TIDMBNN
RNS Number : 2599R
BNN Technology PLC
08 December 2016
8 December 2016
BNN Technology plc
Strategic & Trading Update
-- Gross sales(1) of approximately RMB 1.3 billion Q4-to-date.
Exceeded RMB 1 billion (cGBP120m) in November 2016 after four-fold
increase in volumes versus October
-- Acceleration of business activity, supported by investment brought forward into FY 2016
-- Entry to fast growing Chinese digital advertising market with significant new contract
-- Further contracts, including prestigious content agreements, expected before year-end
-- Investment in data and R&D: world-class specialist team
to maximise revenue generation and deliver new products
-- Xinhua News App update: All 12 targeted provinces now
successfully signed by the company's partners Xinhuatong and
NewNet
Trading Update
As outlined in the interim accounts, we are pleased to confirm
that the Group has returned to substantial revenue generation in
the second half of this year, with strong month-on-month increases
in trading volumes.
After extensive platform testing in August and September, as
well as further mobile top-up contracts, we saw a dramatic
acceleration of B2B transactions fulfilled by our platform in
October and November. We expect further growth of B2B volumes in
December and into Q1 2017 as further payment services are launched
and new contracts enacted.
We have been making considerable commercial progress this year
and, as a result, a number of opportunities and investments which
we anticipated would materialise in 2017 are now materialising this
year. As such we are now investing heavily in R&D, developing
our advertising strategy and pursuing content partnerships, in
addition to signing all 12 provinces targeted, through our partners
Xinhuatong and NewNet, to the Xinhua news mobile app. This
development is welcomed by the Board as a firm indication that our
plans are advancing at a faster pace than originally expected.
Below is a chart showing the Group's gross sales(1) by month in
the second half of 2016 to date. In November, more than 95% of
gross sales were driven by our B2B mobile top-up business.
Gross Sales(1) in second half of 2016 to date (GBP Millions)
http://www.rns-pdf.londonstockexchange.com/rns/2599R_-2016-12-7.pdf
(1) Gross sales are the total transaction value of all
payments/services that the Group processes in a period. We receive
a small percentage commission from the transactions we process and
this is what will be recorded in our disclosed revenues at
year-end. We receive a modest commission on the B2B transactions,
however strategically we aim to transfer customers from B2B to B2C
customers in the future which will drive higher margins, and
greater data acquisition, for the company.
Investment in new contracts
Advertising
Through our partnership with NewNet, the Group is pleased to
report it has been awarded key advertising and content provision
rights. In return for an upfront fee and revenue share, it
represents a unique and exciting opportunity for the Group to add
an additional revenue stream when the advertising sales start in
2017.
To support this contract win, BNN Technology and NewNet is
expected to announce, before the year end, significant content
agreements with prestigious partners that we hope will drive
significant customer traffic to the Xinhua News Mobile app, through
our technology platform, thereby accelerating monetisation of the
large user base being built and managed by the Group.
Investment in R&D Team
As reported previously, the data that can be captured through
the mobile app, and exploitation of that data, offers the
opportunity to create substantial shareholder value from 2017 and
beyond. With the introduction of unique mobile content and
expansion of payment services, we are pleased to announce the
recruitment of a world-class specialist data team to focus on
product development with our partners.
The team brings to BNN Technology substantial leading edge
experience and capabilities of large scale, blue chip
organisations, having worked with a number of Fortune 50 companies
on platforms handling high volumes of data, as well as building
analytics and data mining teams. The team will also focus on
developing, testing and delivering a number of new products to the
market over the coming months.
Further initiatives
In addition, we are in advance stages of negotiation on several
significant contracts. These include contracts to support new B2C
services launched on the Xinhua News Mobile App, working with
prestigious national partners. Our technology will allow consumers
in these sectors to make payments and update information with ease
and security using their mobile phones. We are hopeful these
services will go live in the first few months of 2017. Together
with the contracts and initiatives announced today, these new
revenue streams represent significant potential for both higher
margins and valuable customer data.
