TIDMMONI
RNS Number : 6167X
Monitise PLC
23 February 2017
23 February 2017
Monitise plc
Interim Results for the six months to 31 December 2016
Substantially reduced losses and continued positive EBITDA
Market for FINkit continues to grow
London - 23 February 2017 - Monitise plc (LSE: MONI) ("Monitise"
or the "Company"), the digital technology group specialising in
financial services, announces its unaudited interim results for the
six months ended 31 December 2016.
FY17 FY16 FY16 FY16
GBPm H1 H2 H1 Total
Revenue 28.2 34.2 33.4 67.6
EBITDA(1) 0.3 0.6 -20.2 -19.6
Loss before tax -7.5 -32.6 -210.5 -243.1
Cash from operations -4.7 0.4 -22.3 -21.9
Exceptional & other
cash usage(2) -10.0 -11.7 -13.1 -24.8
Cash balance 27.3 42.1 53.4 42.1
Headcount (period end) 420 500 627 500
Highlights
-- Transformation initiated a year ago delivers EBITDA
profitability for the second consecutive six month period, with a
significant reduction in reported loss
-- 50% revenue growth from the Content business unit
-- Relaunch of Create as Big Radical, led by industry heavyweight
-- New president of Americas business unit appointed to drive business development
-- Continuing strong interest from financial institutions in FINkit(R) platform
-- FINkit partnership programme launched
-- FINkit agreements under active discussion
Monitise's Chief Executive, Lee Cameron said - 'Our
transformation programme is nearing completion, and continued half
on half EBITDA profitability demonstrates that it is working.
Having successfully stabilised and simplified the Group, the
challenge now is to grow our revenue. To help us achieve that we
have recently appointed new senior management to two of our
business units, and we remain fully committed to, and optimistic
about, the potential of our FINkit platform.
'Deadlines in 2017/18 for the implementation of regulatory
initiatives that focus on increasing competition and opening up
banking in both Europe and the UK are now imminent. These continue
to ensure that delivering on digital transformation remains top of
the retail banks' agendas.
'Mandates from both the UK's Competition and Markets Authority
and the European Commission's Payments Services Directive (PSD2)
are driving demand from retail banks for the type of faster
technology change enabled by FINkit. We believe that the market for
our products and services is increasingly moving in our direction,
and I remain positive about the future of our business.
'FINkit solves the challenge banks face when seeking to
accelerate the delivery of compliant digital services to their
customers. We will continue to focus our efforts on serving the
needs of our existing and prospective financial services clients,
whilst exploring other opportunities with interested parties who
also see the value in what we have built. Calendar year 2017 will
be a pivotal year for Monitise.'
Outlook
As previously stated, Group revenue is expected to decline in
the financial year to 30 June 2017, but the year will benefit from
the full year impact of cost-savings already achieved in the
interim results to 31 December 2016.
FINkit represents a real opportunity for Monitise to establish
long-term sustainable growth, and we will continue to invest in
developing that part of our business throughout the current
financial year.
FY17 capital spending will be materially lower than FY16, and
cash outflows relating to onerous contracts will fall from GBP6.7m
in H1 FY17 to approximately GBP1m in H2 FY17. Given this reduction
and the stabilisation of the Group, we are confident that we have
sufficient funding in place to execute on our plans. We will
continue to evaluate all the Group's assets to make sure they
remain relevant to our strategy and add to our value.
This announcement contains inside information.
(1) EBITDA is defined as operating loss before exceptional
items, depreciation, amortisation, impairments and share-based
payments charge.
(2) Exceptional & other cash usage does not include the
impact of foreign exchange movements.
FINkit(R) is a registered trademark in the UK.
For further information:
Monitise plc Tel: +44(0)20
Lee Cameron, Chief Executive 3657 0900
Officer
Gavin James, Chief Operating
Officer
Canaccord Genuity (NOMAD) Tel: +44(0)20
Simon Bridges, Andrew Buchanan 7523 8000
Attila Consultants Tel: +44(0)20
Charles Cook, Nita Shah 7947 4489
Tel: +44(0)7710
910 563
About Monitise
Monitise plc is a specialist in financial services technology
focused on accelerating the digital transformation of banks and
financial institutions.
Monitise FINkit platform and associated capabilities builds upon
over a decade of experience in delivering digital services to banks
and financial services partners. Whether it is augmenting legacy
systems with minimal impact on those systems, a greenfield project,
or strategic digital transformation, FINkit delivers innovation at
speed, safely and securely.
Monitise management will present the results at 9.00 am today 23
February 2017 at the London offices of their NOMAD and broker
Canaccord Genuity. A recording of the meeting will be made
available on the investor relations section of the Monitise
website.
Find out more at www.monitise.com
Six-month review 2017
Overview
In the first half of financial year 2017 we continued to see the
benefits from the substantial transformation put in place in
financial year 2016.
First-half operating expenses fell 20% and the number of
employees reduced by 16% compared to the second half of 2016.
The transformation programme has delivered a shift from a fixed
to a variable cost structure that has enabled us to retain a
positive EBITDA in the face of the expected decline in revenues as
we transition the business.
As expected, revenue decline came from our Americas and Europe
businesses, which also impacted our Big Radical and MEA business
units. Throughout the period there have been a number of new
customer wins, particularly in our Big Radical and MEA business
units. We also saw strong growth in the Content business which is
highly profitable and benefiting not only from growth in site
visits, but also in revenue per visit.
FINkit will be a major driver of future growth for the Group and
we will continue to invest in the development of this business
unit, in its people, technology and sales channels. We remain
confident in the value of FINkit and the long-term opportunity that
exists. Financial institutions are coming under increased pressure
from regulators and their customers to deliver more digital
engagement and are under threat from competitors, including
FinTechs, who will seek to benefit from this change. As we have
experienced with prior product launches, the sales cycle to
financial institutions involves rigorous procurement processes
including extensive technical diligence. It is this barrier that
often presents too high a hurdle for FinTechs to achieve but one
that Monitise has excelled at and welcomes.
Business unit and financial review
H1 FY17 H1 FY16
Total Total
GBPm External Internal revenue EBITDA External Internal revenue EBITDA
------------- --------- --------- --------- ------- --------- --------- --------- -------
FINkit - - - -2.7 - - - -1.3
Europe 9.8 0.1 9.9 1.3 15.2 0.4 15.6 -7.1
Americas 6.3 - 6.3 0.1 10.0 - 10.0 -3.4
Big Radical 1.9 0.1 2.0 -0.8 1.5 1.0 2.5 -0.9
MEA 3.2 0.5 3.7 0.3 2.2 2.1 4.3 1.0
Content 7.0 - 7.0 3.2 4.5 0.2 4.7 0.9
Unallocated -0.7 -1.1 -3.7 -9.4
------------- --------- --------- --------- ------- --------- --------- --------- -------
Group 28.2 -0.7 28.2 0.3 33.4 -3.7 33.4 -20.2
As anticipated in previous announcements, revenues fell to
GBP28.2m but it was pleasing to see that we were able to maintain a
positive profit at the EBITDA level of GBP0.3m.
