Bango (AIM: BGO), the global platform for data-driven commerce,
today announces its unaudited preliminary results for the 12 months
ended 31 December 2022.
Financial highlights:
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Revenue up 38% to $28.5M (FY21 $20.7M). |
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Accelerated organic growth in annual recurring revenue1 (ARR)
to $5.0M (2021: $1.1M), driven by multi-year SaaS contract wins
with T-Mobile, Televisa Univision and Liberty Global, alongside the
launch of Verizon +Play in December 2022. |
• |
Trading momentum in 2023 has continued, in particular for Bango
Digital Vending Machine (“DVM”) technology. 2023 exit ARR is now
expected to reach $10M, comfortably ahead of previous $7M
guidance. |
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End User Spend (EUS) $5.6B (2021 $4.1B). Run rate
EUS exiting 2022 was $8.6B/yr. |
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Adjusted EBITDA2 of $5.0M (2021 $6.1M), ahead
of market expectations3, including the initial negative
contribution from the DOCOMO Digital acquisition as planned. |
• |
$11M of the planned $21M/year cost synergies from the acquisition
of DOCOMO Digital in August 2022 had been executed as of 31 Dec
2022. The acquisition remains on track to deliver $10M of
incremental Adjusted EBITDA in 2024. |
• |
Cash at period end of $12.7M (30 June 2022: $5.7M). This includes
$2.9M of restricted cash related to a discontinued business segment
from the DOCOMO Digital acquisition. |
Adjustments from 24 January 2023 Trading Update
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Adjusted EBITDA |
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$0.9M higher largely due to further restructuring costs related to
the acquisition of DOCOMO Digital moving to exceptional costs. |
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Revenue |
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$1.1M from the DOCOMO Digital acquisition has been reclassified as
other income. |
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The $1.1M cash has been received in full. |
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A $3.3M non-recurring fee (and the associated costs) connected to
one large contract that commenced in 2H 2022 will now be recognized
across 2022-2024 rather than in 2022, based on an alternative
interpretation of IFRS 15. |
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The $3.3M cash has been received in full. |
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There is no impact on ARR or profit. |
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There is no impact to any prior periods or guidance. |
Operational highlights:
Bango Payments & DOCOMO Digital
Acquisition |
• |
Transformational acquisition of DOCOMO Digital in August 2022
solidifies Bango market leadership. The deal brings significant
scale to the business, adding an additional $3.5B EUS and $16M in
annual revenue from 2023, as well as over 100 new customers
including Telefonica, Hutchison, Discovery+, Jetstar &
Shopify. |
• |
Migration of services from the legacy DOCOMO Digital system to the
Bango Platform is underway and on track to complete in early
2024. |
• |
Long-term strategic agreement with NTT DOCOMO (the world's largest
provider of direct carrier billing) for integration of global
merchants into Japan. |
• |
Strong positive feedback from existing and acquired customers,
creating new sales opportunities across the business. |
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Digital Vending Machine |
• |
New Digital Vending Machine (DVM) deals with T-Mobile, Televisa
Univision and Liberty Global. These, alongside the December 2022
launch of Verizon +Play, drove ARR growth. |
• |
44 new organic merchant customers including McAfee, HBO, Paramount,
NFL and Duolingo, plus major win in June of the 'Global Tech
Leader'. These merchants can now offer their products to all the
operators connected to the Bango Platform. |
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Strong pipeline of DVM deals expected to close during 2023. |
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Bango Audiences |
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Growing demand for Bango Audiences in existing sectors including
gaming and more broadly with e-commerce retailers such as
Adidas. |
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Sustainability |
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Record employee engagement score of 83%. |
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Reduced carbon intensity by 12% and committed to net zero by
2040. |
Post period highlights:
• |
New DVM contract win with Benefit One, the leading employee
benefits provider in Japan. This highlights an expanding market
opportunity beyond the telco space. Using the DVM, Benefit One will
offer its 10M+ customers bundled subscription services as
additional employee incentives. |
• |
Dropbox joined the Bango Platform to grow its subscriber base
globally. Productivity services like Dropbox broaden the range of
subscription products for offers and bundles, alongside traditional
TV & music streaming services. |
Outlook:
• |
Trading in the current year has started well, and the Board remains
confident in Bango prospects for the year ahead. |
• |
Well placed to grow ARR from existing and new Bango DVM customers.
