TIDMBGO
RNS Number : 0446B
Bango PLC
18 September 2018
18 September 2018
BANGO PLC
("Bango")
Interim Results
Bango (AIM: BGO), the mobile commerce company, today announces
its unaudited interim results for the six months ended 30 June
2018.
1h2018 Financial highlights
-- End User Spend (EUS) increased 138% YoY to GBP220m (1h2017: GBP92m)
-- Total revenues increased 54% YoY to GBP2.63m (1h2017: GBP1.72m)
-- Payments business EBITDA positive
-- Group Adjusted LBITDA* -GBP0.90m including Audiens
(1h2017: -GBP1.01m ex Audiens)
-- Operating costs GBP3.30m in-line with forecast (1h2017:
GBP2.72m) including increased product development and targeted
investment in data business
-- Cash GBP5.88m at 30 June 2018 (30 June 2017: GBP5.56m; 31 Dec
2017: GBP4.85m) Expected to fund the Group through to profitability
and cash generation. Cash sufficient to support both planned
investment to grow sales and develop new products
* Adjusted LBITDA is Operating Loss before depreciation,
amortization and share based payments.
1h2018 Operational highlights
-- Expanded the use of billing integration technology, enabling
customers to sign-up for Amazon Prime Video in the USA, UK and
India
-- Pandora, a leading music streaming service, chose the Bango
Platform for mobile operator launch in USA.
-- Additional Google Play routes in Africa and South America.
The deal pipeline with mobile operators to upgrade to the Bango
platform now covers EUS well in excess of $4Bn/yr and proposals are
progressing well
-- Expanded team in Japan and Korea. Support for Google Play
developers using the Bango Platform to increase marketing activity
with mobile operators.
-- Acquired Audiens SRL in January 2018, backed by GBP5.02m
placing with existing Bango shareholders. Acquisition adds IP,
expertise, commercial agreements to accelerate Bango data
monetization capability by 12 months, and adds new revenue
streams.
Delivering the Bango Platform strategy
Bango has created a unique and powerful platform that enables
merchants and payment providers to collaborate and thrive. Leading
merchants including Amazon, Microsoft, Google and Samsung use the
Bango Platform to collect payments from tens of millions of
customers and gain increased marketing effectiveness and reach from
data that only Bango can provide.
The Payments business is operating profitably, has high
operating margins and a stable cost base as transaction volumes
grow rapidly, driving success for Bango and its customers. New
merchants, new carrier billing and wallet routes, enhanced through
Bango Boost technology, continue to drive EUS growth at a rapid
pace.
By using the Bango Platform merchants benefit from the extensive
consumer data provided by mobile operators together with payment
data from hundreds of millions of transactions. Mobile operators
can now partner with the leading developers in ways that were
impossible before Bango, to open up new revenue sources and grow
their carrier billing activities faster. The addition of new Bango
Audiens technology will accelerate the growth of this new revenue
stream.
The investment in enabling data monetization for Bango customers
opens up new revenue streams that are expected to be substantial in
the coming years and drive additional profitable EUS growth through
the Bango Platform.
Ray Anderson, Chief Executive Officer at Bango, commented:
"The Bango Payments business reached positive EBITDA at the end
of 2017, and new customers and routes launched in the first half of
2018 are driving profitability further.
I was delighted with the support Bango received in acquiring
Audiens in January 2018. The technical and commercial integration
is proceeding rapidly, with clear synergies opening up a new
data-derived revenue stream at a faster pace than originally
planned.
Mobile operators around the world are seeing the substantial
additional profit they can make by working with Bango. An
increasing number are expected to upgrade to Bango in the coming
months."
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 Beth McKiernan
Rachel Elias-Jones, CFO Rob Mindell Neil McDonald
Anil Malhotra, CMO Peter Lynch
About Bango
Merchants, app store and payment providers cross the threshold
into the Bango ecosystem to converge, grow and thrive.
By bringing businesses together and powering e-commence with
unique data-driven insights, Bango delivers new business
opportunities and new dimensions of growth for customers around the
world. Being inside the Bango circle means global merchants
including Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG) and
Microsoft (NASDAQ: MSFT) can work together with payment partners
from Africa to the Americas, accelerating the performance of
everyone on the inside.
Bango. Think inside the circle. For more information, visit
www.bango.com.
CEO's statement
Worldwide there are 4 billion smartphone users. They can play
music, movies, games, order and pay for transportation and access a
vast array of other services.
Merchants and services providers, and the stores through which
they sell their products, are focused on acquiring new customers
and collecting payments from them for valuable services.
The Bango platform was created to enable merchants and payment
providers to work together to collect payments and to benefit from
the valuable data resulting from these transactions and available
from the payment providers.
Major global businesses are now relying on Bango to achieve
their goals. They add more paying customers, generate better
results from their marketing campaigns, and partner with each other
through the unique market nexus that Bango provides.
The Bango Platform - powering synergistic payment and data
business - continues to gain momentum. It uniquely enables
merchants and payment providers to cluster, collaborate and
thrive.
