21 Jan 2016 07:00
Monitise plc
Trading Update
LONDON ‐ 21 January 2016 ‐ Monitise plc (LSE: MONI) ("Monitise" or the "Company") announces an unaudited trading update for the six months ended 31 December 2015.
Financial Update and Outlook
· H1 FY 2016 revenue is expected to be approximately £33m, with revenue in the second half anticipated to be broadly similar
· Existing businesses generating positive EBITDA going forward
· Targeted investment in developing our new cloud-based offering, FINkit®
· Decisive action on costs has been taken and a further material reduction in total costs is expected in H2 FY 2016
o Total costs of £53m in H1 FY 2016 projected to reduce by approximately £3m per month in second half
· Monitise is projecting H2 FY 2016 to be EBITDA positive following H1 FY 2016 EBITDA loss of approximately £20m
· Whilst timing of cashflows for onerous contracts and restructuring adversely impacts cash balances, which are now expected to fall below previous guidance of a £45m minimum, gross cash at 31 December 2015 of £53m and prospective EBITDA positive trading for H2 FY 2016 means the business is sufficiently well funded to meet its future plans
Accounting Adjustments
· Following a reassessment of the Company's strategic plan a further review of intangible assets has been undertaken and it is anticipated that a non-cash impairment charge in relation to these non-Cloud assets of £160-170m will be made
· During the period exceptional costs of £6m have been recognised as part of the business restructuring. An offsetting exceptional credit of £5m has been recognised following a restructuring of customer contracts
Operational Update
· Our customer relationships have remained strong during this period, our pipeline is robust and continues to develop, we are well progressed with a number of our existing and prospective customers who are interested in utilising our cloud-based offering through FINkit®, and we have successfully proven the capabilities of FINkit® through a customer proof of concept
· Tighter cost discipline will be maintained throughout FY 2016 and beyond whilst we continue to invest in our cloud business, making sure such investment is proportionate to the size and timing of customer contracts
· Ongoing cost disciplines have improved transparency and accountability enabling each business unit to have full ownership of their respective P&Ls
· We continue to evaluate all assets within the Monitise group to ensure they remain core to our proposition
The Company expects to publish its 2016 interim results on 12 February 2016.
Monitise CEO Lee Cameron said: "Since I became CEO in September, I have focused on stabilising and restructuring the business and ensuring that we continue to develop our cloud proposition. The combination of a significantly reduced cost base, tight management of our existing business units and increasing interest for our cloud capability give the Board confidence that Monitise will achieve EBITDA breakeven in H2 FY 2016."
About Monitise
Monitise plc (LSE: MONI) is a digital technology company creating new ways to connect, interact and transact. Our platforms, products and ideas lead to smarter, better experiences that help financial services companies and brands across many other sectors forge closer relationships with their customers. Through our cloud-based approach, design consultancy and content business, we make everyday actions easier for millions of people. Find out more at www.monitise.com.
FINkit® is designed specifically for financial institutions. It lets customers build and run secure and compliant products and services faster than ever. FINkit® is a unique combination of a cloud-based environment, pre-built API-based financial components, and use of the latest secure and agile continuous development methodologies.
For further information:
Monitise plc
Lee Cameron, Chief Executive Officer Tel: +44(0)20 3657 0331
Canaccord Genuity (NOMAD)
Simon Bridges, Cameron Duncan, Emma Gabriel Tel: +44(0)20 7523 8000
Brunswick
Jonathan Glass, Jon Drage Tel: +44(0)20 7404 5959