The current industry move to online subscriptions has the potential
to accelerate demand for DVM technology across multiple sectors
including telcos, employee benefits, utilities, financial services
and retailers. |
• |
Board now expects Bango to exit 2023 with $10M of ARR, providing
good visibility of sustainable, profitable growth. |
• |
Well-funded to deliver on the growth strategy and enhance Bango
profit margins. |
Investor Presentation:
Bango is hosting a presentation, open to all
existing and potential shareholders, at 10.30am today. Investors
can sign up to Investor Meet Company for free and register to join
the call here:
https://www.investormeetcompany.com/bango-plc/register-investor
Bango CEO, Paul Larbey, said:
“2022 was a transformative year for Bango. The
business delivered double digit revenue growth together with
accelerated progress in annual recurring revenue, supporting strong
forward momentum.
At the October 2021 investor strategy day, I
talked about Bango approaching an inflection point in its growth
trajectory. In 2022, we passed though that inflection point driven
by rapid, organic growth, and then accelerated our strategy by 2
years with the transformational acquisition of DOCOMO Digital.
The acquisition not only increases the scale of
Bango financially and operationally, but it solidifies our leading
position in the market. Feedback from customers and partners has
been overwhelmingly positive as we position ourselves to deliver
even greater value to the world’s largest online merchants and
their partners.
There is a large and accessible market
opportunity ahead for Bango. We enter the remainder of the year in
a strong position with a healthy pipeline and a profitable and cash
generative business which, combined with our strong balance sheet,
enables us to continue investing in our growth strategy. I am
hugely excited for the year ahead as we continue to focus on
helping our customers and partners increase their revenues,
fuelling further growth for Bango and delivering increasing value
for our shareholders.”
Notes:
The Annual Report, including full accounts, will be published
and sent to shareholders shortly.
1 Annualized December revenues derived from ongoing, repeating
contracts.
2 Adjusted EBITDA is earnings before interest,
tax, depreciation, amortization, share based payment charge,
negative goodwill and exceptional items.
3 Market consensus can be found here:
https://bangoinvestor.com/analyst-consensus/
The information contained within this
announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulations (EU) No.596/2014.
Upon the publication of this announcement, this inside information
is now considered to be in the public domain. The person
responsible for making this announcement on behalf of Bango
is Paul Larbey, Chief Executive Officer.
Contact Details:
Bango PLC |
Singer Capital Markets (Nominated Adviser and Joint
Broker) |
Stifel Nicolaus Europe Limited (Joint Broker) |
+44 1223 617 387 |
+44 20 7496 3000 |
+44 20 7710 7600 |
investors@bango.com |
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Paul Larbey, CEO |
Harry Gooden |
Nick Adams |
Matt Garner, CFO |
Jen Boorer |
Alex Price |
Anil Malhotra, CMO |
Asha Chotai |
Ben Burnett |
Rebecca Jamieson, IR |
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About Bango
The world's largest online merchants, including
Amazon, Google and Microsoft, use Bango technology to acquire more
paying users.
Bango has developed unique purchase behavior
technology that enables millions more users to buy the products and
services they want, using innovative methods of payment including
carrier billing, digital wallets and subscription bundling. Bango
harnesses this purchase activity into valuable marketing segments,
called Bango Audiences. Merchants use these audiences to target
their marketing at paying customers based on their purchase
behavior. Better targeting increases spend through the Bango
payments business, in turn generating more data insights, creating
a powerful virtuous circle that drives continuous growth. Everyone
connected to the Bango Platform thrives as the virtuous circle
grows.
