Bango Regulatory News (BGO)

20 Nov 2007 07:01

Bango PLC20 November 2007 20th November 2007 BANGO PLC ("Bango" or "the Company") Interim Results for 6 months ending 30th September 2007 Bango (AIM:BGO) is pleased to announce today results for the 6 months ending30th September 2007. Financial Highlights (H1 FY08) • Revenues up 49% to £6.84m (H1 FY07: £4.60m), up 17% vs. H2 FY07 • Content provider revenues up 50% to £1.05 m (H1 FY07: £0.70) up 25% vs. H2 FY07 • Operating loss (before share based payments) reduced 35% to £0.98m (H1 FY07: £1.5m) and reduced by 37% vs. H2 FY07 • Period end cash balance £1.82m (March 2007: £1.93m) • Opex reduced by 16% to £2.37m (H1 FY07 £2.83) through increasing partner and technology leverage Operational Highlights • 108 Premium Customer wins (H1 FY07: 80) including AnimationFC and MTV. • Successfully executing on strategy to target greater range of customers with over 1,200 Starter Package sign-ups (H1 FY07: 23). • Capitalising on the markets in the US and Canada, where end user spending is up by 253% against the same period last year and 47% vs. H2 FY07. • Development of the innovative "Bango Button" that enables the users of MySpace, Facebook, Flickr and other mobile communities to offer their images and other content for mobile phone download direct from their web pages. Commenting on the interim results Lindsay Bury, Chairman of Bango, said, "Bangohas had a much improved six months, achieving increased revenues whilesimultaneously reducing costs. Bango is in a leading position in the marketplace and the second half of the year has started well. Transaction growth ismoving in the right direction and the momentum should continue. The Company isreducing cash burn to below £100k (pcm) meaning that the transition to apositive cash flow position and profitability is progressing well." Contact Details: Bango plc ICIS Limited Panmure Gordon & CoTel. +44 1223 472777 Tel. +44 20 7651 8688 Tel. +44 20 7459 3600Ray Anderson, CEO Tom Moriarty Aubrey PowellPeter Saxton, CFO Caroline Evans-Jones Stuart Gledhill Introduction At the end of FY 2007 management committed to grow revenues and increasecustomer signup rates, while simultaneously reducing operating costs and cuttingcash consumption. Bango has successfully delivered against these targets. This has been made possible by improving the operational efficiency of thebusiness and leveraging what are essentially fixed service delivery costs. Theaverage cost of signing up a new customer has reduced during the period and iscontinuing to reduce as we increasingly develop sales through our web andpartner sales model. Concurrently the streamlining of our sales teams has seen asignificant increase in productivity. We believe that this trend will continue. Mobile operators are now beginning to realise the potential of the mobile web,and positive market sentiment is now in evidence, with significant recentdevelopments from Yahoo! and Google further adding to the momentum. As aleading facilitator of business over the mobile web Bango is ideally positionedto benefit from the direction the market is taking and we can look forward tothe future with confidence. Financial highlights Six months ended Change on Six months ended Year ended 30 September 2007 H1 FY07 30 September 2006 31 March 2007 Unaudited Unaudited Unaudited Audited £m £m £m £mRevenue 6.84 2.24 4.60 10.43Gross profit 1.40 0.08 1.32 2.47Operating loss before share (0.98) 0.52 (1.50) (3.06)option costsLoss before tax (1.08) 0.54 (1.62) (3.32)Cash outflow from (0.17) 1.39 (1.56) (2.82)operationsCash position 1.82 (1.38) 3.20 1.93Basic and fully diluted (4.02) 2.08 (6.10) (12.40)loss per share (pence) Revenue was £6.8m up from £4.6m for the same period in the previous year,representing growth of 49%. Content access fees (content sales through Bango)grew from £3.9m to £5.8m (49% growth) while content provider fees grew from£0.7m to £1.0m (50% growth). Payouts to larger content providers were increased at the end of 2006, enablingthem to become more successful. As expected, this slowed the margin increase inthe short term. However, we have seen the expected improvement in margins goingforward with the increased rate of sign-up of smaller content providers andanticipate this improvement continuing. In terms of geographical breakdown, growth in revenues outside the