Interim Results
Bango PLC
18 October 2006
18th October 2006
BANGO PLC
('Bango' or 'the Company')
Interim Results for 6 months ending 30th September 2006
Bango (AIM:BGO) announces today results for the 6 months ending 30th September
2006 showing rapid growth in revenues and customer acquisition, continued growth
in global partners including a worldwide partnership with Yahoo! and the
deployment of the latest generation of its unique mobile internet platform.
Highlights
• Revenues up 43% to £4.60m (H1 FY05: £3.22m)
• Content provider revenues up 78% to £0.7m
• End user spend up 40% to £3.9m
• Gross profit up 40% to £1.32m (H1 FY05: £0.95m)
• New customer wins including MTV, Daily Telegraph and FT.com
• Global partnership agreement with Yahoo!
• Global expansion and launch into new markets such as Germany, Spain
and the US
• Bango set to benefit from market growth being driven by global brands
Commenting on the interim results Lindsay Bury, Chairman of Bango, said:
'During this stage of the Company's development it is critical that Bango
establishes a strong market presence on an international basis and develops a
broad and loyal customer base of content providers. It is the provision of
compelling content by these companies via Bango that will drive the market and
the Company's future growth.
The quantity and calibre of companies selecting Bango's technology during the
period to launch services on the mobile internet is evidence that Bango has
achieved this goal, and resulted in an impressive 78% increase in content
provider revenues. This is extremely encouraging.
Although expectations of breakeven for the year are now unlikely to be met, due
to slower end user spend, we are still expecting monthly breakeven by the end of
the second half. Based on growth in the year to date and our visibility of
activities by our customers, coupled with the company's partnerships and central
position in a high growth market, we look forward to the future with
confidence.'
Contact Details:
Bango plc ICIS Limited Panmure Gordon & Co
Tel. +44 1223 472777 Tel. +44 20 7651 8688 Tel. +44 20 7459 3600
Ray Anderson, CEO Tom Moriarty Aubrey Powell
Peter Saxton, CFO Caroline Evans-Jones Stuart Gledhill
Introduction
I am pleased to report that we are successfully deploying our unique technology
and relationships in the market to increase the size and value of the Bango
customer base. The strength of our position is attracting industry giants such
as Yahoo! to work with Bango. This in turn is attracting more content providers
to the Bango platform.
A wide range of major content brands, television channels and internet companies
have endorsed our view of the mobile market by signing up for Bango products.
This gives us great confidence in the rapid growth of this exciting opportunity.
We believe that we have the right level of resources in place to generate and
support the major growth in customer sign ups and transaction volumes that we
anticipate in the coming months. We are therefore confident that we are able to
increase our profitability in the UK market and move to overall profitability.
Financial highlights
Six months ended Change on Six months ended Year ended
30 September 2006 H1 2006 30 September 2005 31 March 2006
Unaudited Unaudited Audited
£m (restated) £m (restated) £m
Turnover 4.60 Up 43% 3.22 7.53
Gross profit 1.32 Up 40% 0.95 2.19
Margin % 28.7% Stable 29.4% 29.1%
Operating loss before share (1.50) (0.51) (1.53)
option costs
Loss before tax (1.62) (0.47) (1.46)
Cash outflow from 1.56 0.64 1.65
operations
Cash position 3.2 6.0 4.9
Basic and fully diluted 6.1 p 1.9 p 5.8 p
loss per share
As a result of continued growth and take up of our service turnover increased by
43% to £4.60M compared with the same period last year. The major contributors
to this increase came from the growth in the monthly content provider fees which
increased by 78% and content access fees which increased by 40%, which is an
encouraging trend. Accordingly, gross profit has grown 40% to £1.32M in line
with the growth in turnover.
We have expanded operations on an international basis where we see significant
opportunity for the Company. Operating expenses therefore increased by £1.37m
primarily reflecting the increased investment in people and associated costs
incurred to support the Bango sales and marketing organization in the USA,
Germany and Spain.
The cash outflow from operations was broadly in line with trading results for
the period, reflecting the small change in working capital requirement despite
the substantial increase in turnover. With a cash balance of £3.2 million at the
half year stage, and a declining demand on cash going forward as the business
moves towards profitability, Bango is well funded to ensure it exploits the
commercial opportunities available.
Sales and marketing
Bango has achieved a significant growth in customer acquisition in the period,
due to improved sales productivity in the UK and through its newly established
US, Spanish and German operations. More than 100 internet businesses have
signed up for Bango's Pro or Target services in the last 6 months, about the
same number that signed up in the whole of last year. New customers include MTV,
Capcom, Daily Telegraph, FT.Com, Agent Provocateur, Jamba, Flycell, Betfred,
Yamaha Music, EA mobile, Rascal Flatts, Mediaplazza, Cellcity, Hands-on mobile
(Mforma), Carmunity and Activefone(MOMO).
