Interim Results

Bango PLC 20 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 ending 30th 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, 'Bango has had a much improved six months, achieving increased revenues while simultaneously reducing costs. Bango is in a leading position in the market place and the second half of the year has started well. Transaction growth is moving in the right direction and the momentum should continue. The Company is reducing cash burn to below £100k (pcm) meaning that the transition to a positive cash flow position and profitability is progressing well.' 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 At the end of FY 2007 management committed to grow revenues and increase customer signup rates, while simultaneously reducing operating costs and cutting cash consumption. Bango has successfully delivered against these targets. This has been made possible by improving the operational efficiency of the business and leveraging what are essentially fixed service delivery costs. The average cost of signing up a new customer has reduced during the period and is continuing to reduce as we increasingly develop sales through our web and partner sales model. Concurrently the streamlining of our sales teams has seen a significant 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 recent developments from Yahoo! and Google further adding to the momentum. As a leading facilitator of business over the mobile web Bango is ideally positioned to benefit from the direction the market is taking and we can look forward to the 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 £m Revenue 6.84 2.24 4.60 10.43 Gross profit 1.40 0.08 1.32 2.47 Operating loss before share (0.98) 0.52 (1.50) (3.06) option costs Loss before tax (1.08) 0.54 (1.62) (3.32) Cash outflow from (0.17) 1.39 (1.56) (2.82) operations Cash position 1.82 (1.38) 3.20 1.93 Basic 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, enabling them to become more successful. As expected, this slowed the margin increase in the short term. However, we have seen the expected improvement in margins going forward with the increased rate of sign-up of smaller content providers and anticipate this improvement continuing. In terms of geographical breakdown, growth in revenues outside the UK market was 176% compared with H1 FY07 with the USA and Canada posting 187% growth and the EU posting 213%. Non-UK geographies now represent 28% of total revenues against 15% at the end of H1 FY07. This demonstrates that the market conditions in other territories are beginning to enable sale of content over the mobile web, as they did 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 year as mobile operators have promoted it. Interest has been boosted by mobile web announcements from Yahoo!, Google, Vodafone and Apple during the summer. We have therefore been able to start shifting our marketing efforts from market education to product sale. This enables increased salesperson productivity and plays to the strength of our products and technology. Though still small in absolute terms, the growth in direct sales from our bango.com website has recently accelerated. Google's agreement to offer Bango customers a free 'Adwords package' has enabled smaller customers to experiment with mobile web advertising. Customer base Bango's customers range from the very small to the very large. Many of our most successful customers are those who focus on the emerging opportunities in mobile search. There has been a shift of emphasis towards the small and medium sized customers where sales lead times are shorter, sales costs lower and relationships less expensive to service. Product development The development team has had a very productive period, bringing a number of new products to market while at the same time evolving our existing products to adapt to market needs and changes within the mobile operators. Our emphasis is on developments that simplify and reduce the time taken for content providers to get up and running on the mobile web, and on reducing their costs through the use of Bango technology and our unique industry position. This will enable us to acquire increasing numbers of customers at a lower cost. The Bango website continues to evolve to make it easier for customers to sign up to our services automatically. We have also placed emphasis on introducing simpler and lower cost product offerings that are appealing to content owners with little or no mobile experience. For low usage levels, our basic product enables new entrants to sign up to the service without incurring a fixed monthly cost. 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 an exciting new proposition which has the potential to significantly accelerate the use 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 share their pictures and other content direct to a viewer's mobile phone. Bango technology is now of immediate value beyond our initial market of those content providers that have the ability to build or commission websites. Outlook Bango has had a much improved six months, achieving increased revenues while simultaneously reducing costs. Bango is in a leading position in the market place and the second half of the year has started well. Transaction growth is moving in the right direction and the momentum should continue. The Company is reducing cash burn to below £100k (pcm) meaning that the transition to a positive 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 10,428,312 Cost of sales (5,438,338) (3,280,871) (7,962,403) Gross profit 1,397,428 1,321,955 2,465,909 Administrative 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 89,372 147,284 Finance 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 attributable to the equity holders of the Company Basic 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 £ £ £ ASSETS Non-current assets Property, plant and equipment 402,087 545,230 506,450 Intangible assets 4 18,807 34,450 15,311 420,894 579,680 521,761 Current assets Trade and other receivables 2,394,338 2,388,969 2,423,266 Cash and cash equivalents 1,819,013 3,200,583 1,931,094 4,213,351 5,589,552 4,354,360 Total assets 4,634,245 6,169,232 4,876,121 EQUITY Capital and reserves attributable to equity holders of the Company Share capital 9 5,383,282 5,369,548 5,369,548 Share premium account 5,320,067 5,310,885 5,310,885 Merger reserve 1,236,225 1,236,225 1,236,225 Other reserve 743,152 406,770 595,835 Accumulated losses (11,153,395) (8,379,814) (10,072,270) Total equity 1,529,331 3,943,614 2,440,223 LIABILITIES Current liabilities Trade and other payables 3,104,914 2,225,618 2,435,898 Total liabilities 3,104,914 2,225,618 2,435,898 Total equity and liabilities 4,634,245 6,169,232 4,876,121 CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR SIX MONTHS ENDED 30 SEPTEMBER 2007 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 activities Purchases 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 2,984 Interest received 42,811 89,372 147,284 Net cash generated from/(used by) investing activities 32,055 (221,104) (218,228) Cash flows generated from financing activities Proceeds from other issue of ordinary shares 22,916 118,432 118,433 Net 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) 3,612,606 recognised for the period Exercise of share 62,684 55,749 - - - 118,433 options Share-based payment - - - 212,575 - 212,575 charge 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) 2,251,158 recognised for the period Share-based payment - - - 189,065 - 189,065 charge 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) 1,359,098 recognised for the period Exercise of share 13,734 9,182 - - - 22,916 options Share-based payment - - - 147,317 - 147,317 charge 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 mobile internet. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange ('AiM'). The address of the Company's registered office is 5, Westbrook Centre, Milton Road, Cambridge CB4 1YG. The condensed consolidated interim financial information was approved by the board of directors on (14 November 2007). 2. Basis of preparation The condensed interim financial information for the half year ended 30 September 2007 has been prepared in accordance with IAS 34 'Interim financial reporting'. The interim condensed financial report should be read in conjunction with the annual financial statements for the year ended 31 March 2007. The condensed consolidated financial information has been prepared under the historical cost convention. 3. Principal accounting policies The principal accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2007. 4. Segment information (a) The Group operates in three main business segments. Management reporting is 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 - - 6,835,766 Segment costs 5,207,831 230,507 - 2,521,364 7,959,702 Segment 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 - 4,602,826 Segment costs 3,197,251 83,620 - 3,035,977 6,316,848 Segment 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 - 10,428,312 Segment costs 7,686,510 275,893 - 5,930,299 13,892,702 Segment 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 to equity holders of the Company by the weighted average of ordinary shares in issue 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 73,892 186,847 Net 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) 210,368 Net 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 prices ranging between 29.5 pence and 50 pence for 68,670 shares with a par value of 20 pence. The total proceeds were £22,916 of which £13,734 was recognized as share capital and £9,182 as share premium. On 9 July 2007 15,000 options were granted to employees based in the USA, and on 19 September 2007 233,000 options were granted to employees. No options were granted to Directors during the period. 8. 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 2007 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 2007 and for the six months to 30 September 2006 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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