TIDMBGO
RNS Number : 0909R
Bango PLC
19 September 2017
19 September 2017
BANGO PLC
("Bango")
Interim Results
Bango (AIM: BGO), the mobile payments company, today announces
its unaudited interim results for the six months ended 30 June
2017.
1h2017 Financial highlights
-- 1h2017 End User Spend (EUS) increased 100% YoY to GBP92.31m (1h2016: GBP46.17m)
o Annualized EUS exiting August 2017 was over GBP400m, at least
140% more than the rate entering September 2016 (GBP167m)
-- Revenue from EUS increased 114% YoY to GBP1.65m (1h2016: GBP0.77m)
-- Improved Adjusted LBITDA* -GBP1.01m (1h2016: -GBP1.64m)
-- Operating costs stable at GBP2.72m (1h2016: GBP2.49m) in-line with forecast
-- Cash of GBP5.6m on 30 June 2017 (30 June 2016: GBP7.2m; 31
Dec 2016: GBP5.7m), sufficient to fund the Group through to
profitability
* Adjusted LBITDA is Operating Loss before depreciation,
amortization and share based payments.
1h2017 Operational highlights
-- DCB for Amazon in Japan: Launched Direct Carrier Billing
(DCB) for Amazon in Japan. Customers on the NTT Docomo and KDDI
networks can pay for the full range of physical goods from
amazon.co.jp, charging the cost to their mobile phone bill. The
scale of this launch is unprecedented, enabling DCB for physical
good sales in Amazon's third largest market
-- New billing routes: Activated more Direct Carrier Billing
(DCB) routes in Indonesia, Italy, Austria, Denmark, UK, Hong Kong,
Japan, Verizon in the US, the biggest MNO to launch with Windows
Store and more. Migrated two further Google Play billing routes
from legacy providers to the Bango Platform in Kuwait and
Bahrain
-- Platform capacity: Tested the transaction throughput of the
Bango Platform to volumes over GBP5Bn per year on the existing
infrastructure, as well as the ability to handle large spikes in
transaction volumes, in readiness for the expected growth in
EUS
Delivering on the platform strategy
-- Develop vital technology: Evolved 5(th) generation platform
technology to enable DCB for physical goods, new capabilities
include multiple item checkout, delayed invoicing, part shipments,
partial payments, refunds and chargeback processing
-- Win leaders to the Bango Platform: First Amazon DCB route launched through Bango in Japan, demonstrating that Bango remains the standard platform chosen by leading global stores to deliver innovative mobile payment solutions. The Bango strategy is to focus on the global leaders that have the ability to reach tens of millions of consumers with the Bango Platform, enabling improved user experiences and more efficient marketing for all Bango customers
-- Build momentum and deliver value: Migration of established
Google Play payment routes to the Bango Platform to stimulate
growth. Initial uplift in user spend of 35% experienced
immediately, with over 25% increase in unique users. Award-winning
Bango Boost post-launch technology is applied to all routes to
stimulate further EUS growth
-- Add new capabilities and products: Bango Boost v2 launched,
to provide major developers including Niantic, Supercell and King
with unique insights into consumer behavior. Bango Boost enables
more efficient marketing, boosts EUS growth and improves customer
experience
Ray Anderson, Chief Executive Officer at Bango, commented:
"With a unique, powerful technology platform and winning
strategy to power the world's leading online stores, Bango
continues to gain rapid momentum. The largest internet businesses
are expanding their use of the Bango Platform to reach new
customers and increase the return on their marketing
investments.
Adding to the substantial growth achieved by expanding the reach
of Google Play and Microsoft Windows Store, in June 2017 Bango
technology enabled Amazon to start using carrier billing to collect
payments from consumers buying physical goods in Japan.
New capabilities and unique innovations added to the Bango
Platform over the last few years are now starting to be used to
open similar opportunities worldwide. Bango continues to invest in
the development of its platform to embrace additional routes and
markets and attract further innovation on the Bango Platform.
Merchant partners benefit from fast growth in existing billing
routes, and new payment routes added through the year. New
customers with ambitious growth plans are also coming to the Bango
Platform as a result of business development activity - especially
in the USA and Japan. Bango therefore remains confident of
achieving at least 100% year-on-year growth in End User Spend for
the third consecutive year."
This announcement contains inside information as defined in EU
Regulation No. 596/2014 and is in accordance with the Bango
obligations under Article 17 of that Regulation.