Bango, the technology behind every payment
choice. For more information, visit www.bangoinvestor.com
Chair statement:
In nuclear physics, a chain reaction can occur
if a single nuclear reaction causes an average of one or more
subsequent nuclear reactions, leading to a self-propagating series
of reactions. Critical mass is the smallest amount of material
needed for a sustained nuclear chain reaction – which depends on
its structure, enrichment and surroundings.
The Bango Platform, following the acquisition of
DOCOMO Digital, has now reached its own critical mass with its
unique structure, financial strength, and its surrounding partners.
Bango is unleashing explosive growth with rising energy, momentum
and awesome power that is harnessed by merchants to grow their
businesses faster.
$200B/year of digital services will flow though
telcos in the coming year. Bango is expanding into this huge market
opportunity as our unique technology and market position replaces
legacy methods. Without Bango, the market is large but fragmented
and inefficient. Hundreds of one-to-one integrations, with no easy
way for consumers to get to grips with their multiple
subscriptions.
The emergence of the Bango Platform as a global
standard, and its innovative Digital Vending Machine, is catalyzing
a new wave of efficiency and effectiveness for merchants, telcos
and consumers. Adoption of Bango technology is accelerated by the
increasing demand from consumers for greater choice and better
value in online content and services. With leading telcos such as
NTT DOCOMO, Verizon and LGI backing the Bango Platform, merchants
offering these services have confidence in the Bango vision. As one
of these said to me recently: “At last there is a standard model
that the industry can rally around to drive the next wave of
growth.”
The flow of digital commerce enabled by Bango
doubled over 2022 to a run rate of well over $8B/year. The power of
a common platform means the additional revenue generated by this
growing volume does not add extra cost, so revenue flows through to
operating profit, providing Bango with increasing firepower to
drive more growth.
Every new adoption of the Bango Platform adds
value to those already on the Platform, so existing customers
encourage more customers to join.
Bango proved that a Platform approach
streamlines assimilation when we acquired US based Billtomobile in
2016. Dozens of customers were seamlessly migrated to the Bango
Platform within sixteen months, enabling the closure of legacy
systems and software and delivering the expected synergies. Eight
months into the process with the DOCOMO Digital acquisition, and
with the added benefit of critical mass and market momentum, the
team is on plan and synergies are flowing. This should give you
confidence that Bango is in a strong position to drive further
consolidation and able to add new capabilities into the Bango
Platform as the chain reaction effect drives increasing market
share.
Part of my role as Chair is to catalyze high
level relationships with companies that are synergistic with Bango.
In addition to developing our relationships with industry giants
like NTT DOCOMO in Japan and NHN Corporation in Korea, we continue
to innovate. Beyond the existing $200B digital services
opportunity, the broader subscription economy is growing fast.
There is nothing to prevent Bango expanding into this space in
future, building on our success in digital.
The importance of Bango is not just shown by its
financial metrics. In the coming year, you will see the increasing
adoption of Bango Platform to deliver the Digital Vending Machine
model across the industry and the increasing adoption of the
privacy safe Bango model for Purchase Behavior Targeting. I look
forward to working with the Board as Bango progresses through this
significant value inflection point.
Ray AndersonExecutive Chair
CEO statement:
Introduction
2022 was a transformative year for Bango.
1. |
The traction with the Digital Vending Machine increased 5x over the
year. This technology enables telcos to make life easier for all of
us by creating a single portal to manage subscriptions. |
2. |
The acquisition of DOCOMO Digital and the signing of a new, long
term strategic agreement with NTT DOCOMO solidified our position as
a leader in payments, accelerating the Bango strategy by over two
years and supporting our medium-term goal of moving towards
hundreds of millions of dollars of revenue. |
3. |
Bango Audiences, implementing unique Purchase Behavior Targeting
(“PBT”) technology, expanded its customer base beyond App
Developers targeting new paying users, to major brands such as
Adidas who are focused on the early identification of prospective
customers higher up the marketing funnel. |
I have always believed in the momentum of Bango.