Payments business and EUS growth
The payments business is growing rapidly and expected to
continue to grow rapidly. More merchants are using the platform to
collect payments and more payment providers are integrating with
the Bango platform to provide payment services.
End User Spend (EUS) continued its four-year growth trend of at
least doubling every twelve months and this growth momentum is
expected to continue. In 1h2018 a range of new content and services
were launched using the Bango Platform with many new payment routes
added to reach hundreds of millions of new users for Bango
merchants.
Bango expanded the use of its billing integration technology,
enabling customers to sign-up for Amazon Prime Video in the USA, UK
and India through leading mobile operators. Using Bango's billing
integration technology, qualifying customers have the opportunity
to subscribe to Prime Video as part of the customer's mobile
plan.
Launches in the USA and the UK follows Bango's initial launch
with Amazon in India for Bharti Airtel, India's largest mobile
network operator. Bango technology ensures that entitled mobile
customers receive uninterrupted access to Amazon Prime Video from
the moment they become active, for as long as they continue to
subscribe and pay their mobile bills.
Pandora, a top three US music streaming service chose the Bango
Platform for a major mobile operator launch in the United
States.
Significant new launches in Latin America and Africa with Google
Play will also drive EUS and revenue growth going forward.
Bango Boost continues to provide valuable insights to mobile
operators and App Stores that use the Bango Platform.
With a stable cost base, meaning no additional cost for
additional payment processing, the increasing EUS through the Bango
Platform and increasing revenues are driving the move towards
profitability for Bango.
Current systems have been tested to transaction volumes
equivalent to EUS in excess of GBP5Bn/year. With EUS levels in the
sales pipeline for upgrades from direct connections equivalent to
more than $4Bn/year, software development is underway to ensure
substantial additional capacity is available in 2019 and 2020
without additional operating costs.
Data business
The data gathered from processing payments and attempted
payments across hundreds of millions of transactions combined with
the unique consumer data available to mobile operators that provide
direct carrier billing services have huge potential value, provided
they can be used in a safe, secure and acceptable way by market
participants.
The acquisition of Audiens SRL in January 2018 brought forward
the launch of this business by around 12 months, and it is now
broken out as a separate line of business within Bango.
The data gathered by the Bango Platform can provide improved
user experiences, more effective marketing and more profitable
business for merchants and mobile operators.
A simple example is where Bango provides merchants with the
ability to focus marketing on users that have a proven ability to
pay. Merchants avoid marketing to users unable to pay, saving
expenditure and avoiding user disappointment. More sophisticated
marketing strategies might benefit from information about user
demographics, location, device history or historic spending
behavior,
Bango ensures that data can only be used in ways that protect
personal data from misuse. When data is used for marketing,
rigorous controls are essential to ensure only general "audiences"
are presented - not data on individual users. The capability to
avoid merchant visibility of mobile operator identity information
and to avoid merchant identity passing to payment providers has
been a core part of the Bango Platform since its inception.
The investment in the integration of Audiens technology into the
Bango Platform has enabled rapid acceleration in the monetization
of data. Data can now be segmented and organized to create valuable
audience segments that can be used for marketing. Audiens
technology is already integrated with the leading trading platforms
that present these audiences to merchants in the way they normally
buy data.
During 1h2018 Bango ran initial marketing trials with leading
developers using pre-release versions of the new data monetization
technology. Results were encouraging. Three case studies, targeting
audiences in the USA, Indonesia and Italy are now available to
mobile operators to show how they can drive new revenue streams
from data monetization using the Bango Platform. In one case,
investing marketing spend with a mobile operator using Bango data
for a leading Karaoke app increased premium customer acquisition
rates by a factor of 9 compared with conventional methods.
Mobile operators can generate profits from acting as payment
processors by offering direct carrier billing. App Stores and large
merchants see the value from expanding their reach to new
consumers, there is always pressure on payment providers to reduce
cost of payment collection. The additional revenues available from
providing data to enable more efficient marketing by merchants
through using the Bango Platform are significant. Bango has
developed a business tool to enable mobile operators to model
additional profit that can be gained by upgrading to Bango and
monetizing their valuable data.
Now that Bango and mobile operators can share both new data
revenues and traditional payment revenues from delivering value to
merchants, there is increasing competitive advantage and
flexibility in negotiating commercial contracts. Payment processing
incentives can be offered in return for data monetization
revenues.
To deliver on the opportunity presented by this technology
innovation, Bango has expanded its sales and marketing team based
in Japan and Korea to support Mobile Network Operator (MNO)
upgrades and merchants in Asia where carrier billing is widespread
and essential.
To capitalize on the huge opportunity from bringing payment and
data together, a new member of the leadership team, Kaushik
Sthankiya, will be joining Bango as SVP Business Development in
October. He brings extensive experience in leading global sales and
business development teams at Docomo Digital, Mastercard and
Visa,
To date, more than 200 Google Play developers have already
registered with Bango to invest in audience targeting using data
from mobile operators. Many of these are eager to invest in
expanding their presence in markets where Bango has built a strong
mobile operator footprint.
Audiens CDP
Bango acquired Audiens to gain access to its technology and
programmatic advertising integrations for the Bango Platform.