Contact Details:
Bango PLC FTI Consulting Cenkos Securities PLC
Tel. +44 333 077 0247 Tel. +44 203 727 1000 Tel. +44 131 220 6939
Ray Anderson, CEO Matt Dixon Nick Tulloch
Rachel Elias-Jones, CFO Chris Lane Beth McKiernan
Anil Malhotra, CMO Rob Mindell Neil McDonald
About Bango
Bango is the standard platform chosen by leading global stores
to deliver mobile payments to everyone. As the next billion
consumers adopt their first smartphone and look for universal
payment methods, Bango will be there to unlock the world of apps,
video, music, games and other content that brings those smartphones
to life. Global stores plugging into the Bango Platform include
Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG), Samsung (005930:
Korea SE) and Microsoft (NASDAQ: MSFT). Bango also partners with
leading payment providers around the world to drive new users and
revenues through its industry-leading mobile payment solutions. For
more information, visit www.bango.com.
CEO's statement
By combining quick and easy payment collection with unique data
insights that boost marketing performance, the Bango Platform is
the market leader for global app store payments. In June 2017,
Bango broke new ground by enabling carrier billing to be used to
purchase high value physical goods in Japan, one of the most
advanced online economies.
The launch for Amazon, working with Docomo and KDDI, reaches
over 75% of Japanese users through their Android and iPhone
devices. It marks another major milestone for Bango technology,
massively expanding payment choice and convenience for customers.
Although still in its early stages, this is potentially the most
significant application of carrier billing in the history of this
alternative payment method. Bango is developing relationships with
other physical goods retailers to follow this successful
launch.
Japan is a mobile-centric internet culture with billions of
dollars of online purchases transacting on Japanese mobile phones
each year. Through the Bango Platform, online retailers anywhere in
the world are now able to offer their Japanese customers the
convenience of payment to their mobile phones. Online retailers in
Japan are particularly keen to upgrade their legacy
"cash-on-delivery" customers to more efficient online payment
methods, like carrier billing.
In parallel with opening-up payments for physical goods using
the Bango Platform, the expansion of digital services continues,
with many new mobile operators integrating to the Bango Platform,
which increases the billing reach for Google, Samsung and Microsoft
stores.
In January 2017, Bango presented its strategy for enabling the
information gathered by the Bango Platform to be used to improve
marketing and user experience for Bango customers. This strategy
was supported by the launch of Bango Boost v2 in February 2017,
which enables leading merchants such as Niantic, Supercell and King
to gain unique insights to help them optimize their marketing
investments. This new way of monetizing the value of the Bango
Platform presents new opportunities for Bango as End User Spend
continues to grow rapidly.
Market developments
Bango continues to benefit from long-term partnerships with the
world's leading internet companies. Mobile Network Operators and
other billing providers are keen to benefit from the growing
appetite for content and services, and respond to the major players
who are pushing for wider availability of DCB. The Bango footprint
continues to expand and partners have achieved milestones in their
reach: Google announced at their IO conference that 900 Million
Android phones worldwide are now capable of using DCB to pay for
content and services in Google Play (Google I/O 2017) and Microsoft
reported that Windows 10 is now running on 500 million active
devices worldwide (Microsoft Build conference 2017).
The mobile market saw significant growth in usage, downloads and
revenue. Bango is now positioned at the centre of this market
growth, providing unique technology that enables the leaders to
consolidate around a common platform for mobile payments. Bango has
created a true commerce platform by adding value with every
interaction, which speeds deployment, lowers costs and enables
improved marketing efficiencies and better user experiences.
Proof that Bango provides more value than payment processing is
provided when mobile operators switch their existing integrations
over to the Bango Platform. In the first half of 2017 two operators
in the Middle East decided to switch their Google Play routes to
the Bango Platform from third party providers to stimulate growth.
Their Android business is now benefiting from the tools and data
that Bango uniquely provides. Initial uplift in user spend of 35%
was gained immediately, with over 25% increase in unique users.
Bango Boost v2 will in turn enable app developers to strengthen
their business with these two operators by using the benchmarking
and data insights that only Bango can provide.
Product development
Product development is focused in three key areas: improving
performance and reliability, adding new platform capabilities for
existing customers and extracting more value for customers from the
data collected by the Bango Platform as it processes
transactions.
Software engineering work continues to speed up transaction
processing, and improve reliability and resilience through
innovations in the use of database and API technology. This work
enabled Bango datacenters to process transactions at a sustained
rate of over GBP5Bn/yr during stress testing prior to the launch of
physical goods capabilities in Japan.
New platform capabilities added during 2015 and 2016 to handle
the sophistication of physical goods delivery - where payment might
be collected when the goods are shipped - were extensively tested
during the first half of 2017 and new APIs published to merchants
to support these capabilities.
Additional capabilities were added to the Bango Platform during
the first half to enable expansion of payment capabilities into the
Internet of Things (IoT). As presented in the Bango Strategy update
in January 2017, Bango technology extends beyond smartphones and
other consumer devices, by enabling transactions between smart
devices, buildings, security and transportation systems.