In Physics, momentum is velocity multiplied by mass. Bango has
always had the velocity; moving quickly to capture new markets with
technologies such as Purchase Behavior Targeting and solutions like
the Digital Vending Machine. What 2022 brought was a substantial
increase in mass; a doubling in scale with an EUS run rate ending
2022 of $8.6B/year. This serves only to compound our momentum,
accelerating Bango growth.
This momentum delivered 38% revenue growth in a
year where a strong dollar reduced the financial benefit from
contracts in Euros and Japanese Yen and inflation & interest
rates soared bringing a cost-of-living crisis at a level not seen
for a generation. The momentum of Bango makes these major events
minor bumps in the road rather than barriers or obstacles.
Bango progress is evident not only in the
financial statements and major customer wins but in the recognition
from across the industry. Awards such as “Diversity Champion” at
the AIM Awards and “Quoted Company of the Year” at the Business
Weekly Awards, in addition to numerous product awards, provide
acknowledgement that Bango is an exceptional business; a point
further reinforced by our annual employee engagement score which
increased yet again to 83%.
Digital Vending Machine
How many subscriptions do you pay for? A recent
Bango survey revealed that 78% of consumers want a single place to
manage their subscriptions with most voting for their telco,
broadband or PayTV provider to offer this service. This is the
problem the Bango Digital Vending Machine solves.
The Digital Vending Machine is the Bango
Platform connecting multiple subscriptions to one consumer bill,
for example, a telco bill, in a single online experience. The telco
chooses which subscription products to stock the Digital Vending
Machine with, and provides a way to pay, but it is the Bango
Platform that ‘dispenses’ those subscriptions.
The Digital Vending Machine has created a
recurring revenue stream for Bango. The telco providers pay a setup
fee and then a monthly or quarterly license fee that scales with
the number of subscriptions being managed. More users and more
subscriptions per user moves telcos into the next license tier
increasing Bango recurring revenue.
The world’s largest telcos and merchants rely on
Bango to drive their growth. In 2022, as a direct result of the
Digital Vending Machine telco wins, 44 merchants joined the Bango
Platform. This momentum puts clear distance between us and the
nearest competitor in terms of connected merchants. Each new
merchant makes the Bango proposition even more compelling to
prospective customers. The addition of the “Global Technology
Leader” back in June 2022 added the one missing logo to the list of
mega merchants in the Digital Vending Machine.
The power of the merchants connected to the
Bango Platform along with the rich feature set have led to some of
the world’s largest telcos including BT, Verizon, T-Mobile US,
Optus Australia and Liberty Global adopting the Digital Vending
Machine. Bango is rapidly becoming the de facto standard.
Payments & DOCOMO Digital
Acquisition
The Bango Payments business allows global
merchants to find new customers through alternative payment methods
– simply put, this is anything other than credit cards, including
both wallets and carrier billing. This business is built on the
same Bango Platform that powers the Digital Vending Machine and
Bango Audiences. Bango charges a percentage of the retail price to
process the payment transaction. The organic growth of this
business, coupled with the leverage in the Platform, has allowed us
to generate profits and cash that we have chosen to invest in new
growth areas such as the Digital Vending Machine and Bango
Audiences. During 2022 the business continued to grow and the
“Global Technology Leader” win announced back in June added another
leading app store to the list of large global merchants using the
Bango Platform.
In August, the strategic value of the Bango
Platform was further evidenced when NTT DOCOMO (the world’s largest
carrier billing operator) selected Bango as the acquirer of DOCOMO
Digital and simultaneously signed a multi-year strategic agreement
that positions Bango as the platform to connect global merchants
into Japan. This acquisition brought new operators such as
Telefonica, Three and Millicom to Bango for the first time. It also
solidified our position with existing operators such as Vodafone.