Alongside the Bango Platform, the Audiens Customer Data Platform
(CDP) business continues to grow and has huge potential beyond
Bango merchants.
As part of Bango, Audiens now benefits from expanded technology
infrastructure and capability and access to new global
opportunities. The sales team has been expanded to operate outside
Italy, and to exploit new opportunities opened though Bango
relationships. Recent customer wins for the Audiens CDP include
LeoVegas, Morelatto and Unieuro and these are expected to be
followed by many more as business expands outside Italy.
Outlook
Growth from industry leaders: The last six months have been
successful for Bango as it continues to win important contracts and
expand its business through its unique offering. As well as the
increasing momentum with Android users, representing around 85% of
the market, Bango is seeing increasing adoption on iOS devices
popular among Amazon and Pandora users.
Data monetization opportunity: Data monetization is becoming
increasingly important to Bango and is opening new avenues for
revenue growth and customer acquisition. The high additional
profits available to mobile operators by using the Bango Platform
are a persuasive reason for them to upgrade to the Bango Platform
for Direct Carrier Billing (DCB).
Capacity for Innovation: The cash raised to support the Audiens
acquisition has ensured that Bango retains strong cash balances,
enabling growth to profitability and continued investment in
capitalizing on the huge opportunity from bringing payment and
marketing together.
Ray Anderson
Chief Executive Officer
CFO's statement
Bango business model
To provide clarity to investors, following the acquisition of
Audiens SRL in January 2018, Bango now provides financial reporting
of two synergistic business units. The Payments business processes
payment transactions through the Bango platform for the world's
leading digital and physical merchants. The Bango data business
facilitates the monetization of valuable data collected by payment
providers and mobile operators to enable more efficient marketing.
The data business includes data monetization within the Bango
business - using data from mobile operators and other payment
providers - and also the Audiens CDP business which serves a wide
range of marketeers and advertisers.
End User Spend (EUS)
EUS is the total sales processed through the Bango Platform
excluding taxes. EUS shows the growth of commerce through the Bango
Platform. It is 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 1h2018 was GBP220m, up 138% from 1h2017 (GBP92.31m) due
to growth from existing activations and additional EUS from new
activations in 1h2018. In 2018 Bango has seen growth across all
major partners connected to Bango, including Google Play, Amazon,
Microsoft and other streaming video and audio merchants. Bango
continues to drive increasing transaction volumes at low fixed cost
to drive revenue and profit to Bango in 2018 and beyond.
Revenue
Bango earns payment revenue from every transaction processed
through the Bango Platform. Revenue is either a fee based on the
value of the transaction or a fixed fee per transaction. Each
additional sale by a merchant using the Bango platform adds to EUS
and increased revenue.
Bango earns data revenue either as a percentage of the fee that
a data owner earns by selling their data through Bango to merchants
or other advertisers or as a monthly fee for using the Bango
Audiens CDP to create data segments they directly exploit.
Payment revenue increased to GBP2.22m from GBP1.72m in 1h2017,
an increase of 29%.
Bango is focused on partnering with its MNO customers to drive
substantial revenue from data monetization and encourage huge
growth in total EUS. At the beginning of 2018 Bango renegotiated
its contract with a large MNO to reduce the payment processing fee
but increase the opportunity for data monetization revenues. The
short-term impact of this change was a GBP0.5m payment revenue
reduction in 1h2018 and an anticipated revenue reduction of
approximately GBP0.2m in 2h2018. Payment revenues are expected to
be higher in 2019, and in addition there will be a significant
contribution from the data revenues that are enabled by this
contract change.
Where payments are collected for a service lasting 12 months or
more, for example a streaming service, revenues and EUS are
recognized evenly over the life of the subscription in line with
accounting standard IFRS 15.
Most of the Bango data revenue in 1h2018 was from the Audiens
CDP on a monthly fee basis with no cost of sales. Revenue was also
generated by third parties monetizing their data by using the Bango
Platform or the Audiens CDP to segment their data and sell it
through the trading desk integrations. The revenue recognized is
the value of the data as sold through the trade desks and the costs
of sales relates to the fees that is paid to the data owners and
trading desks.
Costs
The total group cost base of GBP3.30m for the first half of 2018
(1h2017: GBP2.72m) was in-line with forecasts.
The cost of operating the Bango Payment business was GBP2.15m
including all business costs such as administrative expenses, sales
and development. Group costs are those not necessary for the day to
day processing of transactions and relate solely to costs related
to Bango remaining a UK PLC, including advisors, bankers and audit
fees. Costs related to Bango data business include the existing
Audiens cost base and some centrally recharged costs necessary to
support the business unit including accounting, IT and legal fees.
Bango expects the costs for 2h2018 to be in line with 1h2018.
Operational cost efficiencies were redeployed into increased sales
and marketing activity.
The core Bango Payment business was EBITDA positive for 1h2018.