In the big data and analytics space, Bango released Bango Boost
v2. Five of the top 10 Google Play developers have been provided
access to valuable data through a new variant of the Bango
Dashboard. Bango expects this data will be valuable to these and
many other developers, but the benefits to mobile operators who use
Bango data to deliver efficient and collaborative marketing
programs are potentially profound. This could drive mobile
operators to migrate their legacy connections to the Bango Platform
more quickly.
Bango continues to invest in the next generation of platform
capabilities, following the lead of the world's biggest stores who
repeatedly chose Bango to partner with to monetize new products and
add new customers.
Sales and Marketing
In early 2016 Bango announced that it had established Bango KK,
led by an experienced Japanese executive to steer Bango activity in
Japan. Following the mid-2017 launch of DCB for Amazon Japan, Bango
plans to increase its activity in Japan and build Bango
capabilities in adjacent countries with similar mobile-centric
consumer cultures.
Bango identified Latin America (LATAM) as a key opportunity in
late 2016, and has expanded its presence in the region with local
employees in Sao Paolo, Brazil and recently in Bogota, Colombia.
There is a significant transition away from first generation mobile
content to app stores and digital merchants, and with comparatively
low credit card usage, the region presents a major opportunity for
Bango and our global partners to open-up online payments.
The Sales and Marketing team at Bango is developing
relationships with several new global merchants and expects to
drive significant new revenue streams from these new customers,
using the same established technology and capabilities of the Bango
Platform.
Outlook
Bango has executed very well in the first half, delivering
against its strategy. Bango added new customers and partnerships to
its powerful network. Product innovation expanded to include
payments for physical goods and new capabilities that can support
IoT payments, Bango is delighted that trials of its technology are
already underway and announcements in the IoT space are expected in
the coming months.
With the strengthening of the capacity and reliability of the
Bango Platform, Bango is comfortable that it can handle the
substantial increase in End User Spend that is anticipated in the
coming year.
As a result, Bango expects EUS growth to increase in the second
half and with further substantial growth in the years to come.
Considerable increases in revenue and a stable cost base have
led to a healthy cash balance that management continues to expect
will see Bango through to profitability.
Ray Anderson
Chief Executive Officer
CFO's statement
Bango business model
Bango earns revenue from every transaction processed through the
Bango Platform. Revenue is calculated either as a percentage of the
sale value or as a fixed fee per transaction. Each additional sale
adds to the End User Spend (EUS) of the business and this leads to
increased revenue.
End User Spend
EUS is the total sales processed through the Bango Platform
excluding taxes. EUS shows the growth of business through the Bango
Platform, and remains the most significant Key Performance
Indicator that management uses to measure the development of the
business and the continued success of Bango customers and
partners.
EUS for 1h2017 was GBP92.31m, up 100% from 1h2016 (GBP46.17m)
due to growth from existing activations and additional EUS from new
activations in 2017. During 1h2017, as part of streamlining
acquired BilltoMobile routes, those with low growth potential or
continued strategic value were deactivated. The Bango strategy
remains to focus on the global leaders who have the ability to
scale at low cost to Bango and bring noticeable EUS and revenue to
Bango in 2018 and beyond.
At the end of June 2017, the EUS run rate was over GBP300m/yr
(1h2016: GBP159m/yr). Exiting August 2017 it had grown to over
GBP400m/yr. Growth in annualized EUS came from all of the major
stores integrated to the Bango Platform. Bango is on track to
generate monthly revenue from EUS fees in excess of costs -
generating a monthly operating profit at the end of 2017.
Revenue
Bango has two revenue streams, which it reports separately.
Firstly, revenue from transaction fees from EUS, secondly, revenue
from platform fees paid by stores for new payment route
activations.
Revenue from EUS increased to GBP1.65m from GBP0.77m in 1h2016,
an increase of 114%, reflecting the doubling of EUS from 1h2016.
The significant EUS growth is reflected in the continued increase
in revenue.
Revenue from platform fees are one time fees charged to MNOs or
stores for integrations or customized development work. The
platform fees in 1h2017 were GBP0.06m, consistent with GBP0.08m in
1h2016. Platform fees are additional sources of revenue but longer
term plans are based on the operational costs of Bango being
covered by the revenue from the EUS.
EUS revenue expressed as a % of EUS was 1.79% (1h2016: 1.67%).
Bango expects that total EUS revenue expressed as a % of EUS for
FY2017 will be in-line with market forecasts going forward.
Costs
The cost base of GBP2.72m for the first half of 2017 (1h2016:
GBP2.49m) remains in-line with forecasts. Bango expects to exit the
year with little or no rise in operational costs, in-line with
market expectations. Cost savings from operational efficiencies
achieved in 1h2017 have been redeployed into growing Bango's
presence in LATAM and increased sales and marketing activity in
Asia. Bango continues to invest in market opportunities and product
innovation.