The significant reduction in the loss before tax from GBP210.5m
in H1 FY16 to GBP7.5m in H1 FY17 reflects the non-recurrence of the
impairment charges taken in H1 FY16 and a net exceptional credit of
GBP7.4m in H1 FY17 as we settled the majority of our onerous
contracts at a cost within the levels provided.
The onerous contract provisions were significantly reduced as we
exited these contracts and sublet or assigned all of our space at
our previous head office at Gresham Street, London. The provisions
at the end of the prior year of GBP18.8m have been reduced to
GBP3.7m with the bulk of the residual being the remaining property
obligations, principally the customary run off of rent free
periods.
Business segments
FINkit
The six months to 31 December 2016 saw an enormous amount of
activity for the FINkit business unit. Whilst the lack of a signed
contract reflects the long and complex sales cycle when engaging
with large financial institutions, our sales team are very actively
engaged with potential clients with agreements under active
discussion. Banks who have had an opportunity to test FINkit,
review the technology and meet our people, have been unanimously
complimentary and pleased with what they have witnessed.
Banks understand the challenge they face and whilst some will
choose to solve the problem by utilising internal resources, hiring
digital leaders from other industries and engage in innovation
theatre, others will look to partner with businesses who can offer
an alternate approach.
We are very encouraged by the response we have received and the
level of interest for FINkit enabled services from both existing
and prospective customers. It is with this background that we
remain confident that FINkit will gain its first customer and then
enjoy further traction in providing financial institutions with a
platform that is fit for purpose, scalable, compliant and
flexible.
FINkit is not a major re-platforming project for a bank nor does
it come at great expense. FINkit can be implemented simply and cost
effectively giving the bank an accelerated time to value and a
platform upon which they can build, launch and run successive
digital propositions that deliver more value to their customers and
can be consumed on an 'as needed' basis both commercially and
operationally.
A perfect storm now exists where banks are rethinking the way
they serve their customers. PSD2 and the open banking initiative
are providing the regulatory impetus for banks to digitally engage
and allow greater competition from FinTechs and others who see an
opportunity to use the banks' constraints to their advantage.
Customers demand more from their bank and often expect a
digital-native experience from the financial services provider
regardless of the compliance that a bank must ensure is an integral
part of their offering.
FINkit is purpose-built to help banks and financial institutions
level the playing field by enabling rapid development and
deployment of compliant services to meet the demands of regulators
and customers whilst defending their business from the threat of
disruptors and non-regulated enterprises. We also enable financial
institutions to benefit from collaboration with FinTechs with whom
we are curating capability.
Until we are able to evidence our first operational contract, we
will continue to tightly control our cost base including deferring
certain spend until demand requires it. Where we consider it
important to invest in the on-going development of FINkit to
enhance its capabilities, we will do so and in line with this we
have recorded development capital expenditure of GBP2.0m in the
period.
Europe
The revenues in our Europe business are derived from our
Monitise Enterprise Platform (MEP).
As previously guided, the Europe business saw a reduction in
revenues from GBP15.6m in H1 FY16 to GBP9.9m in H1 FY17. The
reduction in revenue results from the Visa Europe contract ending
on 30 June 2016 and reduced activity levels with a significant
customer, ahead of them taking the hosting of the platform
in-house.
The Europe business has significantly reduced its cost base from
GBP22.7m in H1 FY16 to GBP8.6m in H1 FY17. This reduced cost base
has also been structured to be more variable with business
activity. Whilst the Europe business achieved an EBITDA profit of
GBP1.3m for the last six months (H1 FY16 loss GBP7.1m), we expect
to see its revenue further decline as we transition from providing
hosted services and MEP customers migrate their services to the
FINkit platform.
Americas
The Americas business now comprises the Monitise Vantage
Platform which powers mobile banking and messaging services for
banks and credit unions across the Americas.
The business has seen a reduction in revenues driven by the Visa
Inc contract ending at the end of the last financial year, as
previously announced, and a significant customer taking their
activity in-house.
The business has been through a significant change to its cost
base, with the level of cost being reduced significantly from
GBP13.4m in H1 FY16 to GBP6.2m in H1 FY 17, as well as the cost
base being restructured to ensure it is more variable with business
activity. The business reported an EBITDA profit of GBP0.1m for the
six months benefiting from revenues on the final legacy contract in
this region and the settlement of claims provided for in the
financial year to 30 June 2016.
Growth in our Americas business will be driven by the sale of
additional products, including FINkit. As the emphasis of the
business changes from cost reduction to customer management and new
business development, a new management team is being put in place.
This management team is being led by Fatih Isbecer, previously CEO
and founder of our MEA business, who has a wealth of experience in
building businesses and delighting customers with faultless
delivery. He and his team will focus on product development,
customer satisfaction and new wins.
Big Radical
In December, Scott Ewings joined us as Managing Director of
Monitise Create, having led significant growth and transformation
at leading design houses. Under his leadership we relaunched the
business in January 2017 as Big Radical. There is a clear market
appetite for Big Radical's expertise.
Big Radical delivers a highly regarded full digital agency
capability which provides market leading strategy consultancy,
human first digital design and UI/UX expertise to its clients which
are from a variety of industries including financial services,
leisure, automotive and services.
Whilst we do not expect an immediate revenue impact from the
relaunch, the initial feedback on the proposition has been very
positive and we look forward to improving results from the
business.
The business continued to win new clients in the period and we
are confident that this trend will continue throughout 2017
returning the business to growth and profitability. However, the
nature of the business means the timing of projects and revenue is
lumpy.
Despite a reduction in the cost base of the business from
GBP3.4m in H1 FY 16 to GBP2.8m in H1 FY17, we incurred an EBITDA
loss of GBP0.8m (GBP0.9m H1 FY16).
MEA
The MEA business provides digital design and engineering
expertise to a range of customers, both in financial services and
other industries in its regional market of Turkey and the Middle
East.
The MEA business has continued to perform well despite the
reduction in the level of Group-derived revenue noted in previous
reports. MEA reported revenues of GBP3.7m (GBP4.3m H1 FY16) which
is consistent with the level of activity in the second half of
FY16. External revenue grew 44% compared to H1 FY16 and 6% compared
to H2 FY16.