Customer attrition rates remain low at around 5% per year. In addition, whilst
transaction levels over the summer were slower than expected, these accelerated
in September and given the visibility of the marketing plans of our pre-existing
and more recently acquired major customers, we are increasingly confident of
transaction growth in the coming months.
Bango has established a sales, marketing and customer service presence in New
York and a sales office in California. The US team is now approximately the same
size as the European teams combined. We have been pleased by our early sales
performance in the US which is excellent considering that the direct to consumer
proposition is still very new and our sales team has only been established since
early 2006.
The Bango satellite offices in Koln and Madrid are building a pipeline of
prospects and winning early customers. Bango has integrated with the German and
Spanish mobile operators billing systems.
Yahoo! Agreement
In September we announced our agreement with Yahoo! to enable Yahoo! advertisers
to benefit from Bango technology and Bango customers to benefit from Yahoo!
search marketing and advertising. We believe this is an important development
for both Bango and in growing the market.
Product development
There were three main development activities during the period, all of which
were aimed at providing new functionality and a base for more rapid future
developments.
• A new generation of the Bango platform was deployed during the summer
which simplifies the use of Bango products and services, and makes our sales
processes more efficient.
• We opened up 'web services' access to the Bango platform for partners
who want to leverage the power of Bango but provide their own content provider
interfaces.
• Additional equipment and software was added at our data centres to
handle increased traffic levels which are being forecast by certain of our
larger customers in the coming months.
Market positioning
Bango's business is targeted at providing services and technology to content and
service providers that engage with users through the mobile internet. Bango
services generate user traffic, provide information about visiting users and
collect payment world-wide. The market is at an early stage but growing fast.
Over the past six months, the marketplace has evolved broadly as envisaged by
Bango in our annual report. In particular Google and Yahoo! and Microsoft have
started to put effort into mobile search and in encouraging their advertisers to
move to the mobile internet alongside the PC internet and major brands such as
the BBC, ITV, CNN, Google and USA Today have started to promote their mobile
content - educating users to the potential of the mobile internet.
Given our central position as a payment mechanism on the mobile internet, we are
well positioned to benefit from the various initiatives designed to drive the
growth of the market. In the US we are building on our unique relationship with
Cingular - the US's biggest operator, and we are forming similar relationships
with the other US operators.
We intend to continue to implement our strategy, but to shift our focus to
consolidating our position in our existing markets and providing the tools and
support to our larger content providers to help them achieve their ambitions for
the use of Bango to grow their own sales.
Current trading and prospects
In the period, Bango achieved significant growth in customer acquisition,
including many leading brands in the US and Europe, has deployed the next
generation of its unique technology and has announced its partnership with
Yahoo! that the management believe will bring significant benefits to the
company and its customers.
As discussed above, the summer months saw lower than anticipated levels of
activity from our customers and lower levels of end user spend. While this
trend has since been reversed, profitability will not now be reached for the
financial year as a whole. However, with the cost base and headcount contained,
our recurring revenue model, fast growth in customer acquisition and strong
indications of end user activity from larger customers, the scene is set for
rapid growth and a move to monthly profitability of the whole business by the
end of the second half.
BANGO PLC
Interim Results for 6 months ending 30th September 2006
Consolidated Summarised Profit and Loss account
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
Restated Restated
(unaudited) (unaudited) (audited)
Note £ £ £
Turnover 2 4,602,826 3,218,334 7,532,877
Cost of Sales 3,280,871 2,272,846 5,341,577
Gross Profit 1,321,955 945,488 2,191,300
Other Operating charges 2,823,402 1,453,760 3,719,266
Operating loss before share option cost (1,501,447) (508,272) (1,527,966)
Share option costs 212,575 38,281 127,029
Operating loss (1,714,022) (546,553) (1,654,995)
Interest Receivable 89,372 73,926 195,069
Loss on ordinary activities before taxation (1,624,650) (472,627) (1,459,926)
Tax on loss on ordinary activities - - -
Loss for the period (1,624,650) (472,627) (1,459,926)
Basic and diluted loss per share 3 6.1 pence 1.95 pence 5.84 pence
(pence)
All of the activities of the group are classed as continuing.
The group has no recognised gains or losses other than the results set out
above.