The Bango Platform has been tested to a capacity in excess of
GBP5bn of EUS per year, consistent with prior year developments.
This ensures sufficient platform capacity to handle sudden surges
in EUS and the ambitions of Bango's partners. The ability of the
platform to handle large spikes in transaction volume is of
particular importance following the launch of payment capabilities
for physical goods. The scalability of the Bango Platform has been
achieved as a result of investment in technological innovations as
part of continued commitment to new Research and Development
(R&D) projects. In-line with the Bango strategy to ensure the
platform is highly scalable, Bango continues to invest in new
R&D projects so the Bango Platform can support new market
opportunities identified by key customers.
LBITDA, adjusted to account for share based payments for the
period ended 30 June 2017, has shown significant improvements with
a reduction of nearly 40% to -GBP1.01m (1h2016: -GBP1.64m) as a
result of growing revenue from EUS on a stable cost base.
Depreciation and amortization for 1h2017 decreased to GBP0.69m
(1h2016: GBP0.81m) due to a number of assets becoming fully
depreciated in the period. Share based payment charge increased
during 1h2017 to GBP0.33m (1h2016: GBP0.22m) as a result of
increases to the Bango share price. The share based payment charge
relates to the Bango share option program which enables all Bango
employees to share in the future value of Bango, which is a vital
recruitment and retention tool in a highly competitive employment
market.
Loss and Loss per share
The loss after tax was -GBP1.75m (1h2016: -GBP2.66m) an
improvement driven by the GBP0.86m increase in revenue compared to
1h2016.
Loss per share decreased to 2.67p (1h2016: 4.12p).
Cash
Cash balances remained stable at GBP5.6m on 30 June 2017 with
the 31 December 2016 value of GBP5.7m (GBP7.24m on 30 June
2016).
The stability of the Bango cash position was a result of
improvements to the operating cash flow of GBP0.2m (1h2016:
-GBP1.75m) in the half year, the receipt of GBP0.4m from HMRC for
R&D tax credits and GBP0.5m from the exercise of share options.
This strong cash position reaffirms the management expectations
that Bango has sufficient cash to fund it through to net
profitability, while continuing to invest in R&D.
Rachel Elias-Jones
Chief Financial Officer
Consolidated statement of comprehensive income
for the six months ended 30 June 2017
Note
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
Unaudited Unaudited Audited
GBP GBP GBP
Alternative performance measure
(Non-IFRS)
-------------------------------------- ---- -------------- -------------- ------------
End User Spend 92,311,982 46,167,918 132,290,981
-------------------------------------- ---- -------------- -------------- ------------
Revenue 1,715,153 853,804 2,624,187
Cost of sales - payment providers (4,046) (5,499) (7,054)
Gross profit 1,711,107 848,305 2,617,133
Other administrative expenses (2,716,744) (2,492,292) (5,039,873)
Share based payments (325,000) (216,000) (359,373)
Depreciation (93,600) (169,780) (319,284)
Amortization (601,773) (644,160) (1,150,822)
Non-recurring items - acquisition
of BilltoMobile Inc - (152,478) (376,013)
-------------- -------------- ------------
Total administrative expenses (3,737,117) (3,674,710) (7,245,365)
Operating Loss (2,026,010) (2,826,405) (4,628,232)
Interest payable (22,320) (7,613) (53,661)
Investment income 15,204 18,141 30,363
Loss before taxation (2,033,126) (2,815,877) (4,651,530)
Income tax 285,670 159,009 238,413
Loss for the financial year (1,747,456) (2,656,868) (4,413,117)
Other comprehensive income
Foreign exchange on consolidation (27,491) - 135,187
Loss and total comprehensive loss
for the
============== ============== ============
period attributable to equity holders
of Bango PLC (1,774,947) (2,656,868) (4,277,930)
============== ============== ============
Loss per share attributable
to the equity holders of Bango
PLC
Basic loss per share 5 (2.67)p (4.12)p (6.79)p
Diluted loss per share 5 (2.67)p (4.12)p (6.79)p
All of the activities of the group are classified as
continuing.
Notes 1 to 9 are an integral part of the consolidated financial
statements.