The Bango Platform can process EUS at many times current levels
with no additional operational cost. The capacity of the platform
is regularly tested to rates in excess of GBP5bn of EUS a year, and
to hundreds of transactions per second to ensure there is always
substantial headroom in the platform to handle sudden surges in
volume. Bango partners require substantial headroom to ensure their
growth ambitions can be supported by Bango. Bango continues to
invest in new developments by the R&D team to ensure that
existing direct Google Play routes, can be upgraded faster to the
Bango platform to bring hundreds of millions of EUS to the Payment
platform.
The Bango data business is not EBITDA positive, but it is
expected to become EBITDA positive in the next 12 months based on
the roadmap of future sales and expected synergies between the
Bango and Audiens businesses which will generate additional
revenues. Bango has also invested in legal and security reviews to
support the growth of this business in relation to national
regulations such as GDPR and personal information security. Bango
R&D has securely integrated the Audiens technology into the
Bango platform.
The share-based payment charge for 1h2018 was GBP0.45m (1h2018:
GBP0.33m) calculated using the Black-Scholes model. It relates to
the Bango share option program that enables all Bango employees to
share in the growth in value of Bango. It is a vital recruitment
and retention tool in a highly competitive employment market.
Depreciation was consistent with the prior year at GBP0.13m
compared to GBP0.09m in 1h2017. Amortization relating to
capitalized development costs and acquired intangibles was GBP0.71m
compared to GBP0.60m in 1h2017.
Loss and Loss per share
The loss after tax was -GBP1.92m (1h2017: -GBP1.75m) as Bango
invested in acquiring and integrating the Audiens business in the
first half of 2018 to drive future growth from new Bango revenue
streams.
Loss per share was 2.78p (1h2017: 2.67p).
Cash
Cash balance on 30 June 2018 was GBP5.88m (GBP5.56m on 30 June
2017). Cash was raised in January 2018 to fund the acquisition of
Audiens SRL, and subsequently in the integration and development of
Audiens and the Bango data business. Based on the growth of the
business and controlled cash, the cash burn in Bango in the last
year has been decreasing, and with further growth in revenue
expected in 2h0218 and beyond Bango will have sufficient cash
resources to support both planned investment to grow sales and
develop new products to ensure Bango has a strong pipeline of
upgrades and can process hundreds of millions more EUS in the near
future.
Rachel Elias-Jones
Chief Financial Officer
Consolidated statement of comprehensive income
for the six months ended 30 June 2018
Six months Six months Year ended
ended ended 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
Alternative performance measure
(Non-IFRS)
-------------------------------------- -------------- -------------- ------------
End User Spend 219,956,688 92,311,982 271,356,080
-------------------------------------- -------------- -------------- ------------
Revenue 2,634,411 1,715,153 4,151,939
Cost of sales - payment providers (252,018) (4,046) (2,439)
Gross profit 2,382,393 1,711,107 4,149,500
Other administrative expenses (3,297,948) (2,716,744) (5,717,516)
Share based payments (448,439) (325,000) (679,023)
Depreciation (128,209) (93,600) (188,496)
Amortization (711,404) (601,773) (1,396,541)
Non-recurring items - - (59,463)
-------------- -------------- ------------
Total administrative expenses (4,586,000) (3,737,117) (8,041,039)
Operating Loss (2,203,607) (2,026,010) (3,891,539)
Interest payable (38,478) (22,320) (51,458)
Investment income 5,781 15,204 20,858
Loss before taxation (2,236,304) (2,033,126) (3,922,139)
Income tax 313,097 285,670 486,986
Loss for the financial year (1,923,207) (1,747,456) (3,435,153)
Other comprehensive income
Foreign exchange on consolidation 58,511 (27,491) (56,869)
Loss and total comprehensive loss
for the
============== ============== ============
period attributable to equity holders
of Bango PLC (1,864,696) (1,774,947) (3,492,022)
============== ============== ============
Loss per share attributable
to the equity holders of Bango
PLC
Basic loss per share (2.78)p (2.67)p (5.22)p
Diluted loss per share (2.78)p (2.67)p (5.22)p
All of the activities of the group are classified as
continuing.
Notes 1 to 11 are an integral part of the consolidated financial
statements.
Consolidated statement of financial position
for the six months ended 30 June 2018
As at: 31 December
30 June 2018 30 June 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 517,085 294,076 556,863
Intangible assets 11,187,850 6,232,602 6,130,190
------------
11,704,935 6,526,678 6,687,053
Current assets
Trade and other receivables 2,355,169 2,218,262 2,013,088
Research and development
tax credits 297,672 213,883 421,215
Cash and cash equivalents 5,881,213 5,555,575 4,847,203
-------------- -------------- ------------
8,534,054 7,987,720 7,281,506
-------------- -------------- ------------
Total assets 20,238,989 14,514,398 13,968,559
-------------- -------------- ------------
EQUITY
Capital and reserves attributable
to equity holders of Bango
PLC
Share capital 14,010,036 13,154,125 13,284,561
Share premium account 35,640,386 30,692,789 31,248,453
Merger reserve 2,175,470 1,236,225 1,236,225
Other reserve 3,532,789 2,536,136 2,350,701
Foreign exchange revaluation
reserve 136,829 107,696 78,318
Accumulated losses (39,398,027) (36,326,581) (37,474,820)
-------------- -------------- ------------
Total equity 16,097,483 11,400,390 10,723,438
-------------- -------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 3,775,030 3,075,620 2,967,538
Finance lease liabilities 88,706 38,388 99,889
---------- ---------- -------------
3,863,736 3,114,008 3,067,427
---------- ---------- -------------
Non-current liabilities
Finance lease liabilities 132,790 - 177,694
Deferred tax liability 144,980 - -
---------- ---------- -------------
277,770 - 177,694
---------- ---------- -------------
Total liabilities 4,141,506 3,114,008 3,245,121
---------- ---------- -------------
TOTAL EQUITY AND LIABILITIES 20,238,989 14,514,398 13,968,559
---------- ---------- -------------
Notes 1 to 11 are an integral part of the consolidated financial
statements.