Xinhua Rollout
The Group is very pleased to announce that all 12 provinces
targeted for the launch of payment services (utilities, mobile
top-up, traffic fines) on the Xinhua News Mobile app have been
signed by our partners Xinhuatong and NewNet ahead of the year-end
schedule originally indicated. Our technology platform will be
launched in these provinces, through our partners, with a total
population of c.800 million, representing coverage of approximately
three-quarters of all existing utility payments in China.
Nasdaq Update and FTSE Reclassification
The Nasdaq process is well underway with both the SEC and the
Nasdaq exchange and we look forward to providing further updates in
the new year. As announced on 2 December 2016, FTSE Russell has
confirmed that BNN's FTSE Industry Classification Benchmark will
change from "Gambling" (ICB Subsector Code 5752) to "Internet" (ICB
Subsector Code 9535). The change in industry classification
appropriately reflects BNN's current business model and will be
effective as of Monday 19 December 2016.
Darren Mercer, Chief Executive of BNN Technology, said:
"We are delighted with the progress we have been making in 2016.
Our key partnership with Xinhuatong, through NewNet, and activities
within the Xinhua News Mobile App, have returned the Group to
revenue generation during the second half of 2016, with a circa
four-fold increase in gross sales(1) between October and November.
This growth gives the Directors considerable confidence in the
scalability of our platform and prospects for growth in December
2016 and beyond.
"Our strong balance sheet has enabled us to execute quickly on
investing in key contracts in the areas of advertising, content
provision and new services to be offered on the Xinhua News Mobile
App, utilising our technology platform through our partner
Xinhuatong. All of these represent sustainable, high-growth revenue
streams, supported by our own new, world-class resource in R&D.
With significant cash reserves of in excess of GBP30 million at the
end of this calendar year, several attractive opportunities remain
open to the Group.
"Good visibility for additional revenue through existing sales
channels for December and well into 2017, together with our
on-going development of multi-revenue channels, gives the Board
confidence that next year and beyond will see a substantial
enhancement in shareholder value. I am excited by the huge
opportunity ahead of us. Our robust platform is pivotal to
capitalising on our strong relationships in China as we expand the
business to move into significant complementary areas. With our
Nasdaq process well advanced, we hope to be placed in a peer group
of like-minded Chinese internet technology companies in the new
year."
- ENDS -
For further information, please contact:
BNN Technology plc +44 (0) 1565 872990
Darren Mercer, Chief Executive
Scott Kennedy, Chief Financial
Officer
Stephen Benzikie, Communications
+44 (0) 20 7404
Brunswick Group (Public Relations) 5959
Brian Buckley / Diana Vaughton
Strand Hanson Limited (Nominated +44 (0) 20 7409
& Financial Adviser) 3494
Andrew Emmott / Ritchie Balmer
Mirabaud Securities LLP (Broker) +44 (0) 20 7878
Peter Krens 3362
About the Group
BNN Technology plc (AIM:BNN) is a Chinese technology, content
and services company that builds long-term partnerships to deliver
China's citizens with value-added services, content and evolving
opportunities.
Listed on AIM since 2014 the Group principally engages in
providing technology to partners to facilitate fulfilment of
payments online and on mobile apps through partnerships or
affiliate agreements with corporate and key government partners,
and, developing digital content, both online and mobile. Through
its partnership with Xinhuatong and NewNet, BNN facilitates mobile
payments through its technology platform on the Xinhua News mobile
app in 12 provinces in China. The Chinese consumer shift to 'life
on mobile' is only just beginning and BNN's platform technology
enables urban and rural communities across China to access
exclusive content and pay for more services online.
The Group employs over 300 professionals throughout China.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTDDBDDGUGBGLR
(END) Dow Jones Newswires
December 08, 2016 02:00 ET (07:00 GMT)
BNN Technology (LSE:BNN)
Historical Stock Chart
From Apr 2024 to May 2024
BNN Technology (LSE:BNN)
Historical Stock Chart
From May 2023 to May 2024