Consolidated statement of financial position
for the six months ended 30 June 2017
As at: 31 December
30 June 2017 30 June 2016 2016
Unaudited Unaudited Audited
Note GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 294,076 391,182 294,565
Intangible assets 8 6,232,602 5,886,774 6,017,061
------------
6,526,678 6,277,956 6,311,626
Current assets
Trade and other receivables 2,218,262 1,521,491 1,821,796
Research and development
tax credits 213,883 384,983 318,857
Cash and cash equivalents 5,555,575 7,239,900 5,696,517
-------------- -------------- ------------
7,987,720 9,146,374 7,837,170
-------------- -------------- ------------
Total assets 14,514,398 15,424,330 14,148,796
-------------- -------------- ------------
EQUITY
Capital and reserves attributable
to equity holders of Bango
PLC
Share capital 13,154,125 13,003,569 13,029,124
Share premium account 30,692,789 30,262,948 30,323,341
Merger reserve 1,236,225 1,236,225 1,236,225
Other reserve 2,536,136 2,112,842 2,211,136
Foreign exchange revaluation
reserve 107,696 83,056 135,187
Accumulated losses (36,326,581) (32,867,955) (34,579,125)
-------------- -------------- ------------
Total equity 11,400,390 13,830,685 12,355,888
-------------- -------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 3,075,620 1,394,713 1,697,354
Finance lease liabilities 38,388 160,554 82,149
3,114,008 1,555,267 1,779,503
Non-current liabilities
Finance lease liabilities - 38,378 13,405
---------- ---------- ----------
- 38,378 13,405
---------- ---------- ----------
Total liabilities 3,114,008 1,593,645 1,792,908
---------- ---------- ----------
TOTAL EQUITY AND LIABILITIES 14,514,398 15,424,330 14,148,796
---------- ---------- ----------
Notes 1 to 9 are an integral part of the consolidated financial
statements.
Consolidated cash flow Statement
for the six months ended 30 June 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
Note GBP GBP GBP
Net cash used by operating activities 6 196,943 (1,752,474) (2,646,857)
Cash flows used by investing activities
Purchases of property, plant and
equipment (93,111) (53,667) (106,554)
Addition to intangible assets (739,530) (2,925,110) (3,425,134)
Interest received 15,204 18,141 30,363
------------ ------------ -------------
Net cash used by investing activities (817,437) (2,960,636) (3,501,325)
Cash flows generated from financing
activities
Proceeds from issuance of ordinary
shares 494,449 - 85,948
Costs associated with issuance of
ordinary shares - - (2,668)
Interest payable (22,320) (7,613) (53,661)
Capital payable on finance lease
obligations (57,167) (165,087) (268,466)
------------ ------------ -------------
Net cash (used)/generated from financing
activities 414,962 (172,700) (238,847)
Net (decrease)/increase in cash
and cash equivalents (205,532) (4,885,810) (6,387,029)
Cash and cash equivalents at beginning
of period 5,696,517 12,135,326 12,135,326
Exchange differences on cash and
cash equivalents 64,590 (9,616) (51,780)
------------ ------------ -------------
5,761,107 12,125,710 12,083,546
Cash and cash equivalents at end
of period 5,555,575 7,239,900 5,696,517
------------ ------------ -------------
Notes 1 to 9 are an integral part of the consolidated financial
statements.
Consolidated statement of changes in equity
for the six months ended 30 June 2017
Share Share Merger Other Foreign Retained Total
capital premium reserve reserve exchange earnings
account reserve
GBP GBP GBP GBP GBP GBP GBP
Balance at 1 January
2016 12,886,350 30,101,510 1,236,225 1,896,842 - (30,211,087) 15,909,840
Share based payments - - - 216,000 - - 216,000
Issue of new shares 117,219 161,438 - - - - 278,657
----------- ----------- ---------- ---------- ---------- ------------- ------------
Transactions with
owners 117,219 161,438 - 216,000 - - 494,657
----------- ----------- ---------- ---------- ---------- ------------- ------------
Loss for the period - - - - 83,056 (2,656,868) (2,573,812)
----------- ----------- ---------- ---------- ---------- ------------- ------------
Total comprehensive
income for the
period - - - - 83,056 (2,656,868) (2,573,812)
----------- ----------- ---------- ---------- ---------- ------------- ------------
Balance at 30
June 2016 13,003,569 30,262,948 1,236,225 2,112,842 83,056 (32,867,955) 13,830,685
=========== =========== ========== ========== ========== ============= ============
Balance at 1 January
2016 12,886,350 30,101,510 1,236,225 1,896,842 - (30,211,087) 15,909,840
Share based payments - - - 359,373 - - 359,373
Share based payments
transfer for exercised
share options - - - (45,079) - 45,079 -
Exercise of share
options 25,555 60,393 - - - - 85,948
Issue of new shares 117,219 164,106 - - - - 281,325
Expense of share
issue - (2,668) - - - - (2,668)
Transactions with
owners 142,774 221,831 - 314,294 - 45,079 723,978
----------- ----------- ---------- ---------- -------- ------------- ------------
Loss for the year - - - - - (4,413,117) (4,413,117)
Other Comprehensive
Income
Foreign exchange
on consolidation - - - - 135,187 - 135,187
----------- ----------- ---------- ---------- -------- ------------- ------------
Total comprehensive
income for the
period - - - - 135,187 (4,413,117) (4,277,930)
----------- ----------- ---------- ---------- -------- ------------- ------------
Balance at 31
December 2016 13,029,124 30,323,341 1,236,225 2,211,136 135,187 (34,579,125) 12,355,888
=========== =========== ========== ========== ======== ============= ============
Balance at 1 January
2017 13,029,124 30,323,341 1,236,225 2,211,136 135,187 (34,579,125) 12,355,888
Share based payments - - - 325,000 - - 325,000
Exercise of share
options 125,001 369,448 - - - - 494,449
----------- ----------- ---------- ---------- --------- ------------- ------------
Transactions with
owners 125,001 369,448 - 325,000 - - 819,449
----------- ----------- ---------- ---------- --------- ------------- ------------
Loss for the period - - - - (27,491) (1,747,456) (1,774,947)
----------- ----------- ---------- ---------- --------- ------------- ------------
Total comprehensive
income for the
period - - - - (27,491) (1,747,456) (1,774,947)
----------- ----------- ---------- ---------- --------- ------------- ------------
Balance at 30
June 2017 13,154,125 30,692,789 1,236,225 2,536,136 107,696 (36,326,581) 11,400,390
=========== =========== ========== ========== ========= ============= ============
Notes 1 to 9 are an integral part of the consolidated financial
statements.
