TIDMMONI
RNS Number : 8208C
Monitise PLC
22 January 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
22 January 2015
Monitise plc
Trading Update & Initiation of Strategic Review
(including commencement of offer period under the Takeover
Code)
Transition of business model supported by major partners
Monitise reiterates its guidance to achieve EBITDA profitability
in FY 2016
31 December 2014 gross cash GBP129m ($195m) and debt free
H1 FY 2015 revenue GBP42.4m/$64.1m (H1 2014:
GBP46.5m/$70.3m)
Monitise revises revenue guidance for FY 2015 to
GBP90-100m/$136-151m
Monitise appoints Moelis & Company to conduct review of all
strategic options to maximise value for shareholders
Monitise plc (LSE: MONI.L) ("Monitise", the "Company" or
"Group") announces an unaudited trading update following its 31
December 2014 half-year results period end.
As announced in March 2014, Monitise is undertaking a transition
in its business to a product-based recurring revenue model. This
transition continues in 2015.
The support for this transition from clients and partners is
reflected in the major partnership announcements in H1 FY 2015.
Monitise is planning to host a Capital Markets Day for
institutional investors in central London on the morning of 17
February 2015, following the publication of its FY 2015 interim
results, and a follow-up Capital Markets Day in New York on 24
February 2015.
Financial and metrics update
-- H1 FY 2015 revenue of GBP42.4m/$64.1m comprised subscription
& transaction revenue of GBP16.2m/$24.5m, up 8% sequentially,
licence revenue of GBP4.4m/$6.7m down 47% sequentially, and
development & integration revenue of GBP21.8m/$33.0m down 13%
sequentially. The change in revenue mix is consistent with
Monitise's business model transition.
-- Gross cash at 31 December 2014 of GBP129m/$195m provides
balance sheet strength to see Monitise through to cash flow
breakeven and beyond.
-- Monitise's total user count now exceeds 82 million with:
- a growth in registered end users from 30m in June 2014 to 33m at end December 2014.
- a further 49m-plus downloads of Monitise-designed
high-engagement apps across multiple industry verticals and email
subscribers to the Monitise Content consumer business.
-- Further growth in live transactions in December 2014 with
5.1bn transactions on an annualised basis, +50% on 3.4bn a year
ago. Payments and transfers initiated via Monitise technology now
worth $101bn on an annualised basis, +49% on $68bn a year ago.
Guidance
-- FY 2015 revenue is expected to be between
GBP90-100m/$136-151m (FY 2014: GBP95.1m/$143.7m) compared with
previous guidance of at least 25% growth. Driven by the effects of
our business transition, including lower one-off licence revenue,
guidance is based on committed revenues and those that Monitise has
high confidence in booking within the financial period.
-- As part of the re-shaping of our business, Monitise expects
its FY 2016 total cost base to be materially lower than current
consensus (which is approx. GBP180m/$272m) reflecting a number of
initiatives commenced during the period, including the transition
of UK professional services employees to IBM, and streamlining
benefits of the shift to being a product-based business. As a
result, while the FY 2015 EBITDA loss is expected to be
GBP40-50m/$60-76m (the "FY 2015 Profit Forecast"), Monitise
reiterates its expectation to be EBITDA profitable in FY 2016 (the
"FY 2016 Profit Forecast").
-- Capex guidance reiterated at GBP35-45m/$53-68m in FY 2015.
-- Monitise reiterates guidance of 200m users and GBP2.50 ARPU
by end FY 2018, based on the scale of the market opportunity and
partnerships in place.
-- Monitise also reiterates guidance of more than 30% EBITDA
margins by end FY 2018, underpinned by high operational leverage in
the business.
Highlights
-- Strengthened relationships with Santander, Telefónica,
MasterCard and IBM, supporting the Company's transition to its new
business model. These partnerships bring hundreds of millions of
consumers globally to our addressable market.
-- A new seven-year digital banking strategic partnership was entered into with Virgin Money.
-- New partnerships and product launches including:
- A five-year contract win with a leading Business Process
Outsourcing provider entered into in December to launch Mobile
Money Services.
- Apple Touch ID fingerprint services being integrated for İ
bank, Turkey's largest private bank for its digital banking
app.
-- Client app launch highlights included the iOS mobile app
created for Doddle, the new 'click and collect' parcel service, and
SmartBank, Santander's new mobile banking app designed for
students.
