Full year results of Monitise, the UK-based Mobile Money specialist, show revenue up 102% to £72.8m, and EBITDA losses, nearly doubled, to £19.3m, but H2 losses represented a significant improvement, at £4.6m . The figures mark the end of a frenetic year of deals, acquisitions and globe-trotting, funded by a capital raising in December. This activity has climaxed over the last 3 months, producing deals with Telefonica, Lloyds Bank and VISA, with the addition of yesterday’s collaboration agreement with IBM.
Now Monitise has to show that it can manage this web of opportunity and deliver on its potential. Discipline is key to success for its Bank Anywhere, Pay Anyone and Buy Anything product sets, so that “cookie-cut” implementations can be delivered globally. Growth will be supported by resources from its customer and system integrator partners, but operating costs will still rise strongly, albeit at a lower rate than revenue.
Importantly, the sources of revenue growth are changing. With banks as partners, the revenue model was based on subscriber numbers and then transaction fees from counterparties. As non-bank partners are recruited, the balance shifts more to the sale of product licenses. In 2013, these generated 19% of group sales, almost all from second half deals. These bring revenue and profit forward, but reduce the “hockey-stick” of longer term growth.
Monitise is guiding forecasts to revenue growth of 50%, in line with the organic growth just reported and sensibly being non-committal about EBITDA forecasts, where much will depend on new deals. The results show that Monitise is beginning to deliver more substance and its web of relationships provides it with the potential scale and reach so vital in e-commerce and which set it apart from many of its competitors. Now let’s see them deliver some profit.