worry about. The recent India Bango and Amazon deal is interesting and is probably part of a plan for Amazon to penetrate the Indian market. The Indian Government regulations severely restrict the use of DCB in India. Earlier in 2017 Amazon applied for and received approval for a digital wallet in India. I would expect that soon Bango will handle the payment processing which will result in the cost of for goods sold to be charged to Amazon's digital wallet. http://bigdata-madesimple.com/digital-wallet-game-amazon-enters-the-digital-payment-market-in-india/
The purpose of the trading update is to allay unnecessary concerns. The mid year trading update did this in that the EUS had increased significantly. The January 2018 one did not in that the EUS rate could be only a little more than it was at the end of August. The share price assumes high levels of growth for the next two or three years. No doubt we will receive more precise and useful information shortly. Personally I do not think there is anything to worry about. The recent India Bango and Amazon deal is interesting and is probably part of a plan for Amazon to penetrate the Indian market. The Indian Government regulations severely restrict the use of DCB in India. Earlier in 2017 Amazon applied for and received approval for a digital wallet in India. I would expect that soon Bango will handle the payment processing which will result in the cost of for goods sold to be charged to Amazon's digital wallet. http://bigdata-madesimple.com/digital-wallet-game-amazon-enters-the-digital-payment-market-in-india/
The following is an extract from last year's trading update note no greater thans and the revenues and costs are included : End User Spend Bango is focussed on increasing End User Spend (EUS) through the Bango Payment Platform, to capitalize on the rapidly expanding global market for digital content and services. The exit EUS at the end of 2016 was �195m/yr compared with �67m/yr at the end of 2015, a growth of 191% year-on-year. Total EUS for 2016 was �132m compared to �45m for 2015. Revenue Revenue for FY2016 was �2.6m compared to �1.3m for FY2015. FY2016 EUS revenue was �2.4m, (FY2015 �0.84m), which is 1.8% of EUS. Revenue from platform fees was �0.2m (FY2015 �0.5m). Operating expenses Costs for FY2016 were in line with expectations at around �5m plus the costs from non-recurring activities relating to the purchase and transition of BilltoMobile Inc of �0.3m as expected. Balance sheet Bango purchased BilltoMobile Inc for �2.15m in cash and �0.35m in shares in May 2016. The Bango cash balance at 31 December 2016 was �5.6m (31 December 2015: �12.1m). Processing capacity In FY2015 the Bango Payment Platform capacity was tested to a $1Bn/yr transaction rate. Development work in FY2016 has raised the capacity to a level in excess of $2Bn/y
It is normal in the States for the Directors selling a company to face lawsuits which are normally without merit. It happened to Rocket Fuel.
Bango was funded to a large extent by the placement of shares with fund managers. This resulted in high percentages of the shares being held by a few fund managers. Odey Asset Management acquired more than 10 percent of the company. Bango�s shares are thinly traded and it is not possible to buy or sell shares in volume in the open market without the share price moving significantly. His funds have not performed well in recent times. https://www.fnlondon.com/articles/odey-managers-move-to-reassure-clients-as-losses-mount-20171204 Odey�s style is contrarian and he makes quite large investments in comparatively high risk shares. On 8th January there was an RNS indicating he had sold 684 thousand Bango shares. When the total daily volume is of the order of 200 thousand shares, the sale of 1% of the company has an impact on the share price. Perhaps Bango no longer carries sufficient risk for his management style. He has been investing in Tri-star http://www.morningstar.co.uk/uk/news/AN_1515778622556940400/odey-asset-management-further-increases-stake-in-tri-star-resources-(alliss).aspx For me the recent Trading Update for Bango was good although it could have been less vague. Ray has hinted at the fact that EUS will double in the next year but he is unwilling to give a quantitative projection. Cenkos, the house broker, is not bound in the same way and according to Simon Thomson their expectation is for EUS to double to �913m by the end of 2018. Mobile network operators can choose which companies they work with for DCB. Today�s RNS sends a clear message that if the MNO wants to enable trade with Amazon they should be choosing Bango. Similarly the 9-Pay deal sends the message that with Bango it is possible to interface with Mobile Wallets rather than the phone bill. I expect Odey to continue to reduce its Holding in Bango so the share price could remain week for a while longer.
I am surprised no one has mentioned the Tip Update in the Investors Chronicle yesterday which was to Buy. For me the main issue is that there is no sign of Bango going ex-growth and the projection is for EUS to double in 2018 and again in 2019.
People seem to be getting hung up on End User Spend or rather the annualised rate of EUS. First of all it is worth pointing out that the annualised rate of EUS in a very crude figure calculated by taking EUS over one week and assuming this applies over one year. The immediate problem is there is no such thing as a week in December that is representative of the rest of the year. The solution is to give a conservative floor figure and say the annualised EUS is greater than say �400million. If a week in December were taken and used to calculate the annualised EUS the result would be either ridiculously high or ridiculously low. There is another angle on EUS which is to determine the level of EUS that is required to enable BANGO to reach profitability. The gross margins are reasonable constant as are the operating costs. I worked out that the EUS for November when Ray stated profitability had been reached had to be in the region of �500 million per year. Certainly a figure in excess of �400 million per year. With regard to the Netflix deal, it has been possible to subscribe to Netflix through Google Play or Itunes for some time. It seems that the deal with Bango will cut out the need to use these stores. Netflix has direct arrangements with several mobile operators and it seems as though they may be migrating these to include the Bango platform. Netflix has the email addresses of people with accounts so I would expect migration should be achieved quickly. I am reasonably positive about the results.