1. General information
Bango PLC ("Bango"), a United Kingdom resident, and its
subsidiaries (together "the Group") provide services to facilitate
activity on the mobile internet. Bango shares are AIM listed on the
London Stock Exchange. The address of Bango's registered office and
principal place of business is 5, Westbrook Centre, Cambridge CB4
1YG.
The interim financial statements have been approved for issue by
the Board of Directors on 19 September 2017.
2. Basis of preparation
The condensed interim financial information for the half year
ended 30 June 2017 has been prepared using the recognition and
measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations
adopted for use in the European Union (collectively EU IFRS). They
do not include all of the information required in the annual
financial statements in accordance with IFRS, and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2016.
The consolidated interim financial information has been prepared
under the historical cost convention.
The cash flow forecasts of Bango anticipate increased cash
generation from trading operations, therefore the Directors have a
reasonable expectation that there are adequate resources to
continue its operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements.
3. Principal accounting policies
The principal accounting policies adopted are consistent with
those of the annual financial statements for the year ended 31
December 2016.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
condensed consolidated interim financial statements.
4. Segment reporting
(a) End User Spend
Bango has identified End User Spend a non IFRS alternative
performance measure as its Key Performance Indicator on which all
management decisions surrounding investment in the platform and
development of intangible assets is based. Key business decisions
are based on the total value and volume of transactions that Bango
has processed in each month through its payment platform. End User
Spend is the total value of a sale net of VAT or other sales taxes
and converted using the exchange rate at the point of the sale.
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
Unaudited Unaudited Audited
GBP GBP GBP
End User Spend 92,311,982 46,167,918 132,290,981
(b) Revenue and gross profit
Bango, based on the information reviewed by the management team,
has identified two operating segments. Management reporting is
based on the gross profit generated from each segment. The segments
are not separately managed and therefore Bango's headquarters and
its research and development activity are considered Group
operations and are not allocated to any operating segment. Segment
information can be analyzed as follows for the reporting periods
under review.
Six months ended 30 June 2017
End user Group Total
activity Platform
Fees
GBP GBP GBP GBP
Segment revenue 1,653,186 61,967 - 1,715,153
Cost of sales (4,046) - - (4,046)
--------- ---------- ----------- -----------
Segment gross profit 1,649,140 61,967 - 1,711,107
--------- ---------- ----------- -----------
Administrative expenses - - (2,716,744) (2,716,744)
Share based payments charge - - (325,000) (325,000)
Depreciation - - (93,600) (93,600)
Amortization - - (601,773) (601,773)
Interest payable - - (22,320) (22,320)
Interest income - - 15,204 15,204
Segment net profit / (loss) 1,649,140 61,967 (3,744,233) (2,033,126)
--------- ---------- ----------- -----------
Segment assets 1,460,684 69,334 12,984,380 14,514,398
Segment liabilities (485,367) - (2,628,641) (3,114,008)
--------- ------ ----------- -----------
Net assets 975,317 69,334 10,355,739 11,400,390
--------- ------ ----------- -----------
Six months ended 30 June 2016
End user Group Total
activity Platform
Fees
GBP GBP GBP GBP
Segment revenue 774,649 79,155 - 853,804
Cost of sales (5,499) - - (5,499)
--------- ---------- ----- -------
Segment gross profit 769,150 79,155 - 848,305
--------- ---------- ----- -------
Administrative expenses - - (2,492,292) (2,492,292)
Share based payments charge - - (216,000) (216,000)
Depreciation - - (169,780) (169,780)
Amortization - - (644,160) (644,160)
Interest payable - - (7,613) (7,613)
Interest income - - 18,141 18,141
Non-recurring items - - (152,478) (152,478)
--------- ------ ----------- -----------
Segment net profit / (loss) 769,150 79,155 (3,664,182) (2,815,877)
--------- ------ ----------- -----------
Segment assets 547,254 30,097 14,846,979 15,424,330
Segment liabilities (361,671) - (1,231,974) (1,593,645)
--------- ------ ----------- -----------
Net assets 185,583 30,097 13,615,005 13,830,685
--------- ------ ----------- -----------