Strategic Review
In light of recent share-price weakness, shareholder feedback
and industry developments, Monitise announces that it is commencing
a review of all options open to the Company to maximise value for
shareholders (the "Strategic Review"). The Board of Directors (the
"Board') has appointed Moelis & Company UK LLP ("Moelis &
Company") as financial adviser and Canaccord Genuity as Nomad and
Broker in connection with the Strategic Review. The Board believes
that the Company has an exciting future as an independent business,
however it recognises that there may be other businesses which
could leverage Monitise's capabilities for digital commerce
enablement to significantly accelerate the growth of the business
and take maximum advantage of the growth opportunities in the
market today. The Strategic Review is expected to be all
encompassing and will include consideration of corporate
transactions and stock market listing options.
Monitise co-CEOs Alastair Lukies and Elizabeth Buse said: "We
are successfully transitioning our business to a product-led,
recurring revenue digital technology company. Partner and client
support for this was underscored by major partnership updates
during the first half, and the many services we developed and
helped to launch across Europe, the Americas and Asia."
They added: "We have a winning formula based on a combination of
world-class design serving a wide range of sectors, configurable
products for omni-channel solutions via API delivery, an
extraordinary range of partners and the exceptional talent and
experience of our teams. In our business and the review we are now
embarking on, we remain focused on ensuring the best possible
outcome for all Monitise stakeholders."
Takeover Code Implications
Any discussions in relation to a merger with a third party or a
sale of the Company will take place within the context of a "formal
sale process" as defined in The Takeover Code (the "Code") in order
to enable conversations with parties interested in making such a
proposal to take place on a confidential basis.
Parties with a potential interest in making an offer for, or
merging with Monitise should contact Moelis & Company (contact
details as set out below). Any interested party will be required to
enter into a non-disclosure agreement with the Company on terms
satisfactory to the Board and on the same terms, in all material
respects, as the other interested parties, before being permitted
to participate in the process. The Board reserves the right to
alter any aspect of the process or to terminate it at any time and
will make further announcements as appropriate. The Board reserves
the right to reject any approach or terminate discussions with any
interested party or participant at any time.
The Takeover Panel has granted a dispensation from the
requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such
that any interested party participating in the formal sale process
will not be required to be publicly identified as a result of this
announcement (subject to note 3 to Rule 2.2 of the Code) and will
not be subject to the 28 day deadline referred to in Rule 2.6(a),
for so long as it is participating in the formal sale process.
Interested parties should note Rule 21.2 of the Code, which will
prohibit any form of inducement fee or other offer-related
arrangement, and that the Company, although it may do so in the
future, has not at this stage requested any dispensation from this
prohibition under Note 2 of Rule 21.2.
This announcement is not an announcement of a firm intention to
make an offer under Rule 2.7 of the Code and there can be no
certainty that an offer will be made, nor as to the terms on which
any offer will be made.
Following this announcement, the Company is now considered to be
in an "offer period" as defined in the Code, and the dealing
disclosure requirements listed below will apply.
In accordance with Rule 28.1(c)(i) of the Code the Board of
Monitise confirms that the statements relating to FY 2015 and FY
2016 EBITDA herein have been properly compiled on the basis of the
assumptions stated below and that the basis of accounting used is
consistent with the Company's accounting policies.
BASIS OF PREPARATION OF AND ASSUMPTIONS FOR FY 2015 AND FY 2016
PROFIT FORECASTS
Set out below is the basis of preparation in respect of the FY
2015 Profit Forecast and the FY 2016 Profit Forecast (together the
"Profit Forecasts"), together with the assumptions on which they
are based.
Basis of preparation
The FY 2015 Profit Forecast is based on the draft unaudited half
year financial statements of Monitise for the six months ended 31
December 2014 and the management account forecasts for the six
months ended 30 June 2015. The FY 2016 Profit Forecast is based on
the management account forecasts for the 12 months ended 30 June
2016. The Profit Forecasts have been prepared on a basis consistent
with the current accounting policies of the Company. The Profit
Forecasts exclude any transaction costs applicable to the Strategic
Review or any other associated accounting impacts as a direct
result of the Strategic Review.
Assumptions
The Profit Forecasts are based on the following assumptions for
the period to which they relate:
Factors outside the influence or control of the Monitise
Board:
-- There will be no material changes to prevailing global macroeconomic or political conditions
-- There will be no material changes to the conditions of the
markets in which Monitise operates.
-- The main exchange, inflation and tax rates in Monitise's
principal markets will remain materially unchanged from the
prevailing rates.
-- There will be no material adverse events that will have a
significant impact on Monitise's financial performance.
-- There will be no material changes in legislation or
regulatory requirements impacting on Monitise's operations or its
accounting policies.
-- The announcement of the Strategic Review will not result in
any material changes to Monitise's obligations to customers.