The business continues to manage its cost base tightly and
reported EBITDA of GBP0.3m (GBP1.0m H1 FY16). The business will
also increasingly provide these services to the broader Monitise
group as it supports the capability and resource requirements of
both the FINkit and Americas businesses.
Content
The Content business, utilising its network of retailers,
affiliates and ticket agencies, provides offers to consumers which
generate revenue for the business when they are redeemed.
The Content business continues its growth with revenues in the
seasonally strong first half of GBP7.0m (GBP4.7m H1 FY16). The
growth continues to be driven by increasing visits to the UK
voucher business myvouchercodes.co.uk and by growth in revenue per
visit. The strong revenue performance produced EBITDA of GBP3.2m
(GBP0.9m H1 FY16).
The business is investing in a number of initiatives that expand
the proposition, increase the user base and revenue per visit. The
business also continues to invest in its international sites in
France, USA, Germany and Australia where revenues have increased
143% versus H1 FY16, albeit from a low base, and in adjacent
offerings that enhance the content and benefits to both retailers
and consumers.
Central cost
The Group central cost base has remained consistent with the
second half of FY16 at GBP1.1m, following a material reduction from
the first half of FY16 when the cost-base was GBP9.4m.
Income statement
Depreciation and amortisation
Depreciation in the period was GBP0.9m (GBP2.8m H1 FY16).
Amortisation for the period was GBP10.0m (GBP7.2m H1 FY16) which
includes amortisation of acquired intangibles of GBP5.8m,
capitalised development costs of GBP3.2m, and purchased software
licences of GBP1.0m. The increase in amortisation in the period was
due to the commencement of amortisation of capitalised development
costs relating to the FINkit platform and the reduction in useful
economic life estimates reported at last year end.
Share based payments
The share based payments charge of GBP4.4m (GBP10.4m H1 FY16),
comprises GBP2.8m in relation to earn out share based payments and
GBP1.6m related to employee share option grants. The charge for the
period is the last charge in relation to earn out share based
payments as all such arrangements ended as at 31 December 2016.
Exceptional costs
A net credit of GBP7.4m for exceptional items has been taken in
the period compared with net charges of GBP1.0m for the 6 months to
31 December 2015 and GBP3.5m for the year to 30 June 2016. The
make-up of the net credit is as follows.
GBPm H1 FY17 H1 FY16 FY 2016
Exceptional income - (5.0) (6.9)
Onerous contracts (7.2) (2.4) (3.2)
Surplus property costs (1.0) 2.3 4.4
Restructuring costs - 6.0 8.7
Other 0.8 0.1 0.4
Total (7.4) 1.0 3.5
Other costs relate to corporate development costs.
Loss before tax
The Group reported a loss before tax of GBP7.5m (GBP210.5m H1
FY16).
Tax
A tax credit of GBP0.5m (GBP5.1m H1 FY 16) was recorded in the
period. This principally related to non-cash movements on the
unwinding of deferred tax recognised in relation to acquired
intangible assets. The Group has gross tax losses of GBP320m which
are available for offset against future profits in the companies in
which these arose.
Attributable loss
The reported loss after tax for the period was GBP7.0m
(GBP205.4m H1 FY16).
Cash flow and funds
The Group ended the half with cash balances of GBP27.3m as at 31
December 2016 compared to GBP42.1m at 30 June 2016, and no bank
debt. The main areas of cash usage in the period were the
restructuring of the business and the settlement of onerous
contracts of GBP6.8m, capital expenditure of GBP2.7m and cash from
operations of GBP4.7m.
The settlement of the majority of the onerous contracts leaves
the business in a stronger position enabling a focus on operations.
The remaining onerous contract and restructuring provisions of
GBP3.7m will be spread over a number of years with the anticipation
that GBP1m will be paid in the second half of the financial
year.
Cash from operations in H1 FY17 is impacted by reductions in
deferred income of GBP1.5m as large customer contracts reduce or
end, and by GBP2.5m from the timing of our payment runs at the
period end when compared to the year-end timing.
Condensed Consolidated Statement
of Comprehensive Income
6 months 6 months Year
ended ended ended
31 December 31 December 30
June
2016 2015 2016
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
------------------------------------------ ----- ------------ ------------ ----------
Revenue 4 28,158 33,359 67,565
Cost of sales (11,242) (15,846) (28,706)
------------------------------------------ ----- ------------ ------------ ----------
Gross profit 16,916 17,513 38,859
Operating costs before depreciation,
amortisation, impairments and
share-based payments (16,567) (37,707) (58,482)
------------------------------------------ ----- ------------ ------------ ----------
EBITDA 6 349 (20,194) (19,623)
Depreciation, amortisation and
impairments (10,854) (179,986) (205,216)
------------------------------------------ ----- ------------ ------------ ----------
Operating loss before share-based
payments and exceptional items (10,505) (200,180) (224,839)
Share-based payments (4,440) (10,407) (16,468)
Exceptional items 6 7,381 (980) (3,492)
------------------------------------------ ----- ------------ ------------ ----------
Operating loss 5 (7,564) (211,567) (244,799)
Finance income 162 1,147 1,975
Finance costs (66) (92) (200)
Share of post-tax profit/(loss)
of joint ventures - (29) (58)
------------------------------------------ ----- ------------ ------------ ----------
Loss before income tax (7,468) (210,541) (243,082)
Income tax 465 5,133 9,711
------------------------------------------ ----- ------------ ------------ ----------
Loss for the period/year attributable
to the owners of the parent (7,003) (205,408) (233,371)
Other comprehensive (expense)/income
that may be reclassified subsequently
to profit or loss:
Currency translation differences
on consolidation (1,734) 7,585 8,889
------------------------------------------ ----- ------------ ------------ ----------
Total comprehensive expense for
the period/year attributable
to the owners of the parent (8,737) (197,823) (224,482)
------------------------------------------ ----- ------------ ------------ ----------
Loss per share attributable
to owners of the parent during
the period/year (expressed
in pence per share):
- basic and diluted 7 (0.3p) (9.3p) (10.5p)
------------------------------------------ ----- ------------ ------------ ----------
The comparative figures include a reclassification
of marketing costs from operating expenses to cost
of sales (see note 2.1).