Year ended 31 December 2016
End user Group Total
activity Platform
Fees
GBP GBP GBP GBP
Segment revenue 2,410,871 213,316 - 2,624,187
Cost of sales (7,054) - - (7,054))
--------- ---------- ----------- -----------
Segment gross profit 2,403,817 213,316 - 2,617,133
--------- ---------- ----------- -----------
Administrative expenses - - (5,039,873) (5,039,873)
Non-recurring items - - (376,013) (376,013)
Share based payments charge - - (359,373) (359,373)
Depreciation - - (319,284) (319,284)
Amortization - - (1,150,822) (1,150,822)
Interest payable - - (53,661) (53,661)
Interest income - - 30,363 30,363
--------- ---------- ----------- -----------
Segment net profit / (loss) 2,403,817 213,316 (7,268,663) (4,651,530)
--------- ---------- ----------- -----------
Segment assets 434,365 125,859 13,588,572 14,148,796
Segment liabilities (357,920) - (1,434,988) (1,792,908)
--------- ------- ----------- -----------
Net assets 76,445 125,859 12,153,584 12,355,888
--------- ------- ----------- -----------
End User Spend revenue is the Bango revenue share for processing
transactions through the Bango Platform. Bango earns revenue
calculated either as a percentage of the net of tax figure or as a
fixed value per transaction. Assets for this segment are amounts
due from payment providers. Liabilities for this segment are mainly
fees payable to payment providers for provision of services and
fees payable to merchants for provision of content sold by Bango to
end users.
Platform fees are the amounts paid to Bango by merchants for
providing services or for operator activations. Assets for this
segment are amounts due to Bango for providing these services.
Liabilities for this segment represent deferred income for prepaid
fees. Group assets include non-current assets and cash and cash
equivalents. Group liabilities relate to administrative
expenses.
c) The Group's revenue from external customers is divided into
the following geographical areas:
Six months ended 30 June 2017
United Kingdom Rest of USA and Rest of Total
EU Canada World
GBP GBP GBP GBP GBP
Revenue 12,934 25,202 1,075,398 601,619 1,715,153
Six months ended 30 June 2016
United Kingdom Rest of USA and Rest of Total
EU Canada World
GBP GBP GBP GBP GBP
Revenue 1,834 37,344 317,329 497,297 853,804
Year ended 31 December 2016
United Kingdom Rest of USA and Rest of Total
EU Canada World
GBP GBP GBP GBP GBP
Revenue 12,653 47,857 1,745,150 818,527 2,624,187
Revenue is reported based on the location of the customers. All
non-current assets are based in the UK.
5. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of Bango PLC by the weighted average
of ordinary shares in issue during the period.
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP GBP GBP
Loss attributable to equity holders
of Bango PLC (1,747,456) (2,658,868) (4,413,117)
Weighted average number of ordinary
shares in issue 65,343,621 64,599,207 65,026,008
Basic loss per share (2.67)p (4.12)p (6.79)p
----------- ----------- ------------
Diluted loss per share (2.67)p (4.12)p (6.79)p
----------- ----------- ------------
At 30 June 2017 options over 4,086,922 (30 June 2016: 4,027,604)
ordinary shares were outstanding. Given the loss for the year,
these options are considered to be anti-dilutive. Such options
could potentially dilute basic loss per share in the future.
6. Cash used by operations
Six months Six months Year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
Unaudited Unaudited Audited
GBP GBP GBP
Loss for the financial period (1,747,456) (2,656,868) (4,413,117)
Depreciation & amortization 695,373 813,940 1,455,293
Revaluation of assets - (159,213) -
Taxation in income statement (285,670) (159,009) (238,413)
Investment income (15,204) (18,141) (30,363)
Interest payable 22,320 7,613 53,661
Foreign exchange movement (64,590) 9,616 51,780
Share-based payment expense 325,000 216,000 359,373
Increase/(Decrease) in receivables 129,132 (551,604) (595,427)
Increase in payables 994,530 224,470 442,220
Non-cash issue of shares - 278,657 -
Foreign exchange revaluation - 83,056 -
Realized currency translation (142,162) - 29,723
(88,727) (1,911,483) (2,885,270)
Corporation tax rebate 285,670 159,009 238,413
-------------- -------------- ------------
Net cash used by operations 196,943 (1,752,474) (2,646,857)
-------------- -------------- ------------
7. Share capital
During the period 625,008 share options over 625,008 ordinary
shares were exercised at exercise prices ranging between 88.0p
pence and 176.0 pence with a par value of 20 pence. The total
proceeds were GBP494,449 of which GBP125,001 was recognized as
share capital and GBP369,448 as share premium.