UK market was176% compared with H1 FY07 with the USA and Canada posting 187% growth and theEU posting 213%. Non-UK geographies now represent 28% of total revenues against15% at the end of H1 FY07. This demonstrates that the market conditions in otherterritories are beginning to enable sale of content over the mobile web, as theydid in the UK a few years ago. The UK was the biggest contributor of revenues,growing 26% from £3.9m to £4.9m. Sales and marketing Understanding of the mobile web opportunity has increased during the last yearas mobile operators have promoted it. Interest has been boosted by mobile webannouncements from Yahoo!, Google, Vodafone and Apple during the summer. We havetherefore been able to start shifting our marketing efforts from marketeducation to product sale. This enables increased salesperson productivity andplays to the strength of our products and technology. Though still small in absolute terms, the growth in direct sales from ourbango.com website has recently accelerated. Google's agreement to offer Bangocustomers a free "Adwords package" has enabled smaller customers to experimentwith mobile web advertising. Customer base Bango's customers range from the very small to the very large. Many of our mostsuccessful customers are those who focus on the emerging opportunities in mobilesearch. There has been a shift of emphasis towards the small and medium sizedcustomers where sales lead times are shorter, sales costs lower andrelationships less expensive to service. Product development The development team has had a very productive period, bringing a number of newproducts to market while at the same time evolving our existing products toadapt to market needs and changes within the mobile operators. Our emphasis ison developments that simplify and reduce the time taken for content providers toget up and running on the mobile web, and on reducing their costs through theuse of Bango technology and our unique industry position. This will enable usto acquire increasing numbers of customers at a lower cost. The Bango website continues to evolve to make it easier for customers to sign upto our services automatically. We have also placed emphasis on introducingsimpler and lower cost product offerings that are appealing to content ownerswith little or no mobile experience. For low usage levels, our basic productenables new entrants to sign up to the service without incurring a fixed monthlycost. The Bango Button Our newest development is the 'Bango Button', which was launched last week.Based on unique Bango technology developed over the last few years, it is anexciting new proposition which has the potential to significantly accelerate theuse of the mobile web. Any of more than 300 million users of Myspace, Facebook,Flickr or other communities can now simply add buttons to their pages that sharetheir pictures and other content direct to a viewer's mobile phone. Bangotechnology is now of immediate value beyond our initial market of those contentproviders that have the ability to build or commission websites. Outlook Bango has had a much improved six months, achieving increased revenues whilesimultaneously reducing costs. Bango is in a leading position in the marketplace and the second half of the year has started well. Transaction growth ismoving in the right direction and the momentum should continue. The Company isreducing cash burn to below £100k (pcm) meaning that the transition to apositive cash flow position and profitability is progressing well. ******** CONDENSED CONSOLIDATED INCOME STATEMENT FOR SIX MONTHS ENDED 30 SEPTEMBER 2007 Note Six months ended Six months ended Year ended 31 30 Sept 2007 30 Sept 2006 March 2007 Unaudited Unaudited Audited £ £ £ Revenue 6,835,766 4,602,826 10,428,312Cost of sales (5,438,338) (3,280,871) (7,962,403) Gross profit 1,397,428 1,321,955 2,465,909Administrative expenses (2,374,047) (2,823,402) (5,528,659)Share based payments (147,317) (212,575) (401,640) Operating loss (1,123,936) (1,714,022) (3,464,390)Investment income 42,811 89,372 147,284Finance costs - - - Loss before taxation (1,081,125) (1,624,650) (3,317,106)Income tax expense - - - Loss for the financial year (1,081,125) (1,624,650) (3,317,106) Attributable to equity holders of the Company (1,081,125) (1,624,650) (3,317,106) Loss per share attributableto the equity