The same story is reflected on the merchant side, Bango and DOCOMO
Digital were, together, number 1 & 2 for both Google Play and
Amazon integrations – when you combine the number 1 & 2 in any
business, a clear leader emerges.
The acquisition accelerated our growth by over
two years. It brought additional data to monetize in Bango
Audiences, along with more merchants and operators for the Digital
Vending Machine, adding further momentum to the Bango virtuous
circle. On announcing the acquisition, we were very clear that in
2024 it would bring $16M of revenue and $10M of EBITDA. To get to
this we must realize $21M of synergies by combining the companies
and migrating all the routes to the Bango Platform. In the first
four months we executed over half of the targeted savings. More
work is needed but, although time consuming, it is neither
difficult nor complex. The hard steps are behind us and we are
executing to plan.
Bango Audiences
Payment data from the Bango Platform, along with
third party data sources (such as credit card processors), are
combined using unique Bango Purchase Behavior Targeting (PBT)
technology to create Audiences of users, which allow marketers to
target their marketing campaigns at consumers who have actually
paid for similar products previously. Bango Audiences are much more
effective (2-9x) than relying on soft indicators such as “searched
for” or “like” data provided by platforms such as Google and
Facebook.
2022 was certainly not a dull year for
marketers; the aftershocks of Apple’s IDFA privacy changes, along
with Facebook pricing and a certain degree of chaos at Twitter,
created lots of uncertainty. One thing is certain however; as the
dust settled, the value of Bango Audiences and PBT became even
clearer.
PBT is a new concept to many marketing teams. In
previous years, our own marketing campaigns have focused on raising
awareness about the value this technology brings to ad targeting.
In 2022, amid the turmoil, the industry started to see the benefits
of Bango technology for itself as Bango won both the “Most
Effective User Acquisition Company” at the Mobile Marketing Awards
and the Sales & Marketing Technology Award ‘The Sammy’ for Ad
Technology Product of the Year.
In 2022, we added support for Snapchat to the
Bango Audiences product and, for the first time, attracted brands
such as Adidas, who used Bango Audiences both at the bottom of the
marketing funnel to drive the conversion of paying users and higher
up the funnel in their brand awareness campaigns to find more
interested and engaged customers.
2022 also saw the beginnings of Digital Vending
Machine merchants becoming Bango Audience customers as they look to
find new users for their subscription services.
Outlook
The Digital Vending Machine is our number one
priority for 2023. We will invest to reduce sales cycles and
deployment times, speeding-up the start of license revenue.
Investments will include adding new features to the product and
“pre-stocking” the vending machine with subscriptions using the
Bango e-distribution (“e-Disti”) model. The e-Disti model
standardizes the technical and commercial model for selling digital
subscriptions through channel partners. Bango acts as the merchant,
supplying subscription services directly into the vending machine.
The e-Disti model provides a faster launch of services and has
already been successful with merchants such as Microsoft and
McAfee.
We had previously stated our expectation was for
$7M of ARR by the end of 2023. Given the progress so far and
ongoing traction we now expect to reach $10M by 31 December 2023
(double that reported for December 2022).
Bango Audiences will focus on growing its share
of the largest app developers’ ad spend and expanding into brand
marketing higher up the funnel. And, by using Bango Audiences to
help Digital Vending Machine merchants target new customers, we not
only generate revenue from the use of Bango Audiences but create
more subscriptions to drive up ARR.
Inside Bango, our goals for 2023 are grouped in
to three categories:
• |
Growth – Accelerating our growth |
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Simplify – The team, processes and tools to deliver growth with
increased profitability |
• |
Sizzle – Making Bango THE winner - the company everyone wants to
work with or at |
The growth will be evident both in the
announcements of new customers as well as in the financials. The
simplification of the business will be evident in the EBTIDA as the
cost synergies from the DOCOMO Digital Acquisition drop to the
bottom line. The sizzle comes from the accelerating momentum of the
Platform. The intersection of consumer subscription services
delivered through a channel (e.g. a telco) is one where a single
platform such as Bango will dominate.