During the period 614,500 options were granted to employees, of
which includes; 50,000 to Rachel Elias-Jones, 50,000 to Ray
Anderson and 50,000 to Anil Malhotra, all Directors. Grants to
employees who left in the period resulted in lapses of 234,345
options in the six months to June 2017.
At the end of the six month period ended 4,086,922 (30 June
2016: 4,080,571) share options were outstanding.
8. Intangible Assets
Domain Internal Acquired Goodwill Total
Names Development intangibles
GBP GBP GBP GBP GBP
Cost
At 1 January
2017 32,887 7,406,361 1,347,407 1,200,000 9,986,655
Additions - 739,530 - - 739,530
Foreign exchange
revaluation - - 41,148 36,636 77,784
At 30 June 2017 32,887 8,145,891 1,388,555 1,236,636 10,803,969
Amortization
At 1 January
2017 32,887 3,768,281 168,426 - 3,969,594
Charge for period - 475,455 126,318 - 601,773
At 30 June 2017 32,887 4,243,736 294,744 - 4,571,367
======= ============= ============= ========== ===========
Net book value
at 30 June 2017 - 3,902,155 1,093,811 1,236,636 6,232,602
======= ============= ============= ========== ===========
Domain Internal Acquired Goodwill Total
Names Development intangibles
GBP GBP GBP GBP GBP
Cost
At 1 January
2016 32,887 6,247,309 - - 6,280,196
Additions - 536,915 - - 536,915
Additions - - 1,263,194 1,125,000 2,388,194
Foreign exchange
revaluation - - 84,213 75,000 159,213
At 30 June 2016 32,887 6,784,224 1,347,407 1,200,000 9,364,518
Amortization
At 1 January
2016 32,887 2,800,697 - - 2,833,584
Charge for period - 602,054 42,106 - 644,160
At 30 June 2016 32,887 3,402,751 42,106 - 3,477,744
======= ============= ============= ========== ==========
Net book value
at 30 June 2016 - 3,381,473 1,305,301 1,200,000 5,886,774
======= ============= ============= ========== ==========
Domain Internal Acquired Goodwill Total
Names Development intangibles
GBP GBP GBP GBP GBP
Cost
At 1 January
2016 32,887 6,247,309 - - 6,280,196
Additions - 1,159,052 1,263,194 1,125,000 3,547,246
Foreign exchange
revaluation - - 84,213 75,000 159,213
At 31 December
2016 32,887 7,406,361 1,347,407 1,200,000 9,986,655
Amortization
At 1 January
2016 32,887 2,800,697 - - 2,833,584
Charge for period - 967,584 168,426 - 1,136,010
At 31 December
2016 32,887 3,768,281 168,426 - 3,969,594
======= ============= ============= ========== ==========
Net book value
at 31 December
2016 - 3,638,080 1,178,981 1,200,000 6,017,061
======= ============= ============= ========== ==========
9. Publication of non-statutory accounts
The condensed consolidated interim financial information was
approved by The Board of Directors on 19th September 2017. They are
unaudited but have been reviewed by the auditors and their report
is included within this note.
The financial information set out in this interim report does
not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The figures for the period ended 31 December
2016 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
and did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006. The interim financial information for the
six months to 30 June 2017 is unaudited. The interim report
together with an analyst briefing presentation will be distributed
to all shareholders shortly and will be available on the Bango
investor site at www.bangoinvestor.com.
Independent review report to Bango PLC
Introduction
We have been engaged by Bango PLC to review the financial
information in the half-yearly financial report for the six months
ended 30 June 2017 which comprises the Consolidated Statement of
Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash
Flow Statement, Consolidated Statement of Changes in Equity and the
related notes (1 to 9). We have read the other information
contained in the half yearly financial report which comprises only
the financial, operational and post period highlights, CEO and CFO
reports, and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to Bango PLC in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to Bango PLC those matters we are required to state to
them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than Bango PLC, for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules of the London
Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly financial report are consistent with those which will
be adopted in the annual accounts having regard to the accounting
standards applicable for such accounts.
As disclosed in Note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial information in the half-yearly
financial report has been prepared in accordance with the basis of
preparation in Note 2.
Our responsibility
Our responsibility is to express to Bango PLC a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 June 2017
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
GRANT THORNTON UK LLP
Chartered Accountants
Auditor
Cambridge
19 September 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFERARITLID
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September 19, 2017 02:00 ET (06:00 GMT)
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