Condensed Consolidated Statement
of Financial Position
As at As at As at
31 December 31 December 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
Note GBP'000 GBP'000 GBP'000
------------------------------------ ----- ------------ ------------ ----------
ASSETS
Non-current assets
Property, plant and equipment 2,674 3,780 3,338
Intangible assets 8 28,263 57,126 36,155
Investments in joint ventures - 471 -
Other receivables 649 - 370
------------------------------------ ----- ------------ ------------ ----------
31,586 61,377 39,863
Current assets
Trade and other receivables 16,215 23,064 15,970
Current tax assets 3 - 12
Cash and cash equivalents 9 27,325 53,367 42,089
------------------------------------ ----- ------------ ------------ ----------
43,543 76,431 58,071
------------------------------------ ----- ------------ ------------ ----------
Total assets 75,129 137,808 97,934
------------------------------------ ----- ------------ ------------ ----------
LIABILITIES
Current liabilities
Trade and other payables (19,221) (28,030) (21,627)
Current tax liabilities - (11) -
Provisions 10 (1,227) (16,341) (10,864)
Financial liabilities 11 (613) (1,023) (1,002)
------------------------------------ ----- ------------ ------------ ----------
(21,061) (45,405) (33,493)
Non-current liabilities
Deferred income and other payables (1,171) (3,499) (950)
Provisions 10 (2,470) (8,002) (8,016)
Financial liabilities 11 (560) (1,625) (807)
Deferred tax liabilities (509) (5,073) (1,021)
------------------------------------ ----- ------------ ------------ ----------
(4,710) (18,199) (10,794)
Total liabilities (25,771) (63,604) (44,287)
------------------------------------ ----- ------------ ------------ ----------
Net assets 49,358 74,204 53,647
------------------------------------ ----- ------------ ------------ ----------
EQUITY
Capital and reserves attributable
to owners of the parent
Ordinary shares 12 22,961 22,044 22,519
Ordinary shares to be issued 12 - 2,511 2,511
Share premium 12 383,725 383,721 383,721
Foreign exchange translation
reserve 4,643 5,073 6,377
Other reserves 276,355 262,034 269,449
Accumulated losses (638,326) (601,179) (630,930)
------------------------------------ ----- ------------ ------------ ----------
Total equity 49,358 74,204 53,647
------------------------------------ ----- ------------ ------------ ----------
Condensed Consolidated Statement
of Changes in Equity
Ordinary Share-
shares
to Reverse based Foreign
Ordinary be Share Merger acquisition payment Accumulated exchange
shares issued premium reserve reserve reserve losses reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Six months
to 31 December
2015
Balance at
1 July 2015 21,682 2,511 383,721 228,672 (25,321) 40,863 (397,833) (2,512) 251,783
Loss for the
period - - - - - - (205,408) - (205,408)
Other
comprehensive
income - - - - - - - 7,585 7,585
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Total
comprehensive
(expense)/income - - - - - - (205,408) 7,585 (197,823)
Issue of Ordinary
shares relating
to prior year
business
combinations 357 - - 9,511 - (36) - - 9,832
Share-based
payments - - - - - 10,407 - - 10,407
Exercise of
share options 5 - - - - (2,062) 2,062 - 5
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Balance at
31 December
2015 22,044 2,511 383,721 238,183 (25,321) 49,172 (601,179) 5,073 74,204
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Twelve months
to 30 June
2016
Balance at
1 July 2015 21,682 2,511 383,721 228,672 (25,321) 40,863 (397,833) (2,512) 251,783
Loss for the
year - - - - - - (233,371) - (233,371)
Other
comprehensive
income - - - - - - - 8,889 8,889
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Total
comprehensive
(expense)/income - - - - - - (233,371) 8,889 (224,482)
Issue of Ordinary
shares relating
to prior year
business
combinations 791 - - 9,511 - (470) - - 9,832
Share-based
payments - - - - - 16,468 - - 16,468
Exercise of
share options 46 - - - - (274) 274 - 46
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Balance at
30 June 2016 22,519 2,511 383,721 238,183 (25,321) 56,587 (630,930) 6,377 53,647
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Six months
to 31 December
2016
Balance at
1 July 2016 22,519 2,511 383,721 238,183 (25,321) 56,587 (630,930) 6,377 53,647
Loss for the
period - - - - - - (7,003) - (7,003)
Other
comprehensive
expense - - - - - - - (1,734) (1,734)
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Total
comprehensive
expense - - - - - - (7,003) (1,734) (8,737)
Issue of Ordinary
shares relating
to prior year
business
combinations 438 (2,511) - 2,466 - - (393) - -
Share-based
payments - - - - - 4,440 - - 4,440
Exercise of
share options 4 - 4 - - - - - 8
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Balance at
31 December
2016 22,961 - 383,725 240,649 (25,321) 61,027 (638,326) 4,643 49,358
------------------ --------- --------- -------- -------- ------------- -------- ------------ --------- ----------
Condensed Consolidated Cash
Flow Statement
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
Note 2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------ ----- ------------ ------------ ----------
Cash flows used in operating
activities
Cash used by operations 13 (4,732) (22,321) (21,869)
Exceptional expenses (net) (6,793) (5,921) (15,959)
Net income tax paid (35) (29) (80)
------------------------------------ ----- ------------ ------------ ----------
Net cash used in operating
activities (11,560) (28,271) (37,908)
------------------------------------ ----- ------------ ------------ ----------
Investing activities
Investments in joint ventures - (500) (500)
Interest received 90 191 338
Proceeds on disposal of property,
plant and equipment (13) - 35
Purchases of property, plant
and equipment (291) (649) (894)
Purchase and capitalisation
of intangible assets (2,420) (6,803) (8,238)
------------------------------------ ----- ------------ ------------ ----------
Net cash used in investing
activities (2,634) (7,761) (9,259)
------------------------------------ ----- ------------ ------------ ----------
Financing activities
Proceeds from issuance of ordinary - 39 -
shares (net of expenses)
Share options and warrants
exercised 8 5 85
Interest paid (30) (67) (122)
Repayments of finance lease
liabilities (626) (355) (1,155)
------------------------------------ ----- ------------ ------------ ----------
Net cash used in financing
activities (648) (378) (1,192)
------------------------------------ ----- ------------ ------------ ----------
Net decrease in cash and cash
equivalents (14,842) (36,410) (48,359)
Cash and cash equivalents at
beginning of the period/year 42,089 88,801 88,801
Effect of exchange rate changes 78 976 1,647
------------------------------------ ----- ------------ ------------ ----------
Cash and cash equivalents at
end of the period/year 27,325 53,367 42,089
------------------------------------ ----- ------------ ------------ ----------
1. General information
Monitise plc ('the Company'), and its subsidiaries
(together 'the Group') is a specialist in financial
services technology primarily focused on accelerating
the digital transformation of banks and financial institutions.