It is possible to specify when buying shares that the settlement will take place in 20 days time rather than the normal 3 days.. Suppose I have no money but a �50K credit limit for buying shares. Suppose I decide the Bango share price is likeley to rise. I can buy shares on credit as long as i settle the trade before the �50 K is due. I do this by selling the shares with a three day settlement period. The rise in share price less expenses is mine to keep. I can roll over one trade into the next and the costs of buying and selling are low because Aim shares are exempt from stamp duty.
Looking at the trades, I would guess people have been buying on extended settlement (say 20 days) As one trade is due it is settled and a new one replaces it.
Slowburner, the process is much the same for charging items to your digital wallet as for charging items to a mobile phone bill. The only difference is that when setting up the process you specify the wallet rather than the phone bill. Bango does not operate the wallet which is a limited form of bank account but performs the function of a debit debit card for the wallet. There are lots of government regulations applied to DCB and mobile wallets so in some countries e.g. India, DCB is very restricted but if the payment is directed to a wallet fewer restrictions apply. I suspect this is the route Bango will choose. MPESA is a digital wallet https://en.wikipedia.org/wiki/M-Pesa. It worked well in Kenya but in South Africa it failed because of the Government requirement that it had to be linked to a traditional bank account !
The costs in the consolidated figures include maintaining four separate boards of directors, four accounting organisations,duplication of marketing offices in the same cities four sets of auditing fees etc. The assumption being made is that R1 would do nothing about these duplicate costs. The hypothetical rough consolidated figures are there so that people can get an idea of the sort of duplication and savings that can be made in the future.
The IC article is written by Harriet Clarfelt and it refers to Bango a a direct carrier billing company. The Bango platform can handle other methods of payment. For example the recent implementation in Nigeria with 9Pay is not in itself that significant except it results in charges to a mobile wallet rather than the telephone bill. There are several mobile wallet systems and potentially this is a huge new source of revenue for Bango.
Stt1, I would not expect R1 or anyone else to issue a RNS for something that they are implementing which does not yet work. R1 is a seller and and appears on many ads.txt files which lists them as authorised sellers. For example http://www.marieclaire.com/ads.txt Radiumone is a buyer and is a gold standard signatory for the IAB. https://www.marketingweek.com/2017/10/18/google-facebook-commit-gold-standard-clean-digital-advertising/ This means they are committed to implement ads.txt. No doubt they will do so when it works. I do not understand why you make such a big issue of ads.txt which is a simple text file and trivial to implement. There seem to be people who speculate that you have some ulterior motive and other that you are not very bright.
Simon the answer is yes.
Five years ago Fortumo used SMS. They realised that to compete they needed ideally to be as good as Bango or better. The raised money with a view to replicating the way Bango works. To purchase now you click on buy and then enter your pin. No SMS is involved. Bango has not stood still and so there is no need to worry. I believe the business relationship with Danal is very important.
Fortumo is a major competitor and is strong in the emerging markets. https://techcrunch.com/2013/02/21/fortumo-raises-10m-from-intel-capital-greycroft-to-take-on-bango-and-more-in-carrier-billing-inks-deals-with-china-mobile-and-vodafone/
Simon, There are quite a few companies involved in DCB e.g https://fortumo.com/industries/app-stores/
Leftos, you are right to single out Ray Anderson as someone special. He has founded, developed and sold software companies, in particular Torch and IXI. In addition he has held a senior marketing positions in Santa Cruz Operations, a major tech company. A few years ago I went along to an AGM, I was the only shareholder present. My objective was to get a better understanding of what the company was doing with regard to enabling DCB for physical goods and to get to look at the management and Ray in particular. My understanding is that Ray retired early having made lots of money. He bought himself a plane and did charity work. Boys� toys and charity work do not provide the same challenge or satisfaction as building a business and I suspect he got bored. There was also talk in Cambridge in the 1990�s and 2000�s about the problem of companies being founded, floated and sold before they reached their full potential. I believe Ray set himself the challenge of founding a company that he would build into a major enterprise. I do not expect him to sell the company in the short term. He certainly does not need the money. If you study what he has done with Bango you will realise that many things are following a market driven strategy. The focus is on areas which will yield high growth and long term profitable business. If you read some reports you might get the impression that the Amazon deal in Japan just happened. It did not but was the result of contracts entered into in 2011. Bango Boost resulted from technology developed for Bango Analytics. Bango Analytics had to compete with analytics provided by Google and supplied at no charge. Commercially it was not a great success but the technology has been put to good use. So while you mention Ray�s technical and marketing expertise, what he has which is more important is vision and the ability to plan strategically. The management style within Bango is laid back and informal to the point where one might worry if one were not familiar with the software industry. About thirty years ago I met someone on an expensive cruise. He ran a software company in California and he told me that he encouraged his programmers to bring their dogs into work. Developing software was a lonely occupation and he considered this helped. Ray knows how to manage a software company having had lots of relevant experience.
Microsoft's App store is not closing down. Microsoft is discontinuing Groove which can not compete with such things as Spotify. You will be able to subscribe to Spotify's premium service through Microsoft's App store. Personally I believe Bango will double its sales each year for the next five years.