Bango Regulatory News (BGO)

14 March 2017

BANGO PLC

("Bango")

Final Results

Bango (AIM: BGO), the mobile payments company, today announces its Final Results for the year ended 31 December 2016.

FY2016 Financial performance

· Annualized End User Spend (EUS) exit rate grew to £195m/yr. 191% higher than FY2015 EUS exit rate due to growth from existing and acquired routes

· EUS for the full year increased 196% to £132.3m (FY2015: £44.7m) which includes 8 months of EUS from acquired routes in addition to growth from existing routes.

· Total revenue of £2.6m (FY2015: £1.3m).

· EUS revenue expressed as a percentage of EUS was 1.8% (1H2016: 1.67%; FY2015: 1.8%)

· £5.0m cost base excluding non-recurring costs in line with market expectations (FY2015: £4.4m)

· Adjusted LBITDA* improved to -£2.8m (FY2015: -£3.1m)

· Cash balance of £5.7m (FY2015: £12.1m) following acquisition of BilltoMobile Inc in May 2016.

*Adjusted LBITDA is the loss before interest, tax, depreciation, amortization and share based payment charge.

FY2016 Operational performance

· Bango market leadership: Confirmed with over 40% of available app store carrier billing routes in 2016 (Source: Progressive Equity Research estimates), driven by (1) new billing routes with Mobile Network Operators (MNOs), (2) new and extended partnerships, (3) acquisition, and (4) organic EUS growth on existing billing routes

· New billing routes: Activated more Direct Carrier Billing (DCB) routes for Google, Microsoft and Samsung, including the first Google Play carrier billing launch in India with Idea Cellular (180m subscribers)

· Partnerships: Extended partnership with Microsoft. New activations for Windows Store across all Windows 10 devices, including first carrier billing launch for Xbox content. Deployed new release of Bango API to key customers including PayPal

· Acquisition: Acquired and integrated leading US-based mobile payments provider BilltoMobile. Bango is now the only processor of carrier billing transactions across all four major US MNOs, representing more than 300m connected devices

· Existing billing routes: Further growth from existing active routes driving increased EUS. Bango Boost increased basic transaction rate by 20-40%

Outlook

· The activation pipeline for new routes is stronger than ever with 220 identified opportunities across various stores including Google, Microsoft and Samsung.

· 2017 is expected to include migrations of first generation integrations directly between stores and MNOs to the Bango Platform - including Google Play activations.

· Bango expects to deliver at least a 100% increase in EUS rate by the end of FY2017.

Ray Anderson, Chief Executive Officer of Bango, commented:

"End User Spend (EUS) grew ahead of expectations in 2016 due to a combination of growth from existing routes plus new business coming with the acquisition of BilltoMobile. The ability of the Bango Platform to efficiently process this extra volume and deliver organic EUS growth, supported by unique products like Bango Boost and Bango Dashboard, demonstrates the power of the platform.

The strength of Bango on Android and other web platforms is cementing its key position in the largest and fastest growing parts of the market, with DCB becoming an increasingly popular method of payment for the growing range of services sold to mobile users over the internet.

As the demand for new forms of content continues, Bango has seen EUS growth in the first quarter in line with expectations, and is confident of doubling EUS in 2017.

The Bango Platform can now handle at least $2 billion of transactions per year without additional cost, proving that the Bango Platform can handle EUS levels that will see Bango become profitable. Bango continues to perform load testing to ensure that it can comfortably meet the expectations of the leading stores connected to Bango."

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About Bango

Bango is the standard platform chosen by leading global stores to deliver mobile payments to everyone. As the next billion consumers adopt their first smartphone and look for universal payment methods, Bango will be there to unlock the world of apps, video, music, games and other content that brings those smartphones to life. Global stores plugging into the Bango Platform include Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG), Samsung (005930: Korea SE) and Microsoft (NASDAQ: MSFT). Bango also partners with leading payment providers around the world to drive new users and revenues through its industry-leading mobile payment solutions. For more information, visit www.bango.com.  

Chairman's statement

2016 was an impressive year for Bango. The technology developed and deployed by Bango in previous years comfortably processed a near tripling of End User Spend (EUS) with no additional operating costs, demonstrating the operational scalability of the business.

Bango technology continues to deliver organic growth, both by efficiently adding new billing routes and using a powerful data analysis capability, Bango Boost, to improve the yield of live routes on the platform. The additional jump in EUS resulting from the acquisition of BilltoMobile was handled seamlessly, a testament to both the technology and the team.