The Group is headquartered in the UK and operates ventures
in the UK, US and Turkey.
The Company is a public limited company incorporated
and domiciled in England and Wales whose shares are
publicly traded on the Alternative Investment Market
('AIM') of the London Stock Exchange.
The condensed consolidated interim financial information
was approved for issue by the Board on 22 February
2017.
This condensed consolidated interim financial information
does not comprise statutory accounts within the meaning
of Section 434 of the Companies Act 2006. Statutory
accounts for the year ended 30 June 2016 were approved
by the Board on 7 September 2016 and delivered to the
Registrar of Companies. The Auditors' report on those
accounts was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
The condensed consolidated interim financial information
is neither audited nor reviewed by the auditors and
the results of the operations for the six months ended
31 December 2016 are not necessarily indicative of
the operating results for future operating periods.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these consolidated financial statements are set
out below. The policies have been applied consistently
unless otherwise stated. They are the same as those
used in preparing the consolidated financial statements
at 30 June 2016.
2.1. Basis of preparation
The condensed consolidated interim financial information
has been prepared under the measurement principles
of International Financial Reporting Standards ('IFRS')
as adopted by the European Union ('IFRS as adopted
by the EU'), using accounting policies and methods
of computation consistent, except as noted below, with
those set out in the Company's 2016 Annual Report and
Accounts. The financial statements have been prepared
under the historical cost convention, as modified,
where applicable, by the revaluation of financial assets
and financial liabilities (including derivatives) at
fair value through profit or loss. As permitted by
AIM rules, the Group has not applied IAS 34 'Interim
reporting' in preparing this interim report.
The Group changed the classification in the prior year
of certain marketing costs from operating expenses
to cost of sales to more appropriately reflect the
relationship of these costs to the related revenue
activity. The prior period comparatives have been restated
by GBP991,289 to reflect the revised classification.
Based on projections prepared of the Group's anticipated
future results, the Directors have reasonable expectations
that the Group will have adequate resources to continue
in existence for the foreseeable future. Therefore,
the Directors continue to adopt the going concern basis
in preparing this financial information.
2.2. Accounting policies
The accounting policies applied are consistent with
those of the annual financial statements for the year
ended 30 June 2016, as described in those annual financial
statements.
The following new standards, amendments to standards
or interpretations are mandatory for the first time
for the financial year beginning 1 July 2016, but are
not currently relevant to the Group, or have had no
material impact:
-- Amendments to IAS 1: "Presentation of financial
statements" on the disclosure initiative
-- Amendment to IAS 16 "Property, Plant and Equipment"
and IAS 38 "Intangible assets" on depreciation
and amortisation
-- Amendments to IAS 27: Equity Method in Separate
Financial Statements
-- Amendment to IFRS 11 "Joint Arrangements on Acquisition
of an Interest in a Joint Operation"
-- IFRS 14 "Regulatory Deferral Accounts"
-- Amendment to IFRS 10, IFRS 12 and IAS 28 "Investment
Entities": Applying the Consolidation Exception
-- Annual improvements to IFRSs 2012-2014
-- Amendments to IFRS 10 and IAS 28: Sale of Contribution
of Assets between an Investor and its Associate
or Joint Venture
-- Amendments to IAS 16 and IAS 41: Bearer Plants
The following new standards, amendments to standards
and interpretations have been issued but will not be
effective until financial years beginning on or after
1 July 2017:
Effective date
(subject to EU endorsement)
-- IFRS 15 "Revenue from Contracts 1 January 2018
with Customers"
-- IFRS 9 "Financial Instruments" 1 January 2018
-- IFRS 16 "Leases" 1 January 2019
The Group is currently assessing the impact of the
other standards listed above on its results, financial
position and cash flows.
The Group continues to monitor the potential impact
of other new standards and interpretations which may
be endorsed by the European Union and require adoption
by the Group in future accounting periods.
3. Critical accounting estimates and judgements
The preparation of the financial statements requires
the Group to make estimates, judgements and assumptions
that affect the reported amounts of assets, liabilities,
revenues and expenses and related disclosure of contingent
assets and liabilities. The Directors base their estimates
on historical experience and various other assumptions
that they believe are reasonable under the circumstances,
the results of which form the basis for making judgements
about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual
results may differ from these estimates under different
assumptions or conditions.
In the process of applying the Group's accounting policies,
management has made a number of judgements and estimations,
which have been consistent with those set out in the
Company's 2016 Annual Report and Accounts.
3.1. Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods and services
provided within the Group's ordinary activities, net
of discounts and sales taxes. It comprises user generated
revenues, product licences and development and integration
services.
User generated revenue relates to revenue generated
from all types of end-user activity and may take various
forms including per user fees, click fees, commissions
and revenue share, and includes associated managed
services. This revenue is recognised as the services
are performed.
Product licences are sales where the customer has the
ability to exploit the licenced functionality upon
delivery and include both certain term-based and perpetual
licences. These licence revenues are recognised as
a sale of a good once all of the below recognition
criteria have been met:
-- the Group has transferred to the buyer the significant
risks and rewards of ownership of the licence;
-- the Group retains neither continuing managerial
involvement to the degree usually associated
with ownership nor effective control over the
goods sold;
-- the amount of revenue can be measured reliably;
-- it is probable that the economic benefits associated
with the transaction will flow to the Group;
and
-- the costs incurred or to be incurred in respect
of the transaction can be measured reliably.
Revenue relating to development and integration services
contracted on a time and materials basis is recognised
as the services are performed. Revenue relating to
development and integration services identified as
a service contract, provided over a specified time
period, is recognised on a straight-line basis. Development
and integration service revenue delivered under a fixed
price contract is recognised on a percentage-of-completion
basis, based on the extent of work completed as a percentage
of overall estimated project cost, when the outcome
of a contract can be estimated reliably. Determining
whether a contract's outcome can be estimated reliably
requires management to exercise judgement and estimates
are continually reviewed as determined by events or
circumstances. Provision is made as soon as a loss
is foreseen.
Typically, a number of the above elements may be sold
together as a bundled contract. Revenue is recognised
separately for each component if it is considered to
represent a separable good or service and a fair value
can be reliably established. The Group may derive fair
value for its services based on a reliable cost estimate
plus an appropriate market-based margin. Where a product
licence is included within a bundled arrangement, the
residual value of the contract is ascribed to the product
licence after a fair value has been allocated to all
other components.
Amounts which meet the Group's revenue recognition
policy which have not yet been invoiced are accounted
for as accrued income whereas amounts invoiced which
have not met the Group's revenue recognition criteria
are deferred and are accounted for as deferred income
until such time as the revenue can be recognised. Management
makes an assessment of the certainty of any accrued
revenue amounts in determining how much revenue to
recognise.