Consolidated Summarised Balance Sheet
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
Restated Restated
(unaudited) (unaudited) (audited)
£ £ £
Fixed Assets
Tangible assets 579,680 105,263 343,096
Current Assets
Debtors 2,388,969 1,475,739 2,267,458
Cash at bank 3,200,583 5,956,558 4,863,004
5,589,552 7,432,297 7,130,462
Creditors: amounts falling due within one year 2,175,440 1,436,447 2,186,123
Net current assets 3,414,112 5,995,850 4,944,339
Total assets less current liabilities 3,993,792 6,101,113 5,287,435
Capital and reserves
Called-up equity share capital 5,360,472 5,246,229 5,306,864
Share premium account 5,319,960 5,230,898 5,255,136
Merger Reserve 1,236,225 1,236,225 1,236,225
Profit and Loss account (8,328,509) (5,678,279) (6,703,859)
Share option reserve 405,644 66,040 193,069
Shareholders' funds 3,993,792 6,101,113 5,287,435
Consolidated Summarised cash flow statement
Six months ended Six months ended Year ended
30 September 30 September 31 March
2006 2005 2006
(unaudited) (unaudited) (audited)
Note £ £ £
Net cash outflow from operating activities 4 (1,559,508) (642,687) (1,652,206)
Returns on investments and servicing of finance
Interest received 89,372 73,926 195,069
Net cash inflow from returns on investments and servicing of
finance 89,372 73,926 195,069
Capital expenditure
Receipt from disposal of fixed assets 766 - -
Payments to acquire tangible fixed assets (311,483) (43,628) (333,679)
Net cash outflow from capital expenditure (310,717) (43,628) (333,679)
Financing
Issue of equity share capital 53,608 1,059,329 1,119,963
Share premium on issue of equity share capital 64,824 5,955,224 5,999,758
Share issue expenses - (765,826) (786,121)
Net cash inflow from financing 118,432 6,248,727 6,333,600
Increase/(decrease) in cash (1,662,421) 5,636,338 4,542,784
Reconciliation of movements in shareholders' funds
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
Restated Restated
(unaudited) (unaudited) (audited)
£ £ £
Loss for the period (1,624,650) (472,627) (1,459,926)
Share option expenses credited to other reserves 212,575 38,281 127,029
New equity share capital subscribed 53,608 1,059,329 1,119,964
Net premium on new share capital subscribed 64,824 5,230,898 5,255,136
Net addition to shareholders' equity funds (1,293,643) 5,855,881 5,042,203
Opening shareholders' equity funds 5,287,435 245,232 245,232
Closing shareholders' equity funds 3,993,792 6,101,113 5,287,435
Notes
1. Accounting policies and basis of preparation
The interim financial statements have been prepared in accordance with
applicable accounting standards and under the historical cost convention and in
accordance with the accounting policies set out in the financial statements of
Bango plc for the year ended 31 March 2006.
The exception to this is FRS 20 Share based payments, which has been adopted in
the period under review and the comparatives have been restated to reflect this.
The fair value of the share options granted is recognised as an employee
expense over the vesting period of the relevant options, with a corresponding
increase in equity. The charge recognised reflects the number of options that
had not vested at 31 March 2006 and the options granted after that date. Fair
value has been determined by an independent external valuer.
2. Turnover
The turnover is attributable to one principal activity of the company. Turnover
is split between the following activities:
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
(unaudited) (unaudited) (audited)
£ £ £
Content access fees 3,891,702 2,783,899 6,470,383
Content provider fees 699,124 392,085 1,002,619
Non-standard Services
for Mobile Network Operators 12,000 42,350 59,875
4,602,826 3,218,334 7,532,877
A geographical analysis of the turnover in the period is given below:
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
(unaudited) (unaudited) (audited)
£ £ £
United Kingdom 3,916,661 2,963,781 6,833,613
EU 246,750 48,826 254,363
US and Canada 316,936 153,594 344,180
Rest of World 122,479 52,133 100,721
4,602,826 3,218,334 7,532,877
3. Loss per share
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
Restated Restated
(unaudited) (unaudited) (audited)
£ £ £
Loss for the period 1,624,650 472,647 1,459,926
Weighted average number of shares
in issue 26,615,553 24,223,073 24,983,944
Basic and diluted earnings per 6.1 pence 1.95 pence 5.84 pence
share
Share options outstanding on 30th September 2006 are considered to be
non-dilutive.
4. Notes to the statement of cash flows
Reconciliation of operating loss to net cash outflow from operating activities
Six months ended Six months ended Year ended
30 September 2006 30 September 2005 31 March 2006
Restated Restated
(unaudited) (unaudited) (audited)
£ £ £
Operating Loss (1,714,022) (546,553) (1,654,995)
Shares issued in lieu of services - 41,500 41,500
Share option expense 212,575 38,281 127,029
Depreciation 73,892 26,898 76,427
Loss on disposal of fixed assets 241 - -
(Increase)/decrease in debtors (121,511) (427,689) (1,219,408)
Increase/(decrease) in creditors (10,683) 224,876 974,552
Disposal of fixed assets - - 2,689
Net cash outflow from operating (1,559,508) (642,687) (1,652,206)
activities
5. Publication of non-statutory accounts
The financial information set out in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
figures for the year ended 31 March 2006 have been extracted from the Statutory
Financial Statements of Bango plc, which have been filed with the Registrar of
Companies. The auditor's report on those financial statements is unqualified.
The financial information for the six months to 30 September 2006 and the six
months to 30 September 2005 is unaudited.
The interim report together with an analysts briefing presentation will be
distributed to all shareholders shortly and copies will be available from the
Company's website at www.bango.com
This information is provided by RNS
The company news service from the London Stock Exchange
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