Factors within the influence and control of the Monitise
Board:
-- The announcement of the Strategic Review will not have any
material impact on Monitise's ability to negotiate new
business.
-- Successful realignment of the cost base with the transition to the new business model.
FORWARD LOOKING STATEMENTS
This announcement contains (or may contain) forward-looking
statements. Whilst these forward-looking statements are made in
good faith they are based upon the information available to
Monitise at the date of this announcement and upon Monitise's or,
as appropriate, Monitise's Directors' current expectations,
projections, market conditions and assumptions about future events.
These forward looking statements are subject to risks,
uncertainties and assumptions about Monitise and its Group,
including, among other things, the development of its business,
trends in its operating industry, and future capital expenditure.
In light of these risks, uncertainties and assumptions, the events
or circumstances referred to in the forward-looking statements may
differ materially from those indicated herein. None of the
projections, expectations, estimates or prospects set out in this
announcement should be taken as forecasts or promises nor should
they be taken as implying any indication, assurance or guarantee
that the assumptions on which such future projections,
expectations, estimates or prospects have been prepared are correct
or exhaustive or, in the case of the assumptions, fully stated in
this announcement. Accordingly these forward-looking statements
should be treated with an appropriate degree of caution and you
should not place undue reliance on any forward-looking statements
as a prediction of actual results or otherwise. None of Monitise,
its Group, nor any of its directors, their respective affiliates,
or individuals acting on their behalf undertake to publicly update
or revise any such forward-looking statements set out in this
announcement, whether as a result of new information, future events
or otherwise. Other than the Profit Forecasts, no statement in this
announcement is or is intended to be a profit forecast or profit
estimate or to imply that the earnings of the Group for the current
or future financial years will necessarily match or exceed the
historical or published earnings of the Group. Past performance is
no guide for future performance and persons reading this
announcement should consult an independent financial adviser.
US RECIPIENTS
This announcement is being issued outside the United States
pursuant to and in accordance with Rule 135e under the U.S.
Securities Act of 1933, as amended (the "Securities Act"). This
announcement shall not constitute or form a part of any offer of,
or solicitation to purchase or subscribe for, any securities, nor
shall there be any sale of any securities in any state in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state. The securities referred to in this announcement have not
been, and will not be, registered under the Securities Act and may
not be offered or sold in the United States or to, or for the
account or benefit of, U.S. persons (as such term is defined in
Regulation S under the Securities Act), except pursuant to an
exemption from the registration requirements of the Securities Act.
No public offering of securities will be made in the United States
or in any other jurisdiction where such an offering is restricted
or prohibited.
Enquiries:
Investor Relations
Richard Johnson, Haya Herbert-Burns Tel: +44(0)20 3657
investorrelations@monitise.com 0366
Media Relations
Gavin Haycock
Gavin.haycock@monitise.com Tel: +44(0)20 3657
0362
Moelis & Company
Mark Aedy, Elliot Richmond
Canaccord Genuity Tel: +44(0)20 7634
(NOMAD) 3500
Simon Bridges, Cameron Duncan
FTI Consulting Tel: +44(0)20 7523
Charles Palmer, Rob Mindell 8000
Tel: +44(0)20 7831
3113
A copy of this announcement will be available on the Company's
website at www.monitise.com as soon as possible. The content of the
website referred to in this announcement is not incorporated into
and does not form part of this announcement.
Moelis & Company is acting exclusively as financial adviser
to Monitise and no one else in connection with the matters
described in this announcement. In connection with such matters,
Moelis & Company will not regard any other person as their
client, nor will they be responsible to any person other than
Monitise for providing the protections afforded to clients of
Moelis & Company or for providing advice in connection with the
matters described in this announcement or any matter referred to
herein.
Canaccord Genuity Limited, which is authorised and regulated in
the United Kingdom by the Financial Conduct Authority, is acting as
NOMAD and Broker to Monitise and is acting for no-one else in
connection with the transactions herein and will not be responsible
to anyone other than Monitise for providing the protections
afforded to clients of Canaccord Genuity Limited nor for providing
advice in connection with the transactions or any other matter
referred to herein.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities whether pursuant to this
announcement or otherwise. The distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, Monitise confirms that
it has 2,135,912,081 ordinary shares of 1 pence each in issue and
admitted on the Alternative Investment Market of the London Stock
Exchange under the UK ISIN Code: GB00B1YMRB82.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Further information: Any figures in this announcement expressed
in $ or US Dollars have been calculated on the basis of GBP:USD
spot rate of 1.5115 as shown on Bloomberg as at 5:00pm (GMT) on 21
January 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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