The continuing success of Android in the market supports the Bango strategy to power the leaders. In 2016, four out of every five smartphones sold were Android devices. The app stores delivered record breaking revenue to developers, with many of the most successful titles, such as Pokémon Go, making news headlines across the world. Bango benefits directly from these global trends, and from each wave of apps, content and services that are marketed and delivered through the app stores.

I was struck by two findings Bango published last year from its analysis of consumer behavior. First, a ground-breaking piece of research conducted by Bango in partnership with Proximus, the main Mobile Network Operator (MNO) in Belgium, proving that consumers who select carrier billing to pay in the Google Play store increase the amount of money they spend overall using their mobile phone accounts. This analysis is necessary to assure MNOs that consumers do not reduce spending on network services to fund apps, games, movies and music. They simply increase the amounts they spend.

The second piece of analysis looked at what happened when last year's mobile blockbuster, Pokémon Go, was launched. The research showed that a new title, and new product genre, attracted many first time users to carrier billing, and did not simply redirect spending from existing titles. This was incremental spending.

Bango builds competitive differentiation and value through technology, focusing its R&D effort on anticipating the needs of the market and on preparing for the needs of its key partners. In 2017 some of this investment will become visible in a number of new and exciting applications of the Bango Platform that leverage its power and capabilities, enabling our partners to expand mobile payments into new products and services. The interest in Bango technology is growing beyond its major app store partners and payment providers out to the major app developers, who are increasingly excited about directly accessing the sophisticated payments information that has successfully boosted the performance of MNOs.

I am impressed by the management team's long-term thinking, which has enabled Bango to deliver 2016's eye-catching growth on a stable cost based through a technology-led strategy. Rachel Elias-Jones was promoted to Chief Financial Officer, bringing a deep understanding of Bango technology gained from her four years at Bango to ensure the Bango Platform can handle scale and complex requirements.

Rachel replaced Gerry Tucker as CFO and on the Bango Board. Rudy Burger retired from the Board after nearly 7 years to be replaced by Gianluca D'Agostino. Gianluca brings a vast amount of industry experience gained from his career at Telecom Italia Mobile, KPMG and a range of mobile technology companies including Neomobile.

Bango enters 2017 in a very strong position, enjoying significant growth in End User Spend, closing-in on profitability and with a healthy cash balance. Bango has the most important pieces in place, powering the leaders with the unique Bango Platform and an excellent team. It executed exceptionally well in 2016 and this year has the opportunity to break new ground and set new records with the business.

David Sear

Chairman

CEO's statement

During 2016 the Bango Platform built substantial momentum - demonstrated by high growth in End User Spend from established routes, and by the increasing adoption of the Bango Platform by the giants of the internet industry.

As more customers and partners adopt the Bango Platform and as more transactions are analyzed by Bango technology, the platform becomes increasingly powerful, providing unique insights that drive revenue growth. This in turn drives more customers to use the Bango Platform which feeds a virtuous circle of success for the Bango Platform and the industry.

Alternative payment methods such as Direct Carrier Billing (DCB) are vital to fill the payment gap caused by the rate of smartphone growth hugely exceeding the availability of credit cards. The Bango Platform approach is increasingly being recognized by partners and customers as providing valuable insights and analysis that cannot be achieved without Bango.

Growth across all markets

During 2016 Bango showed growth from both developed markets, where card payments are well established, and also from emerging markets where DCB is the only widely available method of payment. In both cases the deployment of DCB improves sales.

Bango made key hires in Latin America, Asia and North America to ensure increasing collaboration with its global partners and local customers. The Bango presence on the US West Coast was also strengthened by the acquisition in May 2016 of leading US carrier billing business BilltoMobile. This brought billing relationships to Bango representing more than 300 million connected devices across the USA and new partners which have been migrated to the Bango Platform.

To support the ambitions of Bango customers in Japan and Korea, the most valuable DCB markets in the world, Bango made a senior hire in Tokyo to head up Bango KK, its subsidiary in Japan, and also established a strategic partnership with Danal Inc, which leads the DCB market in South Korea.

Technology focus and R&D expansion

The strategy of building a powerful platform that is used by a range of customers across multiple payment routes, rather than simply acting as a payment integrator or merchant aggregator, is starting to demonstrate its benefits.