We are excited by the opportunity as we enter
the next stage of our growth journey, our 2023 results will
demonstrate progress on our growth and simplify objectives, as for
sizzle, ultimately, you will need to judge that for yourself – the
Bango team certainly feels it.
Paul Larbey Chief Executive
Officer
CFO statement:
This financial year saw Bango continue to grow
revenue organically, growth that was accelerated by the acquisition
of DOCOMO Digital Limited at the end of August 2022. Even with
increased and some replicated costs arising from the acquisition,
the enlarged Bango still returned a positive Adjusted EBITDA and
remained cash positive with no debt.
Bango revenue model
Bango continues to generate revenue from several
streams. Transactional revenue which covers the transactional
payments business and data monetization through Bango Audiences’
purchase behavior targeting and non-transactional revenue which
encompasses platform license and integration fees for the Digital
Vending Machine. Where the business engages in distribution
activities, it assesses the nature of that business against the
Agent/Principal principles outlined in IFRS15 (Revenue from
Contracts with Customers). Bango has been assessed to act in some
cases as a principal and others as agent dependent upon its
involvement.
Acquisition of DOCOMO
Digital
On 29 August 2022, Bango completed the
acquisition of the entire issued share capital of DOCOMO Digital
Limited and its associated Group from NTT DOCOMO, Inc. of Japan.
This acquisition has accelerated Bango growth by over two years and
has added new customers, routes and relationships.
During the acquisition process, Bango undertook
robust due diligence on the acquired entities, including financial
and tax investigation and research with assistance from Grant
Thornton and EY respectively, to identify risks and opportunities.
Detailed financial projections were prepared outlining significant
financial synergies and by the end of FY2022 Bango had executed on
$11M of a targeted $21M of these savings with the balance expected
by the end of FY2023.
Post-acquisition, Bango engaged with Grant
Thornton in respect of the Purchase Price Allocation with assets
and liabilities recognized based on the fair valuation on the date
of acquisition per IFRS3. Bango identified two key areas to be
considered and valued, customer relationships and technology IP
with two other areas, non-competition agreements and trade
names/brands considered but not valued. The outcome of these
valuations resulted in a negative goodwill figure as the purchase
price was lower than the total fair value of the assets and
liabilities acquired and this recognized as an exceptional gain in
the income statement.
End User Spend (EUS)
EUS is calculated based on the total value of
transactions processed by the Bango Platform (excluding taxes)
together. EUS, increased by 35.7% in the year from $4.1B to $5.6B.
This measure, although less correlated than ever with revenue,
continues to be an important Key Performance Indicator for the
business and an essential provider of Purchase Behavior Targeting
information for Bango Audiences.
Revenue and costs of sale
Total revenue from continuing operations
increased 37.6% to $28.5M (2021: $20.7M). Bango continues to break
this down into transactional payments & data monetization
revenue and non-transactional payments revenue (encompassing
platform & technology, licensing of software and integration)
and has added a new metric for revenue monitoring during the period
by breaking out Annualized Recurring Revenue (ARR). This metric,
which is calculated by annualizing the December revenue derived
from ongoing, contracted, repeating revenues, showed a 4.7x
increase from December 2021 to $5.0M. This is a very strong
indicator of the continuing, sustainable growth of the company.
Bango earns revenue from payment transactions
processed by the Bango Platform, from platform and software
licenses and from the data insights sold as Bango Audiences.
Revenue, such as integration fees, is recognized on completion of
contractual milestones and after consideration of the requirements
of IFRS15 (Revenue from Contracts with Customers). Further
consideration was also given to the separation between the
integration fees and the subsequent ongoing platform license fees.
It was judged, based on the contractual agreements, individual
orders and discussions between customers and Bango, that these were
two distinct revenue events.