3.2. Share-based payments
Judgement and estimation is required in determining
the fair value of shares at the date of award. The
fair value is estimated using valuation techniques
which take into account the award's term, the risk-free
interest rate and the expected volatility of the market
price of the Company's shares. Judgement and estimation
is also required to assess the number of options expected
to vest.
3.3. Going concern
The Directors have prepared projections of the Group's
anticipated future results based on their best estimate
of likely future developments within the business and
therefore believe that the assumption that the Group
is a going concern is valid. The financial information
has therefore been prepared on the 'going concern'
basis.
3.4. Development costs
The Group has capitalised internally generated intangible
assets as required in accordance with IAS 38. Management
have assessed expected contribution to be generated
from these assets and deemed that no adjustment is
required to the carrying value of the assets. The recoverable
amount of the assets has been determined based on value
in use calculations which require the use of estimates
and judgements. Management reviews the assets for impairment
on a regular basis.
3.5. Impairment of assets
IFRS requires management to undertake an annual test
for impairment of assets with indefinite lives, including
goodwill and, for assets with finite lives, to test
for impairment if events or changes in circumstances
indicate that the carrying amount of an asset may not
be recoverable.
Impairment testing is an area involving management
judgement, requiring assessment as to whether the carrying
value of assets can be supported by the fair value
less costs to sell or net present value of future cash
flows derived from such assets using cash flow projections
which have been discounted at an appropriate rate.
In calculating the net present value of the future
cash flows, certain assumptions are required to be
made in respect of highly uncertain matters including
management's expectations of growth and discount rates.
Changing the assumptions selected by management could
significantly affect the Group's impairment evaluation
and, hence, results. The Group's review includes the
key assumptions related to sensitivity in the cash
flow projections.
3.6. Deferred tax
Deferred tax assets and liabilities require management
judgement in determining the amounts to be recognised.
In particular, judgement is used when assessing the
extent to which deferred tax assets should be recognised,
with consideration given to the timing and level
of future taxable income.
3.7. Provisions
Management uses judgement to estimate the consideration
required to settle the present obligation at the
end of the reporting period, taking into account
the risks and uncertainties surrounding the obligation.
Judgement has been exercised with regard to the length
of period for which surplus properties remain vacant.
Judgement has been exercised in respect of the expected
settlement of other onerous contracts.
4. Segmental information
Reportable segment
Monitise's operating segments are reported based on the information reviewed by the
chief operating decision maker for the purposes of allocating resources and assessing
performance. The Board of Directors is the Group's chief operating decision maker.
The Board of Directors considers revenue, cost of sales, operating costs, exceptional
costs and EBITDA of the Group as a whole when assessing the performance of the business
and making decisions about the allocation of resources. In addition, the Board reviews
revenue split by business unit, products and geographies to assist with the allocation
of resources. During the prior financial year the Group changed the internal reporting
from one operating segment to six in order to more accurately reflect the way that
the business now operates and to provide greater insight and focus on each type of
activity.
Segment revenues and results
The following is an analysis of the Group's revenue and results by reportable segment
for the period ended 31 December 2016:
FINkit Europe Americas Big MEA Content Unallocated Total
Radical
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- --------- --------- -------- -------- ------------ ---------
External
revenue - 9,780 6,312 1,876 3,161 7,029 - 28,158
Inter-segment
revenue - 95 - 87 551 - (733) -
-------------------- -------- -------- --------- --------- -------- -------- ------------ ---------
Total revenue - 9,875 6,312 1,963 3,712 7,029 (733) 28,158
-------------------- -------- -------- --------- --------- -------- -------- ------------ ---------
EBITDA (2,693) 1,314 107 (802) 275 3,193 (1,045) 349
Depreciation,
amortisation
and impairments (10,854)
Other exceptional
items 7,381
Share of -
loss of joint
ventures
Share-based
payments (4,440)
Net finance
income 96
-------------------- -------- -------- --------- --------- -------- -------- ------------ ---------
Loss before
income tax (7,468)
-------------------- -------- -------- --------- --------- -------- -------- ------------ ---------
The following is an analysis of the Group's revenue
and results by reportable segment for the period
ended 31 December 2015:
FINkit Europe Americas Big MEA Content Unallocated Total
Radical
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
External
revenue - 15,210 9,962 1,465 2,188 4,534 - 33,359
Inter-segment
revenue - 358 - 1,051 2,104 160 (3,673) -
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
Total revenue - 15,568 9,962 2,516 4,292 4,694 (3,673) 33,359
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
EBITDA (1,322) (7,091) (3,429) (873) 988 933 (9,400) (20,194)
Depreciation,
amortisation
and impairments (179,986)
Other exceptional
items (980)
Share of
loss of joint
ventures (29)
Share-based
payments (10,407)
Net finance
income 1,055
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
Loss before
income tax (210,541)
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
The following is an analysis of the Group's revenue
and results by reportable segment for the period
ended 30 June 2016:
FINkit Europe Americas Big MEA Content Unallocated Total
Radical
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
External
revenue 463 29,001 19,088 4,218 5,160 9,635 - 67,565
Inter-segment
revenue - 1,340 - 1,504 2,916 307 (6,067) -
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
Total revenue 463 30,341 19,088 5,722 8,076 9,942 (6,067) 67,565
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
EBITDA (3,827) (4,870) (3,093) (1,221) 1,050 2,745 (10,407) (19,623)
Depreciation,
amortisation
and impairments (205,216)
Other exceptional
items (3,492)
Share of
loss of joint
ventures (58)
Share-based
payments (16,468)
Net finance
income 1,775
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
Loss before
income tax (243,082)
-------------------- -------- -------- --------- --------- -------- -------- ------------ ----------
5. Operating loss
This is stated after charging/(crediting):
6 months 6 months Year
ended ended ended
31 31 30
December December June
2016 2015 2016
Note GBP'000 GBP'000 GBP'000
----------------------------------------- ------------- ----------- ---------- ------------
Depreciation 866 2,784 2,814
Impairment of property, plant
and equipment - 2,630 3,268
Amortisation 8 9,988 7,274 25,465
Impairment of intangible assets 8 - 166,798 172,728
Impairment of investment in
joint venture - 500 941
Share-based payments 4,440 10,407 16,468
Exceptional items 6 (7,381) 980 3,492
----------------------------------------- ------------- ----------- ---------- ------------
6. EBITDA
EBITDA is defined as operating loss before exceptional
items, depreciation, amortisation, impairments and share-based
payments charge.