Platform effect

The Bango Platform extends far beyond the reliable and secure processing of payment transactions. The information gathered through interactions with users that pay, and also those that are unable to pay, creates a unique and valuable pool of data. The data can then be used to improve user experience for all merchants, it also delivers deep insights and behavioral data that can be used to increase revenues and drive improved marketing yields. With the broadest view across the market, the Bango Platform has knowledge and data that no one else has, and can enable this to be used - in compliance with privacy rules - through the tools and APIs presented by the Bango Platform. Everyone integrated with the Bango Platform ecosystem benefits from the platform effect, supporting and driving market growth.

· Payment providers gain insight into user behavior to increase successful transactions and drive user engagement

· Stores and developers can model campaign performance to focus their massive advertising spend to gain the highest ROI, driving higher user spending

· Stores gain an increased reach through the platform's universal payment capability to reach the biggest available market

The more payment providers who integrate with the Bango Platform, the greater the benefits for every partner.

Bango Boost

MEFFY award-winning Bango Boost technology provides insights and recommendations to payment providers to grow their revenues. This has given payment providers that integrate with the Bango Platform an important competitive advantage.

Bango Boost v2 adds enhanced comparative analysis, peer benchmarking, cohort behavior predictions and other modelling techniques deployed in v1. This enables marketers focused on revenue growth and customer delight to distinguish active customers from inactive customers, generate transaction forecasts for customers and determine future best customers.

Bango Boost has enabled MNOs to find new and effective ways to encourage users to make their first purchase with DCB, and then to tailor their marketing to grow spending and achieve increased return on marketing investment by targeting the highest spending consumers.

Migrations to the Bango Platform

In expectation of a number of migrations to the Bango Platform from traditional direct integrations between app stores and MNOs during the next year and beyond, Bango has developed tools and technologies to streamline the upgrade. The post-acquisition migration of live routes from the legacy BilltoMobile systems to the Bango Platform has been a proving ground for these capabilities.

Bango has also developed Jarvis - an internal suite of tools, modules, simulators and systems to streamline the integration of new payment routes. Negotiations between MNOs and app stores are normally the key factor influencing activation timing. Bango ensures that the technical work is fast, flexible and error free by using Jarvis to configure the Bango Platform to external payment systems, and minimize the need for any technical integration work. With hundreds of potential payment providers needing Bango Platform integration in the coming years, the development teams at Bango can be focused on expanding platform capabilities and not on initial integrations or migrations.

Developed new API with additional functionality

One of the most substantial technological achievements of Bango is the creation of a stable API which presents the power of the Bango Platform, and all the payment routes it is integrated with, to the app stores and merchants. During 2015 and 2016 the API was given a major upgrade - culminating in the release of Bango API v5.

Bango API v5 uses a unique and innovative approach to ensure that payment route diversity can be handled within the Bango Platform, and without the merchants and app stores having to change their code for different payment methods or user experiences. Bango API v5 also incorporates new capabilities that facilitate the sale of physical goods such as partial shipment, partial refunds, item by item tax variation and diverse chargeback models.

Platform capacity

Bango systems are regularly load tested to verify that they can comfortably process well in excess of the transaction volumes envisaged for the coming year. During 2016 a number of changes were made in the underlying systems to streamline some of the critical processes, and to move away from SQL-based technology in areas that could become constraints as Bango scales to more than 10 times current transaction levels.

Load testing at the end of 2016 and during February 2017 provided comfort that these changes now support at least $2Bn/£1.6Bn EUS per year using the current datacenters, hardware and software. During 2017, Bango is therefore in an excellent position to handle eight times current EUS reliably, safely and securely with little or no incremental operating cost.

As EUS levels climb into the billions of dollars, the datacenters will require additional computing power and storage, but these are provided by the addition of commodity hardware at very low cost, so the gross margin generated on transactional revenues should stay well over 90%.

Three factors affecting revenue growth

Users increase their spending on digital entertainment and services

Growth of revenues from the existing user base is driven by the continued appeal of app store content, continued marketing and promotion by app stores and app developers, and the acceleration in EUS that is delivered through the effective use of Bango Boost.

Fast growth in new users

Only a small percentage of customers have used DCB so far. Even in established DCB markets, less than 10% of users have made their first purchase, and in early stage markets this may be less than 0.1%. Promotions by local MNOs, the app stores and the app developers themselves encourage users to buy something using DCB. There is huge growth potential from the addition of first time users.

