BANGO PLC

Earnings Release • Jan 21, 2016

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 5175M

Bango PLC

21 January 2016

21 January 2016

BANGO PLC

("Bango")

Trading & Strategy Update

Bango (AIM: BGO), the mobile payments company, provides an update on trading for the twelve months ended 31 December 2015. 

End User Spend

Bango is focussed on increasing End User Spend (EUS) through the Bango Payment Platform, to take advantage of the rapid global growth in digital content and services.  As stated on 14 January 2016, the annualized EUS exit run-rate for 2015 was £67m, representing an increase of over 100% year-on-year and in line with Bango's target. This growth was achieved despite adverse foreign exchange movements during 2015.

Percentage Margin on End User Spend

Towards the end of 2015, Bango experienced faster growth of digital goods sales in more developed markets, leading to a lower annual EUS margin of 1.8%. Percentage margin on EUS varies by operator route, country, app store sales volume and on type of product being sold by the app store. Bango's commercial arrangements with Mobile Network Operators and app stores have not changed and all agreements with different app stores and Mobile Network Operators will continue to contribute towards gross profit. The faster growth in developed markets is stronger than expected, and in part due to deployment of Bango Boost technology. In 2016, Bango expects to see greater contribution from EUS in its newer markets, where smartphone adoption is still increasing.

Note: Percentage margin is the fee charged to Bango customers expressed as a percentage of EUS for processing given transactions.

Platform Fees

Platform Fees for FY2015 are now expected to be £0.5m, compared to £0.7m in FY2014.  This is a direct outcome of Bango's decision going into 2015 to replace upfront platform fees with a recurring fee, removing commercial barriers to integrating to the Bango Payment Platform. Bango's key focus is on growing End User Spend, and this approach has enabled more commercial agreements with major app stores in large markets.

Long-Term Strategy

A tightly controlled fixed cost base, together with a market-leading position, gives Bango confidence in its ability to deliver long-term value for shareholders.  This low fixed cost base allows Bango to process well in excess of ten times current EUS, meaning EUS directly leads Bango towards profitability. The Board also remains of the view that Bango has sufficient cash reserves to:

·   Maintain a strong balance sheet through to and beyond profitability,

·   Sustain sales and marketing to grow its market share, and

·   Invest in research and development to boost the performance of Bango's growing number of billing routes for its customers worldwide.

Outlook

Bango has seen repeated success this year in activating carrier billing routes in high-growth markets, adding significantly to EUS growth and enabling Bango to maintain a market-leading position in a fast-growing industry.  Furthermore, by activating billing routes with global app stores and Mobile Network Operators, Bango believes there is potential to extend its scope of its activities over time.

Bango has a healthy number of activations scheduled for launch in 2016 and the pipeline of further activation opportunities is significantly larger than it was entering 2015.

Bango will announce its Final Results for the twelve months to 31 December 2015 on Tuesday, 15 March 2016.

For further information please contact:

Bango plc
Ray Anderson, CEO	+44 1223 472 777
Gerry Tucker, CFO
Cenkos Securities plc	+44 131 220 6939
Nick Tulloch / Beth McKiernan
FTI Consulting
Chris Lane / Rob Mindell	+44 20 3727 1000

This information is provided by RNS

The company news service from the London Stock Exchange

END

TSTLFFVFLEIIFIR