Exceptional items comprise: 6 months 6 months Year
ended ended ended
31 31 30 June
December December
2016 2015 2016
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------- ----------- ---------- ------------
Exceptional income - (5,000) (6,874)
Onerous contracts (7,212) (2,382) (3,190)
Surplus property costs (986) 2,312 4,382
Restructuring costs - 5,964 8,734
Strategic Review and corporate
development costs 817 86 440
----------------------------------------- ------------- ----------- ---------- ------------
Total exceptional items (7,381) 980 3,492
----------------------------------------- ------------- ----------- ---------- ------------
Onerous contracts relate to those contracts under which
the unavoidable costs of meeting the obligations under
the contract exceed the economic benefit expected to
be received under it. In particular, obligations associated
with a number of contracts with a third party IT and
business services provider were provided in prior periods.
The credit for onerous contracts in the current period
reflects the settlement of the remainder of these obligations
at amounts less than previously provided.
Restructuring costs are associated with a number of
restructuring activities undertaken and principally
relate to redundancy and termination costs. There were
no restructuring costs incurred in the period beyond
what had already been provided for in the prior year.
In addition, the associated property restructuring costs
in the prior year resulted in a charge for several onerous
property lease contracts. The credit for surplus property
costs in the period reflects the successful assignment
of the majority of the remaining surplus properties.
Strategic Review and corporate development costs related
primarily to professional advisor fees incurred in respect
of a number of corporate development projects.
7. Loss per share
Basic and diluted
Basic loss per share is calculated by dividing the loss
attributable to owners of the parent by the weighted
average number of Ordinary shares in issue during the
year. As the Group is loss-making, any share options
in issue are considered to be 'anti-dilutive'. As such,
there is no separate calculation for diluted loss per
share.
Reconciliations of the loss and weighted average number
of shares used in the calculation are set out below:
6 months 6 months Year
ended ended ended
31 31 30
December December June
2016 2015 2016
----------------------------------------- ------------- ----------- ---------- ------------
Loss for the period/year (GBP'000) (7,003) (205,408) (233,371)
Weighted average number of shares
in issue ('000) 2,294,308 2,199,414 2,215,733
----------------------------------------- ------------- ----------- ---------- ------------
Basic and diluted loss per share
(pence) (0.3p) (9.3p) (10.5p)
----------------------------------------- ------------- ----------- ---------- ------------
8. Intangible
assets
Purchased
Intellectual and Capitalised
acquired
Customer property Acquired software development
Goodwill contracts rights technology licences costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
For the period
ended 31
December
2015:
Cost:
As at 1 July
2015 204,930 46,167 277 27,077 17,883 66,173 362,507
Exchange
differences 7,989 1,478 - 649 1 570 10,687
Additions - - - - 1,695 4,966 6,661
Disposals - - (13) - (1,517) - (1,530)
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
As at 31
December
2015 212,919 47,645 264 27,726 18,062 71,709 378,325
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
Accumulated
amortisation
and impairment:
As at 1 July
2015 41,770 16,819 252 15,553 15,347 56,493 146,234
Exchange
differences 1,066 747 - 458 11 141 2,423
Charge - 2,906 8 2,082 1,282 996 7,274
Impairment 157,060 7,464 - 2,200 74 - 166,798
Disposals - - (13) - (1,517) - (1,530)
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
As at 31
December
2015 199,896 27,936 247 20,293 15,197 57,630 321,199
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
Net book value:
As at 1 July
2015 163,160 29,348 25 11,524 2,536 9,680 216,273
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
As at 31
December
2015 13,023 19,709 17 7,433 2,865 14,079 57,126
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
For the period
ended 30 June
2016:
Cost:
As at 1 July
2015 204,930 46,167 277 27,077 17,883 66,173 362,507
Exchange
differences 25,226 5,743 - 2,352 305 1,257 34,883
Additions - - - - 1,988 6,333 8,321
Disposals (183,230) (8,595) (277) (6,422) (11,525) (4,262) (214,311)
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
As at 30 June
2016 46,926 43,315 - 23,007 8,651 69,501 191,400
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
Accumulated
amortisation
and impairment:
As at 1 July
2015 41,770 16,819 252 15,553 15,347 56,493 146,234
Exchange
differences 18,208 4,096 - 1,963 335 527 25,129
Charge - 15,162 15 6,017 2,253 2,018 25,465
Impairment 162,738 7,464 10 2,200 316 - 172,728
Disposals (183,230) (8,595) (277) (6,422) (11,525) (4,262) (214,311)
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
As at 30 June
2016 39,486 34,946 - 19,311 6,726 54,776 155,245
----------------- ---------- ---------- ------------- ----------- ---------- ------------ ----------
Net book value:
As at 1 July 2015 163,160 29,348 25 11,524 2,536 9,680 216,273
-------------------------- --------- --------- --- --------- ------ ------- ---------
As at 30 June 2016 7,440 8,369 - 3,696 1,925 14,725 36,155
-------------------------- --------- --------- --- --------- ------ ------- ---------
For the period
ended 31 December
2016:
Cost:
As at 1 July 2016 46,926 43,315 - 23,007 8,651 69,501 191,400
Exchange differences (140) (996) - (377) (532) 634 (1,411)
Additions - - - - 352 1,967 2,319
Disposals (30,647) (25,853) - (13,855) 83 - (70,272)
-------------------------- --------- --------- --- --------- ------ ------- ---------
As at 31 December
2016 16,139 16,466 - 8,775 8,554 72,102 122,036
-------------------------- --------- --------- --- --------- ------ ------- ---------
Accumulated amortisation
and impairment:
As at 1 July 2016 39,486 34,946 - 19,311 6,726 54,776 155,245
Exchange differences (139) (508) - (348) (620) 427 (1,188)
Charge - 3,342 - 2,379 1,025 3,242 9,988
Impairment - - - - - - -
Disposals (30,647) (25,853) - (13,855) 83 - (70,272)
-------------------------- --------- --------- --- --------- ------ ------- ---------
As at 31 December
2016 8,700 11,927 - 7,487 7,214 58,445 93,773
-------------------------- --------- --------- --- --------- ------ ------- ---------
Net book value:
As at 1 July 2016 7,440 8,369 - 3,696 1,925 14,725 36,155
-------------------------- --------- --------- --- --------- ------ ------- ---------
As at 31 December
2016 7,439 4,539 - 1,288 1,340 13,657 28,263
-------------------------- --------- --------- --- --------- ------ ------- ---------
9. Net funds
31 December 31 December 30
June
2016 2015 2016
GBP'000 GBP'000 GBP'000
-------------------------- ------------ ------------ --------
Cash at bank and in hand 27,325 53,367 42,089
Finance leases (1,173) (2,648) (1,809)
--------------------------- ------------ ------------ --------
Net funds 26,152 50,719 40,280
--------------------------- ------------ ------------ --------
10. Provisions
Onerous
Re-organisation contracts Total
Group GBP'000 GBP'000 GBP'000
--------------------------------------------- ---------------- ------------ --------
As at 1 July 2016 2,204 16,676 18,880
Additional provisions
in the year 36 246 282
Release of provision (67) (9,070) (9,137)
Utilisation of provision (588) (5,878) (6,466)
Exchange differences 60 78 138
------------------------------------------------ ---------------- ------------ --------
As at 31 December
2016 1,645 2,052 3,697
------------------------------------------------ ---------------- ------------ --------
31 December 31 December 30 June
2016 2015 2016
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------------- ------------ --------
Due within one
year 1,227 16,341 10,864
Due after one year 2,470 8,002 8,016
------------------------------------------------ ---------------- ------------ --------
Onerous contracts include provisions for surplus properties
as a result of the reorganisations undertaken and
obligations associated with a number of contracts
with a third party IT and business services provider.