New forms of content and services

The availability of more content is driving increasing EUS on the Bango Platform. Such new types of service include YouTube Red - a newly launched ad-free YouTube service; Pokémon GO, an alternate reality game which quickly became a top selling app, and the opportunity introduced by Microsoft to allow DCB for Xbox games and services.

Partner developments

A key business success factor is the relationship Bango has with its strategic partners, who are mostly the world's leading stores. In 2016 Bango both strengthened some of its existing relationships as well as developed new exciting opportunities.

Expanded key strategic partnerships

In 2016 Bango expanded its agreement with Microsoft to allow DCB to be used as a payment method across all Microsoft Windows 10 devices including smartphone, tablet, desktop and Xbox One. New services were launched in Sweden, Finland, Norway and Hungary.

Bango has also continued to develop its relationships with the other major stores that choose to use the Bango Platform, and the first fruits of these activities will become more apparent in 2017.

Developed new partnerships

BilltoMobile powered DCB for several large businesses, such as PayPal in the USA. Bango is migrating these customers to the Bango Platform to provide improved reach and capabilities and expects these new relationships to blossom during 2017.

Bango signed a memorandum of understanding with Korean mobile commerce company Danal Co., Ltd (064260.KQ) aimed at strengthening its global payments footprint and for mutual technical and business benefit. 

Growing within the DCB market

The Bango Platform is the leader in DCB and is used by almost all the major app stores.

The primary competition for DCB remains the option for payment providers to implement a traditional integration with each app store directly rather than leveraging an independent platform.

As Bango has started to prove, revenues grow faster using the Bango Platform, and as app stores have started to mandate the Bango Platform to avoid the burden and shortcomings of a direct connection, the competitive position of Bango has strengthened.

Management now believes that during 2016 leadership has been established in Bango winning over direct integrations, and that this will further drive the power of the platform approach going forward, leading to more wins and many more migrations.

Outlook

Bango remains focused on growing EUS, both in markets where it already operates and in new markets that it can enter through integrating with new payment providers, offering new forms of digital content and by activating stores for the first time. The activation pipeline for new routes has 220 opportunities across all stores connected to Bango. Bango also expects to see migrations in 2017 of integrations that were previously direct between stores and MNOs to the Bango Platform which typically adds more EUS in the first year then a completely new integration, as the customer base have already adopted DCB.

Each new billing route is revenue and gross profit enhancing for Bango due to the high operational scalability of the business model. Therefore, with continued EUS growth and corresponding growth in revenues at low and steady costs of transaction processing, Bango is on track for a move to profitability within current cash resources. Revenue from End User Spend in FY2016 at £2.4m exceeded the costs of operating the Bango Platform. While Bango is now at operational break-even, we continue to invest in sales, marketing and product development to expand the use of Bango technology by our leading customers and continue to grow our market share. This ongoing investment supports our goals of becoming EBITDA positive in the near future and continuing our leadership position.

Bango will continue to invest in developing technologies that enhance the power and value of the Bango Platform.

Ray Anderson

Chief Executive Officer

CFO Statement

End User Spend

Bango achieved 196% growth in End User Spend (EUS) to £132.2m, up from £44.7m. Bango also drove a 191% growth in the December 2016 EUS exit run rate compared to December 2015. The December 2016 exit run rate was £195m. This growth in EUS was driven by organic growth across the existing routes from prior years and new routes added in the year, including major activations with US MNOs following the BilltoMobile acquisition.

Bango is confident that it will sustain further rapid growth in EUS in FY2017 and this growth will be achieved from existing and new activations scheduled for launch in the year. As announced in the FY2016 interim results, unique Bango technology such as Bango Boost helped generate additional growth of EUS on activated routes by between 20%-40%.

EUS is the total of sales processed through the Bango Platform excluding sales taxes. EUS shows the growth of business through the Bango Platform. EUS is the most significant Key Performance Indicator that management uses to measure the development of the business and the success of Bango partners.

Revenue

Bango has changed its accounting policy and updated its reporting model since publishing the FY2015 accounts. Previously Bango reported turnover, which was calculated as a mixture of agency and principal models:

· Principal model - where Bango is the merchant of record, buying and reselling the content to end users. 100% of EUS is recorded as turnover

· Agency model - where Bango is not the merchant of record. Only the Bango transaction fee is recorded as turnover

The proportion of business that is principal model is now immaterial in comparison to the agency model business. Therefore, Bango now reports on revenue which is the fee from every transaction through the platform, regardless of commercial model.