Bango has seen gross profit margins reduce
slightly this year to 90.6% (2021: 94.1%). This is the result of
increasing revenue derived from the growing Audiences business,
which shares revenue back with the data provider, additional cost
of sales where a third party is used to provide connections to the
local payment provider together with some costs associated with new
Digital Vending Machine customers, and some short-term higher costs
of sale from the newly acquired DOCOMO Digital business, which
currently runs on a different platform and low distribution margin
where Bango has acted as Principal.
Operating expenditure
The combination of the inclusion of DOCOMO
Digital costs from the beginning of September with the ongoing
planned, strategic investment in the development of the Bango
Platform, saw administrative expenses increase to $30.3M (2021:
$18.9M).
Adjusted EBITDA* for the year reduced to $5.0M,
(2021: $6.2M). This reflects the impact from the additional costs
taken on as part of the acquisition of DOCOMO Digital and before
the impact of the $21M of annualized synergy savings that will be
achieved by the end of FY2023.
The share-based payment charge was $1.6M (2020:
$1.5M) calculated using the Black-Scholes model. The share-based
payments relate to the Bango share option program that enables all
Bango employees to share in the growth in value of Bango. Share
options are allocated to employees twice a year. It is a vital
recruitment and retention tool in an increasingly competitive
employment market.
Exceptional items
As explained above, Bango undertook a
provisional Purchase Price Allocation process upon acquisition of
DOCOMO Digital which resulted in a negative goodwill adjustment of
$10.2M which is reflected within the consolidated statement of
comprehensive income.
As part of the ongoing integration of DOCOMO
Digital, Bango incurred certain costs related to personnel and
overheads that are not part of the normal course of business. These
have been included as exceptional costs within our profit &
loss. These include both incurred costs and costs which have been
communicated but not executed.
Financial results and earnings per
share
The total loss after tax of $2.1M (2021 Profit :
$0.4M) includes exceptional costs of $11.0M, exceptional income
through recognition of negative goodwill of $10.2M, the Bango share
of net loss from the NewDeep associate of $1.4M (2021 : loss
$2.1M), share-based payments of $1.6M (2021 : $1.5M) and R&D
tax credits from Bango investment in driving forward its technology
of $1.2M (2021: $0.7M).
Basic loss per share was 2.81 cents (2021
earnings: 0.58 cents).
Statement of financial
position
Net assets at 31 December 2022 decreased to
$31.4M (31 December 2021: $36.8M). Investment in intangible assets
that form the core of the business continue to be key and increased
from $18.6M to $27.2M. Receivables and payables both increased as a
result of the acquisition, reflecting the large cost burden of the
acquired business against payables which includes liabilities under
IFRS16 for leased offices and a deferred tax liability in respect
of some withholding taxes. Receivables were again boosted by
contracts converted late in the final Quarter with no abnormal debt
payment issues. Accruals growth includes exceptional costs that
will be expensed in FY2023.
Cash
Cash balance, including cash equivalents and
cash held in short-term investments, at 31 December 2022 increased
to $12.7M (2021: $9.7M) assisted by increasing sales, cash from the
acquisition, favorable payment terms for a distribution contract
and proceeds of share options exercised. Of this $2.9M is
considered to be restricted and related to a discontinued business
segment from the DOCOMO Digital acquisition. There are no bank
borrowings.
Intangible assets
Intangible assets net book value of $27.2M
(2021: $18.6M) showed an increase of $8.6M and includes acquired
contract intangibles, as well as internally developed capitalized
R&D. Intangible asset costs relating to capitalized internal
R&D increased $7.3M, after a reduction of $2.4M due to foreign
exchange movements to $30.8M from $23.5M in 2021 reflecting the
continued drive to innovate for future growth. The net value of
internally developed capitalized R&D also increased from $9.8M
to $15.0M at the end of 2022. Internally generated R&D is
amortized over 5 to 7 years, commencing upon deployment, with
projects assessed in relation to their individual cash generation
ability.