Consolidated cash flow Statement
for the six months ended 30 June 2018
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
Net cash used by operating activities (1,181,489) 196,943 (253,675)
Cash flows used by investing activities
Purchases of property, plant and
equipment (86,605) (93,111) (450,794)
Addition to intangible assets (1,205,627) (739,530) (1,509,670)
Purchase of subsidiary (1,464,280) - -
Interest received 5,781 15,204 20,858
------------ ------------ -------------
Net cash used by investing activities (2,750,731) (817,437) (1,939,606)
Cash flows generated from financing
activities
Proceeds from issuance of ordinary
shares 5,345,838 494,449 1,180,549
Costs associated with issuance of
ordinary shares (332,793) - -
Interest payable (38,478) (22,320) (51,458)
Capital payable on finance lease
obligations (56,087) (57,167) (89,571)
Capital received on finance lease
obligations - 271,600
------------ ------------ -------------
Net cash (used)/generated from financing
activities 4,918,480 414,962 1,311,120
Net (decrease)/increase in cash
and cash equivalents 986,260 (205,532) (882,161)
Cash and cash equivalents at beginning
of period 4,847,203 5,696,517 5,696,517
Exchange differences on cash and
cash equivalents 47,750 64,590 32,847
------------ ------------ -------------
4,894,953 5,761,107 5,729,364
Cash and cash equivalents at end
of period 5,881,213 5,555,575 4,847,203
------------ ------------ -------------
Notes 1 to 11 are an integral part of the consolidated financial
statements.
Consolidated statement of changes in equity
for the six months ended 30 June 2018
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
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
Issue of
new shares 125,001 369,448 - - - - 494,449
----------- ----------- ---------- ---------- ---------- ------------- ------------
Transactions with
owners 125,001 369,448 - 325,000 - - 819,449
----------- ----------- ---------- ---------- ---------- ------------- ------------
Loss for the period - - - - - (1,747,456) (1,747,456)
Foreign exchange
on consolidation - - - - (27,491) - (27,491)
----------- ----------- ---------- ---------- ---------- ------------- ------------
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
=========== =========== ========== ========== ========== ============= ============
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 - - - 679,023 - - 679,023
Share based payments
transfer for exercised
share options - - - (539,458) - 539,458 -
Exercise of share
options 255,437 925,112 - - - - 1,180,549
----------- ----------- ---------- ---------- --------- ------------- ------------
Transactions with
owners 255,437 925,112 - 139,565 - 539,458 1,859,572
----------- ----------- ---------- ---------- --------- ------------- ------------
Loss for the year - - - - - (3,435,153) (3,435,153)
Foreign exchange
on consolidation - - - - (56,869) - (56,869)
----------- ----------- ---------- ---------- --------- ------------- ------------
Total comprehensive
income for the
period - - - - (56,869) (3,435,153) (3,492,022)
----------- ----------- ---------- ---------- --------- ------------- ------------
Balance at 31
December 2017 13,284,561 31,248,453 1,236,225 2,350,701 78,318 (37,474,820) 10,723,438
=========== =========== ========== ========== ========= ============= ============
Balance at 1 January
2018 13,284,561 31,248,453 1,236,225 2,350,701 78,318 (37,474,820) 10,723,438
Share based payments - - - 448,439 - - 448,439
Issue of warrants - - - 733,649 - - 733,649
Exercise of share
options 63,336 262,502 - - - - 325,838
Issue of new shares 662,139 4,462,224 939,245 - - - 6,063,608
Expense of share
issue - (332,793) - - - - (332,793)
----------- ----------- ---------- ---------- -------- ------------- ------------
Transactions with
owners 725,475 4,391,933 939,245 1,182,088 - - 7,238,741
----------- ----------- ---------- ---------- -------- ------------- ------------
Loss for the period - - - - - (1,923,207) (1,923,207)
Foreign exchange
on consolidation - - - - 58,511 - 58,511
----------- ----------- ---------- ---------- -------- ------------- ------------
Total comprehensive
income for the
period - - - - 58,511 (1,923,207) (1,864,696)
----------- ----------- ---------- ---------- -------- ------------- ------------
Balance at 30
June 2018 14,010,036 35,640,386 2,175,470 3,532,789 136,829 (39,398,027) 16,097,483
=========== =========== ========== ========== ======== ============= ============
Notes 1 to 11 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
commerce on the internet. Bango shares are listed on the London
Stock Exchange AIM. The Bango registered office and principal place
of business is at 5 Westbrook Centre, Cambridge CB4 1YG UK.