The prior year figures are reported to aid comparison of the current year's performance.

The revenue model for platform fees has not changed. It relates to all revenue not generated from EUS, such as one off integration fees or monthly recurring revenues related to additional services such as support. Revenue related to specific projects is recognized when certain contractual milestones are reached. Most platform fee revenue relates to payments for integration to the Bango Platform.

The revenue from EUS grew by more than 150% to £2.41m in FY2016 compared to £0.84m in FY2015 due to the significant growth of EUS between the two periods.

Revenue expressed as a percentage of EUS

Revenue expressed as a percentage of EUS was 1.8% (FY2015: 1.8%) and is consistent with management's short-term expectations for this metric.

Bango has a range of contractual models and pricing that link to total EUS in different markets and with different stores. Fees generally reduce with higher EUS due to a tiered pricing model, so revenue expressed as a percent of EUS will typically be lower. Higher fees may result when services such as Bango Boost or analytical support are provided.

Acquisition of BilltoMobile Inc.

On 6 May 2016 Bango purchased BilltoMobile Inc from Danal Inc for $3m and $0.4m of Bango shares. The cash consideration for the acquisition in sterling was £2.15m which was paid just before the UK voted to leave the EU (Brexit) and the subsequent depreciation in sterling. The total number of shares issued to Danal Inc was 586,095, equivalent to £0.34m shares. The acquisition has resulted in £0.4m of non-recurring costs linked to direct costs relating to the transaction and subsequent fees paid to Danal Inc for the hosting of the service until it is fully migrated to the Bango Platform.

Administrative expenses

Administrative expenses were in line with the budget and expectations for FY2016 at £5.1m compared to £4.4m in FY2015. This reflects planned spending internally to increase the Bango sales and business development presence to capitalize on the momentum of commercial activity with leading customers. Bango also continues to invest in its development team to enhance the Bango Platform.

Amortization of intangible assets in the year was £1.1m (FY2015: £1.0m) as further R&D projects capitalized in prior years were deployed. Amortization of the BilltoMobile Inc investment was £0.2m. Depreciation for the year totaled £0.3m (FY2015: £0.5m) reflecting the small number of fixed asset additions in the year, and that much on the equipment is now fully depreciated.

Share based payment costs of £0.4m in FY2016 (FY2015: £0.4m), are part of the compensation package that Bango uses to attract, motivate and retain employees in a competitive market, all employees other than Non-executive Directors are eligible to take part in the Bango share option scheme.

Balance sheet

Net assets of Bango were £12.3m at 31 December 2016 (at 31 December 2015: £15.9m).

Cash balance decreased to £5.7m at 31 December 2016 (at 31 December 2015: £12.1m), this was driven by the purchase of BilltoMobile Inc in the year for £2.2m and cash used by operating activities £2.6m (FY2015: £3.2m). With a stable cost base, and a future of growing revenues at a high gross margin, Bango will move closer to cash generation in FY2017. The Board believe Bango has sufficient funds in place to take the Group through to profitability and cash generation.

Intangible assets which includes acquired assets and goodwill as well as internally developed capitalized R&D in FY2016. Intangible assets relating to capitalized R&D remained consistent at £3.6m (at 31 December 2015: £3.4m) as a result of on-going internal development work being capitalized, compensating for the amortization charges in the year. There was £1.2m trade and assets relating to BilltoMobile Inc and £1.2m of goodwill at the year end.

Total borrowings are £0.1m (at 31 December 2015: £0.4m) and consist of finance lease liabilities, most of which are current liabilities for the next year.

Cash consumption

As Bango continues to grow its EUS and revenue in 2017 it expects to see cash consumption decrease as the revenue is expected to grow and costs are planned to be stable. With cash at the year-end of £5.7m there is sufficient cash in place to see the business through to cash breakeven in the near term and profitability in the medium term.

Rachel Elias-Jones

CFO

Audited results for the year ending 31 December 2016

Consolidated statement of comprehensive income

Alternative performance measure (Non-IFRS)

Loss per share attributable to the equity holders of the parent

All of the activities of the Group are classed as continuing.