Additionally, provision has been made for the ongoing
costs of closing the Group's Far East investments
and the finalisation of the restructuring activities.
The release of provision related to both the successful
renegotiation of the remaining onerous contracts with
a third party IT and business services provider and
also the successful assignment of the majority of
the remaining surplus properties.
11. Financial liabilities
31 December 31 December 30 June
2016 2015 2016
GBP'000 GBP'000 GBP'000
-------------------------------------------- -------------- ------------- --------------------
Due within one year
Finance leases 613 1,023 1,002
-------------------------------------------- -------------- ------------- --------------------
Financial liabilities due
within one year 613 1,023 1,002
-------------------------------------------- -------------- ------------- --------------------
Due after one year
Finance leases 560 1,625 807
-------------------------------------------- -------------- ------------- --------------------
Financial liabilities due
after one year 560 1,625 807
-------------------------------------------- -------------- ------------- --------------------
Total financial liabilities 1,173 2,648 1,809
-------------------------------------------- -------------- ------------- --------------------
12. Ordinary shares, share
premium and other reserves
Allotted and fully paid GBP0.01
nominal value shares
Ordinary Share
Number shares premium
of shares GBP'000 GBP'000
-------------------------------------------- -------------- ------------- ------------------
As at 1 July 2015 2,168,231,436 21,682 383,721
Issue of new shares 79,091,540 791 -
Exercise of share options
and warrants 4,620,037 46 -
-------------------------------------------- -------------- ------------- ------------------
As at 1 July 2016 2,251,943,013 22,519 383,721
Issue of new shares 43,770,351 438 -
Exercise of share options
and warrants 428,266 4 4
-------------------------------------------- -------------- ------------- ------------------
As at 31 December 2016 2,296,141,630 22,961 383,725
-------------------------------------------- -------------- ------------- ------------------
As at 1 July 2015 2,168,231,436 21,682 383,721
Issue of new shares 35,629,905 357 -
Exercise of share options
and warrants 526,371 5 -
-------------------------------------------- -------------- ------------- ------------------
As at 31 December 2015 2,204,387,712 22,044 383,721
-------------------------------------------- -------------- ------------- ------------------
Reconciliation
of shares
issued
Ordinary
Number of Ordinary shares Share Merger
to be
shares shares issued premium reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------------- --------- -------------- ------------- -------- --------
As at 1 July
2015 2,168,231,436 21,682 2,511 383,721 228,672 636,586
Employee
share-based
payment
exercises 4,620,037 46 - - - 46
Issue of shares
relating to
prior year
business
combinations 79,091,540 791 - - 9,511 10,302
----------------- -------------- --------- -------------- ------------- -------- --------
As at 1 July
2016 2,251,943,013 22,519 2,511 383,721 238,183 646,934
Employee
share-based
payment
exercises 428,266 4 - 4 - 8
Issue of shares
relating to
prior year
business
combinations 43,770,351 438 (2,511) - 2,466 393
----------------- -------------- --------- -------------- ------------- -------- --------
As at 31
December
2016 2,296,141,630 22,961 - 383,725 240,649 647,335
----------------- -------------- --------- -------------- ------------- -------- --------
13. Reconciliation of net
loss to net cash used in operating
activities
6 months 6 months Year
ended ended ended
31 December 31 December 30
June
2016 2015 2016
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ ----------
Loss before income tax (7,468) (210,541) (243,082)
Adjustments for:
Depreciation and impairments
to property, plant and equipment 866 5,414 6,082
Amortisation and impairments
to intangible assets 9,988 174,072 198,193
Impairment to joint venture - 500 941
Share-based payments 4,440 10,407 16,468
Profit on disposal of property,
plant and equipment - - (35)
Finance costs - net (96) (1,055) (1,775)
Exceptional items (net) (7,381) 980 3,492
Share of post-tax loss of
joint ventures - 29 58
-------------------------------------- ------------ ------------ ----------
Operating cash flows before
movements in working capital 349 (20,194) (19,658)
(Increase)/decrease in receivables (710) 4,411 15,292
Decrease in payables (3,927) (5,216) (19,100)
(Decrease)/increase in provisions (444) (1,322) 1,597
-------------------------------------- ------------ ------------ ----------
Cash used in operations (4,732) (22,321) (21,869)
-------------------------------------- ------------ ------------ ----------
14. Commitments, contingencies and guarantees
Legal contingencies
No member of the Group is or has been involved in
any governmental, legal or arbitration proceedings
and the Directors are not aware of any such proceedings
pending or threatened by or against the Group during
the 12 months preceding the date of these financial
statements which may have or have had, in the recent
past, a significant effect on the financial position
or profitability of the Group.
Mobile VPT Limited has issued a UK patent infringement
claim against Monitise International Limited (formerly
known as Monitise Limited) and other related parties.
Following advice from leading counsel, the Directors
believe that Monitise's business activities in the
UK do not infringe any valid claim of Mobile VPT's
patent and that the Mobile VPT patent may be invalid.
Monitise continues to monitor the status of the proceedings
since they were stayed in October 2007 but to date,
and in light of the advice received from leading
counsel, no provision has been reflected in the financial
statements.
Guarantees
There are a number of operational and financial guarantees
given by the Company and certain subsidiary companies
in each case on behalf of other subsidiary entities.
The Company had no other commitments or contingencies
at the end of the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUCUPUPMUUW
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