The interim financial statements have been approved for issue by
the Board of Directors on 17 September 2018.
2. Basis of preparation
The condensed interim financial information for the half year
ended 30 June 2018 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 2017.
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 2017, except for the adoption of new standards and
interpretations effective for the first time for periods beginning
on 1 January 2018 which will be adopted in the 2018 financial
statements. The new standards impacting the Group that will be
adopted in the annual financial statements for the year ended 31
December 2018, and which have given rise to changes in the Group's
accounting policies are:
-- IFRS 9 Financial Instruments; and
-- IFRS 15 Revenue from Contracts with Customers
Under IFRS 15 when annual subscriptions are charged for the use
of the Bango platform, revenue is recognized evenly over the life
of the subscription. This is a new use of the Bango platform.
Revenue from End User Spend activity is the fee from each
transaction through the Bango platform. It is calculated as either
a fixed fee per transaction or as a percentage of the total
EUS.
The new Bango data business comprises a software as a service
business with revenue spread over the life of the service contract.
This is a revenue only business stream providing analysis detail
from the client's own data. Where Audiens is buying data from third
parties and selling this through advertising platforms, the fee
from the sale is shown as revenue on performance of the service and
the revenue share attributable to the owners of the data is a cost
of sale.
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
management decisions surrounding investment in the platform and
development of intangible assets are based. End User Spend is the
total value in a specific time period of all sales processed using
the Bango Platform excluding VAT and 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 2018 30 June 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
End User Spend 219,956,688 92,311,982 271,356,080
(b) Revenue and gross profit
Bango management has identified two operating segments. The
segments have changed in 2018 following the acquisition of Audiens
SRL. All management reporting is based on the gross profit
generated from each segment. The segments are separately managed,
with one revenue stream relating to payment transactions processed
by the Bango platform and the other relating to data monetization
for customers.
Before 2018 Bango separated revenue into transaction fees or
platform fees, all these fees related to revenue generated by
people connecting to or using the Bango platform. All such Bango
revenue is now shown as End user spend activity.
Costs associated with the running of the Bango group (such as
Nomad costs, registrar fees, auditor remuneration) are shown
separately as group costs. Where costs can be directly attributable
to the running of the different revenue generating units of the
business (such as depreciation relating to assets) these are
allocated to the appropriate revenue generating entity.
Six months ended 30 June 2018
Payment Group Total
activity Data activity
GBP GBP GBP GBP
Segment revenue 2,216,519 417,892 - 2,634,411
Cost of sales - (252,018) - (252,018)
----------- -------------- ----------- -----------
Segment gross profit 2,216,519 165,874 - 2,382,393
----------- -------------- ----------- -----------
Administrative expenses (2,150,718) (729,164) (418,066) (3,297,948)
----------- -------------- ----------- -----------
E/(L)BITDA 65,801 (563,290) (418,066) (915,555)
----------- -------------- ----------- -----------
Share based payments charge - - (448,439) (448,439)
Depreciation (128,209) - - (128,209)
Amortization (418,458) (161,221) (131,725) (711,404)
Interest payable - - (38,478) (38,478)
Interest income - - 5,781 5,781
Segment net profit / (loss) (480,866) (724,511) (1,030,927) (2,236,304)
----------- -------------- ----------- -----------
Segment assets 1,822,049 5,191,440 13,225,500 20,238,989
Segment liabilities (2,134,684) (1,785,326) (221,496) (4,141,506)
----------- ----------- ---------- -----------
Net assets (312,635) 3,406,114 13,004,004 16,097,483
----------- ----------- ---------- -----------
Six months ended 30 June 2017
Payment Group Total
activity Data activity
GBP GBP GBP GBP
Segment revenue 1,715,153 - - 1,715,153
Cost of sales (4,046) - - (4,046)
--------- -------------- ----- ---------
Segment gross profit 1,711,107 - - 1,711,107
--------- -------------- ----- ---------
Administrative expenses (2,463,236) - (253,508) (2,716,744)
----------- ----------- -----------
E/(L)BITDA (752,129) - (253,508) (1,005,637)
----------- ----------- -----------
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) (845,729) -(1,187,397) (2,033,126)
----------- ----------- -----------
Segment assets 1,530,018 - 12,984,380 14,514,398
Segment liabilities (485,367) -(2,628,641) (3,114,008)
----------- ----------- -----------
Net assets 1,044,651 - 10,355,739 11,400,390
----------- ----------- -----------
Year ended 31 December 2017
Payment Group Total
activity Data activity
GBP GBP GBP GBP
Segment revenue 4,151,939 - - 4,151,939
Cost of sales (2,439) - - (2,439)
----------- -------------- ----------- -----------
Segment gross profit 4,149,500 - - 4,149,500
----------- -------------- ----------- -----------
Administrative expenses (5,202,665) - (514,851) (5,717,516)
E/(L)BITDA (1,053,165) - (514,851) (1,568,016)
----------- -------------- ----------- -----------
Non-recurring items - - (59,463) (59,463)
Share based payments charge - - (679,023) (679,023)
Depreciation (188,496) - - (188,496)
Amortization - - (1,396,541) (1,396,541)
Interest payable - - (51,458) (51,458)
Interest income - - 20,858 20,858
----------- -------------- ----------- -----------
Segment net profit / (loss) (1,241,661) - (2,680,478) (3,922,139)
----------- -------------- ----------- -----------
Segment assets 1,451,542 -12,517,017 13,968,559
Segment liabilities (2,479,707) - (765,414) (3,245,121)
----------- ---------- -----------
Net assets (1,028,165) -11,751,603 10,723,438
----------- ---------- -----------
End User Spend activity revenue is the Bango revenue share for
processing transactions through the Bango Platform. Bango earns
revenue calculated either as a share of the net of tax figure or as
a fixed value per transaction. Assets for this segment are amounts
due from merchants or 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.