Consolidated balance sheet

Consolidated cash flow statement

Consolidated statement of changes in equity

Notes to the financial statements

1 General information

Bango PLC ("the Company") was incorporated on 8 March 2005 in the United Kingdom. Bango is domiciled in the United Kingdom. Bango's shares are listed on the Alternative Investment Market of the London Stock Exchange ("AIM").

The preliminary statements are for the year ended 31 December 2016 (including the comparatives for the year ended 31 December 2015).

2 Basis of preparation

The consolidated financial statements have been prepared under the historical cost convention and under the basis of going concern.

Bango has prepared its Report and accounts for the year ended 31 December 2016, in accordance with International Financial Reporting Standards ("IFRS") as adopted in the European Union and as applied in accordance with the provisions of the Companies Act 2006. IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

These preliminary statements are presented in pounds sterling (GBP) because that is the presentation currency of Bango.

The Board of Bango PLC approved the release of this preliminary announcement on 14 March 2017.

The preliminary financial information does not constitute statutory financial statements for the year ended 31 December 2016 within the meaning of section 435 of the Companies Act 2006, but is extracted from those financial statements. Statutory accounts for Bango PLC for the year ended 31 December 2015 have been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2016 will be delivered to the Registrar of Companies following Bango's Annual General Meeting.

The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.

3 Segment reporting

(a) End User Spend

As a non IFRS alternative performance measure, Bango has identified EUS as its key performance indicator on which all management decisions surrounding investment in the platform and development of intangible assets are based. Key business decisions are based on the total value and volume of transactions that Bango has processed in each month through its payment platform. Therefore, to give additional information to key stakeholders of our accounts and to assist users of our financial statements, we include this additional reporting.

(b) Revenue and gross profit

Bango, based on the information reviewed by the chief operating decision maker, identifies two operating segments. Management reporting is based principally on the type of customer and strategic decisions are made on the basis of the gross profit generated from each segment. The segments are not separately managed and therefore Bango's headquarters and its research and development activity are considered group operations and are not allocated to any operating segment. Segment information can be analyzed as follows for the reporting periods under review.

12 months to 31 December 2016

Bango has two revenue streams, which it reports separately. Firstly, revenue from transaction fees due to EUS, secondly, revenue from other fees paid by stores for new payment integrations and other services.

Change in accounting policy

Bango now reports on the Bango margin from transactions as revenue, instead of reporting a turnover figure which reflects the different commercial models. Turnover used to reflect 100% of a transaction where Bango was principal, and the Bango margin only for agency contracts. The proportion of the Bango business that is principal is now immaterial in comparison to the agency business. Reporting no longer reflects the different commercial agreements with the stores, simplifying the relationship between EUS, revenue and gross profit. The prior year revenue figures are reported to aid comparison of the current year's performance. As a result, the FY2015 figures have been restated using the new presentation. Revenue in for FY2015 is now £0.89m, compared to £3.19m of turnover. The difference is the principal business that was accounted for gross is now shown net. If this change in accounting policy had not been made, then turnover would have been £3,317,354 instead of £2,624,187. The costs of sales relating to digital merchants or payment providers would have been £700,221 but the segment gross profit would have been the same at £2,617,133.

12 months to 31 December 2015 (restated)

12 months to 31 December 2015

End user activity is the fees paid by end users for purchasing content. Gross profit for this segment is after both digital merchant and payment provider charges. Assets for this segment are amounts due from payment providers. Liabilities for this segment are mainly fees payable to payment providers for provision of services and fees payable to digital merchants for provision of content sold by Bango to end users.

Other fees are the amounts paid to Bango by digital merchants and others for package fees and other services including operator connections. Assets for this segment are amounts due for service fees and other integration fees. Liabilities for this segment represent deferred income for longer term services. Group assets include non-current assets and cash and cash equivalents. Group liabilities relate to administrative expenses.

Non-current assets are all based in the UK.

(c) Geographical analysis

Bango's revenue from external customers is divided into the following geographical areas.

Segment revenue is based on the location of the partners, of which in other fees £0.12m (31 December 2015: £0.22m USA and Canada) came from a strategic partner based in the UAE. All turnover from end users is spread over many territories, of which £1m comes from a partner in the USA and £0.3m from a partner in Australia (2015: £0.2m Australia).

All of the other notes to the accounts are included in the "Annual Report 2016" which is available to download from bangoinvestor.com