holders of the CompanyBasic loss per share 5 (4.02) (6.10) (12.40) Diluted loss per share 5 (4.02) (6.10) (12.40) All of the activities of the group are classed as continuing. CONDENSED CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2007 30 Sept 2007 30 Sept 2006 31 March 2007 Unaudited Unaudited Audited £ £ £ASSETSNon-current assetsProperty, plant and equipment 402,087 545,230 506,450Intangible assets 4 18,807 34,450 15,311 420,894 579,680 521,761Current assetsTrade and other receivables 2,394,338 2,388,969 2,423,266Cash and cash equivalents 1,819,013 3,200,583 1,931,094 4,213,351 5,589,552 4,354,360Total assets 4,634,245 6,169,232 4,876,121 EQUITYCapital and reserves attributable to equityholders of the CompanyShare capital 9 5,383,282 5,369,548 5,369,548Share premium account 5,320,067 5,310,885 5,310,885Merger reserve 1,236,225 1,236,225 1,236,225Other reserve 743,152 406,770 595,835Accumulated losses (11,153,395) (8,379,814) (10,072,270)Total equity 1,529,331 3,943,614 2,440,223 LIABILITIESCurrent liabilitiesTrade and other payables 3,104,914 2,225,618 2,435,898Total liabilities 3,104,914 2,225,618 2,435,898Total equity and liabilities 4,634,245 6,169,232 4,876,121 CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR SIX MONTHS ENDED 30 SEPTEMBER2007 30 Sept 2007 30 Sept 2006 31 March 2007 Unaudited Unaudited Audited Note £ £ £ Net cash used by operating activities 6 (167,052) (1,559,749) (2,821,343) Cash flows generated from/(used by) investing activitiesPurchases of property, plant and equipment (10,756) (295,512) (352,525)Purchases of intangible assets - (15,971) (15,971)Disposal of property, plant & equipment - 1,007 2,984Interest received 42,811 89,372 147,284Net cash generated from/(used by) investing activities 32,055 (221,104) (218,228) Cash flows generated from financing activitiesProceeds from other issue of ordinary shares 22,916 118,432 118,433Net cash generated from financing activities 22,916 118,432 118,433 Net decrease in cash and cash equivalents (112,081) (1,662,421) (2,921,138) Cash and cash equivalents at beginning of period 1,931,094 4,863,004 4,852,232 Cash and cash equivalents at end of period 1,819,013 3,200,583 1,931,094 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30 SEPTEMBER 2007 Share premium Merger Other Accumulated Share capital account reserve reserve losses Total £ £ £ £ £ £ At 1 April 2006 5,306,864 5,255,136 1,236,225 194,195 (6,755,164) 5,237,256 Loss for the period - - - - (1,624,650) (1,624,650) Total income / (expense) 5,306,864 5,255,136 1,236,225 194,195 (8,379,814) 3,612,606recognised for theperiod Exercise of share 62,684 55,749 - - - 118,433optionsShare-based payment - - - 212,575 - 212,575charge At 30 September 2006 5,369,548 5,310,885 1,236,225 406,770 (8,379,814) 3,943,614 Loss for the period - - - - (1,692,456) (1,692,456) Total income / (expense) 5,369,548 5,310,885 1,236,225 406,770 (10,072,270) 2,251,158recognised for theperiod Share-based payment - - - 189,065 - 189,065charge At 31 March 2007 5,369,548 5,310,885 1,236,225 595,835 (10,072,270) 2,440,223 Loss for the period - - - - (1,081,125) (1,081,125) Total income / (expense) 5,369,548 5,310,885 1,236,225 595,835 (11,153,395) 1,359,098recognised for theperiod Exercise of share 13,734 9,182 - - - 22,916optionsShare-based payment - - - 147,317 - 147,317charge At 30 September 2007 5,383,282 5,320,067 1,236,225 743,152 (11,153,395) 1,529,331 Notes to the financial statements 1. General information Bango plc ("the Company"), a United Kingdom resident, and its subsidiaries(together "the Group") provide services to facilitate activity on the mobileinternet. The Company's shares are listed on the Alternative Investment Marketof the London Stock Exchange ("AiM"). The address of the Company's registeredoffice is 5, Westbrook Centre, Milton Road, Cambridge CB4 1YG. The condensed consolidated interim financial information was approved by theboard of directors on (14 November 2007). 2. Basis of preparation The condensed interim financial information for the half year ended 30 September2007 has been prepared in accordance with IAS 34 'Interim financial reporting'.The interim condensed financial report should be read in conjunction with theannual financial statements for the year ended 31 March 2007. The condensed consolidated financial information has been preparedunder the historical cost convention. 