Bango data activity relates to revenues for use of the Audiens
CDP to segment or sell data. Revenue is either a monthly software
as a service fee or a revenue share from selling the data to third
parties. Assets from this segment are fees from data owners and
liabilities relate to sums owed to data owners. Liabilities also
relating to the deferred consideration for the Audiens are shown in
this segment.
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
2018 2017 2017
Unaudited Unaudited Audited
GBP GBP GBP
Loss attributable to equity holders
of Bango PLC (1,923,207) (1,747,456) (3,435,153)
Weighted average number of ordinary
shares in issue 69,291,691 65,343,621 65,768,111
Basic loss per share (2.78)p (2.67)p (5.22)p
----------- ----------- ------------
Diluted loss per share (2.78)p (2.67)p (5.22)p
----------- ----------- ------------
At 30 June 2018 options over 4,112,900 (30 June 2017: 4,086,922)
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 ended Year ended
ended 30 June 2017 31 December
30 June 2018 Unaudited 2017
Unaudited Audited
GBP GBP GBP
Loss for the financial period (1,923,207) (1,747,456) (3,435,153)
Depreciation & amortization 839,613 695,373 1,585,037
Taxation in income statement (313,097) (285,670) (486,986)
Investment income (5,781) (15,204) (20,858)
Interest payable 38,478 22,320 51,458
Foreign exchange movement (47,750) (64,590) (32,847)
Share-based payment expense 448,439 325,000 679,023
Decrease/Increase in receivables 35,972 129,132 (1,393,322)
(Decrease)/Increase in payables (660,747) 994,530 2,431,490
Realized currency translation (22,787) (142,162) (118,503)
(1,610,867) (88,727) (740,661)
Corporation tax rebate 429,378 285,670 486,986
-------------- ------------------ ------------
Net cash used by operations (1,181,489) 196,943 (253,675)
-------------- ------------------ ------------
7. Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
No GBP
As at 31 December 2016 65,145,618 13,029,124
Exercise of share options 1,277,185 255,437
As at 31 December 2017 66,422,803 13,284,561
---------- ----------
Issue of new shares 3,310,693 662,139
Exercise of share options 316,684 63,336
As at 30 June 2018 70,050,180 14,010,036
---------- ----------
On 23 January 2018 521,803 shares were issued to the owners of
Audiens SRL by Bango to acquire 98.45% of the issued share capital
of Audiens SRL, see note 10 for further details of the
acquisition.
On 24 January 2018 Bango issued 2,788,890 to existing and new
shareholders of Bango PLC to raise GBP5.02m (GBP4.68m net of fees)
to support the acquisition and future development of Audiens SRL by
Bango at a price of GBP1.80 per share.
8. Share options
No.
Outstanding at 1 January 2017
Granted 4,495,049
Lapsed 1,226,000
Exercised (364,248)
(1,277,185)
-----------
Outstanding at 31 December 2017 4,079,616
-----------
Granted 660,500
Lapsed (310,532)
Exercised (316,684)
Outstanding at 30 June 2018 4,112,900
-----------
During the period share options over 316,684 ordinary shares
were exercised at exercise prices ranging between 156.0p pence and
258.0 pence with a par value of 20 pence. The total proceeds were
GBP325,838 of which GBP63,336 was recognized as share capital and
GBP262,502 as share premium.
During the period 660,500 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 310,532
options in the six months to June 2018.
At the end of the six-month period ended 4,112,900 (30 June
2017: 4,086,922) share options were outstanding.