3. Principal accounting policies The principal accounting policies adopted are consistent with those of theannual financial statements for the year ended 31 March 2007. 4. Segment information (a) The Group operates in three main business segments. Management reportingis based principally on the type of service provided to customers. Accordingly,the Group presents its primary segment analysis on this basis: Six months ended 30 September 2007 Content access Content Services to Group Total fees provider fees mobile operators £ £ £ £ £Segment revenue 5,788,816 1,046,950 - - 6,835,766Segment costs 5,207,831 230,507 - 2,521,364 7,959,702Segment result 580,985 816,443 - (2,521,364) (1,123,936) Six months ended 30 September 2006 Content access Content Services to Group Total fees provider fees mobile operators £ £ £ £ £Segment revenue 3,891,701 699,125 12,000 - 4,602,826Segment costs 3,197,251 83,620 - 3,035,977 6,316,848Segment result 694,450 615,505 12,000 (3,035,977) (1,714,022) Year ended 31 March 2007 Content access Content Services to Group Total fees provider fees mobile operators £ £ £ £ £Segment revenue 8,859,633 1,536,564 32,115 - 10,428,312Segment costs 7,686,510 275,893 - 5,930,299 13,892,702Segment result 1,173,123 1,260,671 32,115 (5,930,299) (3,464,390) Group costs include all costs associated with staff, property & office,marketing and depreciation. (b) The secondary segment analysis is presented on a geographical basis: Six months ended 30 September 2007 United Kingdom Rest of EU USA & Canada Rest of World Total £ £ £ £ £ Segment revenue 4,941,742 772,749 909,252 212,023 6,835,766 Six months ended 30 September 2006 United Kingdom Rest of EU USA & Canada Rest of World Total £ £ £ £ £ Segment revenue 3,916,661 246,750 316,936 122,479 4,602,826 Year ended 31 March 2007 United Kingdom Rest of EU USA & Canada Rest of World Total £ £ £ £ £ Segment revenue 8,472,721 741,241 934,623 279,727 10,428,312 5. Earnings per share (a) Basic and diluted earnings per share Basic earnings per share is calculated by dividing the loss attributable toequity holders of the Company by the weighted average of ordinary shares inissue during the period. Six months ended Six months ended Year ended 31 30 Sept 2007 30 Sept 2006 March 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Loss attributable to equity holders of the Company (1,081,125) (1,624,650) (3,317,106) Weighted average number of ordinary shares in issue 26,893,610 26,615,553 26,746,721 Basic and diluted loss per share (4.02) (6.10) (12.40) 6. Cash used by operations Six months ended Six months ended Year ended 31 30 Sept 2007 30 Sept 2006 March 2007 Unaudited Unaudited Audited £ £ £ Loss before taxation (1,081,125) (1,624,650) (3,317,106)Depreciation 111,623 73,892 186,847Net finance costs (42,811) (89,372) (147,284)Share-based payment expense 147,317 212,575 401,640(Increase)/decrease in receivables 28,928 (121,511) (155,808)Increase/(decrease) in payables 669,016 (10,683) 210,368Net cash used by operations (167,052) (1,559,749) (2,821,343) 7. Share capital During the period, 68,670 share options were exercised at exercise pricesranging between 29.5 pence and 50 pence for 68,670 shares with a par value of 20pence. The total proceeds were £22,916 of which £13,734 was recognized as sharecapital and £9,182 as share premium. On 9 July 2007 15,000 options were granted to employees based in the USA, and on19 September 2007 233,000 options were granted to employees. No options weregranted to Directors during the period. 8. Publication of non-statutory accounts The financial information set out in this interim report does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Thefigures for the year ended 31 March 2007 have been extracted from the StatutoryFinancial Statements of Bango plc, which have been filed with the Registrar ofCompanies. The auditor's report on those financial statements is unqualified.The financial information for the six months to 30 September 2007 and for thesix months to 30 September 2006 is unaudited. The interim report together with an analysts briefing presentation will bedistributed to all shareholders shortly and copies will be available from theCompany's website at www.bango.com This information is provided by RNS The company news service from the London Stock Exchange