9. Intangible Assets
Domain Internal Acquired Acquired Acquired Goodwill Total
Names Development intangibles intangibles intangibles
(Software) (Contracts) (Brand)
GBP GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2018 32,887 8,916,031 786,666 517,037 43,704 1,200,000 11,496,325
Additions - 1,205,627 1,855,982 - 78,657 2,548,296 5,688,562
Foreign
exchange
revaluation - - 30,260 5,920 1,402 42,920 80,502
At 30 June
2018 32,887 10,121,658 2,672,908 522,957 123,763 3,791,216 17,265,389
Amortization
At 1 January
2018 32,887 4,884,112 262,295 172,468 14,373 - 5,366,135
Charge for
period - 418,460 224,770 56,836 11,338 - 711,404
At 30 June
2018 32,887 5,302,572 487,065 229,304 25,711 - 6,077,539
======= ============= ============= ============= ============= ========== ===========
Net book value
at 30 June
2018 - 4,819,086 2,185,843 293,653 98,052 3,791,216 11,187,850
======= ============= ============= ============= ============= ========== ===========
Domain Internal Acquired Acquired Acquired Goodwill Total
Names Development intangibles intangibles intangibles
(Software) (Contracts) (Brand)
GBP GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2017 32,887 7,406,361 786,669 517,037 43,703 1,200,000 9,986,655
Additions - 739,530 - - - - 739,530
Foreign exchange
revaluation - - 24,026 15,787 1,335 36,636 77,784
At 30 June
2017 32,887 8,145,891 810,693 532,824 45,038 1,236,636 10,803,969
Amortization
At 1 January
2017 32,887 3,768,281 98,333 64,630 5,463 - 3,969,594
Charge for
period - 475,455 73,750 48,472 4,096 - 601,773
At 30 June
2017 32,887 4,243,736 172,083 113,102 9,559 - 4,571,367
======= ============= ============= ============= ============= ========== ===========
Net book value
at 30 June
2017 - 3,902,155 638,610 419,722 35,479 1,236,636 6,232,602
======= ============= ============= ============= ============= ========== ===========
Domain Internal Acquired Acquired Acquired Goodwill Total
Names Development intangibles intangibles intangibles
(Software) (Contracts) (Brand)
GBP GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2017 32,887 7,406,361 786,667 517,037 43,704 1,200,000 9,986,655
Additions - 1,509,670 - - - - 1,509,670
Foreign exchange - - - - - - -
revaluation
At 31 December
2017 32,887 8,916,031 786,667 517,037 43,704 1,200,000 11,496,325
Amortization
At 1 January
2017 32,887 3,768,281 98,333 64,630 5,463 - 3,969,594
Charge for
period - 807,409 163,962 107,838 8,910 - 1,088,119
Impairment - 308,422 - - - - 308,422
At 31 December
2017 - 4,884,112 262,295 172,468 14,373 - 5,366,135
======= ============= ============= ============= ============= ========== ===========
Net book value
at 31 Dec
2017 4,031,919 524,372 344,569 29,331 1,200,000 6,130,190
======= ============= ============= ============= ============= ========== ===========
10. Acquisition of Audiens SRL
On 23 January Bango acquired Audiens SRL for cash, shares, share
warrants and a deferred consideration from Digitouch SPA and other
angel investors. Audiens SRL is a customer data platform (CDP)
based in Milan which has developed a means for third parties to
better segment and organize their data either for their own use or
to sell through trading desks.
The acquisition of 98.45% of the Audiens SRL capital was for
cash (EUR1.48m) paid immediately, cash (EUR0.62m) paid over 12
months to settle a debt balance to Digitouch, 521,803 ordinary
shares in Bango PLC (EUR1.19m), share warrants at an exercise price
of GBP1.80 per share with a ten year life over 738,399 ordinary
shares (EUR0.84m). The final acquisition for 1.55% of the Audiens
shares owned by Marko Maras the CEO of Audiens is linked a call and
put option agreement valid for 2 years from the acquisition. The
call and put agreement terms are linked to the long-term revenue
targets for the business and the underlying Bango PLC share price.
Substantially all of the risks and rewards of the non-controlling
interest in the Audiens business are considered to have transferred
to Bango.
The net assets acquired were as follows:
Fair value Fair value
EUR GBP
Intangible assets - software 2,112,664 1,855,982
Intangible assets - brand 89,535 78,657
Goodwill 2,900,518 2,548,296
Net assets - working capital (26,292) (23,090)
Net assets - property, plant and equipment 1,171 1,028
Deferred tax (179,818) (158,160)
---------- ----------
Net investment 4,897,778 4,302,713
---------- ----------
Satisfied by:
Fair value Fair value
EUR GBP
Cash 1,476,799 1,297,372
Share consideration 1,187,937 1,043,606
Share warrants 835,112 733,649
Deferred consideration 623,000 547,307
Put/Call warrant 774,930 680,779
Total consideration 4,897,778 4,302,713
---------- ----------
Following a detailed review of the fair value of the assets by
an independent third party, acquired in accordance with IFRS3
Business Combinations, Bango has recognized intangible assets being
software and trade names, totaling GBP1.93m, net liabilities of
GBP0.02m and goodwill totaling GBP2.55m. Goodwill represents the
excess of the purchase price over the fair value of the assets
acquired. The goodwill arising on the acquisition is largely
attributable to the added value associated with future monetization
through new customer relationships and the value of the existing
workforce.
11. Publication of non-statutory accounts
The condensed consolidated interim financial information was
approved by The Board of Directors on 17 September 2018. 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
2017 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 2018 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 2018 which comprises the Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Cash Flow Statement, Consolidated Statement of Changes
in Equity and the related notes (1 to 11). 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 2018
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BDLLFVKFZBBB
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September 18, 2018 02:01 ET (06:01 GMT)
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