Liabilities
Lease liabilities at 31 December 2022 were $2.6M
(2021: $0.1M) and have increased post-acquisition as a result of
leased offices included with the DOCOMO Digital business.
Going concern
The combination of good operating cash flow and
strong revenue growth supports the Directors’ view that Bango has
sufficient funds available to meet its foreseeable working capital
requirements including costs related to any restructuring following
the DOCOMO Digital acquisition. These requirements support the
planned investment to grow marketing and sales, and to develop new
products.
The Directors have taken into account the wider
macro-economic effects, including foreign exchange and interest
rate fluctuations, and have concluded that the going concern basis
remains appropriate.
Matt Garner Chief Financial
Officer
*Adjusted EBITDA is earnings before interest,
tax, depreciation, amortization, exceptional items, negative
goodwill and share based payment charge
Consolidated statement
of comprehensive income
for the year ended 31 December 2022
|
2022 |
|
2021 |
|
$ 000 |
|
$ 000 |
|
Revenue |
28,490 |
|
20,704 |
|
Cost of sales |
(2,671 |
) |
(1,231 |
) |
Grossprofit |
25,819 |
|
19,473 |
|
Other operating income |
1,123 |
|
- |
|
Administrative expenses |
(30,343 |
) |
(18,928 |
) |
AdjustedEBITDA |
4,951 |
|
6,178 |
|
Exceptional items |
(10,960 |
) |
- |
|
Negative
goodwill |
10,203 |
|
- |
|
Share
based payments |
(1,634 |
) |
(1,547 |
) |
Depreciation |
(760 |
) |
(224 |
) |
Amortization |
(5,201 |
) |
(3,862 |
) |
Operating(loss)/profit |
(3,401 |
) |
545 |
|
Finance costs |
(58 |
) |
(10 |
) |
Finance income |
57 |
|
11 |
|
Share of net loss of
associates accounted for using the equity method |
(1,393 |
) |
(2,081 |
) |
Loss before taxation |
(4,795 |
) |
(1,535 |
) |
Income tax expense |
2,655 |
|
1,977 |
|
(Loss)/profitforthefinancialyear(attributabletoequity
holders of the company) |
(2,140 |
) |
442 |
|
Othercomprehensiveincome |
|
|
Itemsthatmaybereclassifiedsubsequentlytoprofitorloss |
|
|
Foreign exchange on
consolidation |
(4,921 |
) |
(214 |
) |
(Loss) / profit and total
comprehensive income for the financial year |
(7,061 |
) |
228 |
|
(Loss) / earnings per share attributable to the equity
holders of the parent
|
2022 |
2021 |
Basic (loss) / earnings per
share |
(2.81)c |
0.58c |
Consolidated
statement of financial
position as at 31 December 2022
|
|
2022 |
|
|
2021 |
|
|
|
$ 000 |
|
|
$ 000 |
|
ASSETS |
|
|
Non-current assets |
|
|
Property, plant and
equipment |
|
1,145 |
|
|
242 |
|
Right of use assets |
|
2,640 |
|
|
83 |
|
Intangible assets |
|
27,244 |
|
|
18,645 |
|
Investments accounted for
using the equity method |
|
3,766 |
|
|
5,630 |
|
|
|
34,795 |
|
|
24,600 |
|
Current assets |
|
|
Trade and other
receivables |
|
22,016 |
|
|
7,099 |
|
Research and development tax
credits |
|
2,030 |
|
|
778 |
|
Short-term investments |
|
41 |
|
|
945 |
|
Cash and cash equivalents |
|
12,657 |
|
|
8,706 |
|
|
|
36,744 |
|
|
17,528 |
|
Total assets |
|
71,539 |
|
|
42,128 |
|
EQUITY |
|
|
Capital and reserves attributable to equity holders of the parent company |
|
|
Share capital |
|
24,471 |
|
|
24,392 |
|
Share premium account |
|
62,411 |
|
|
62,057 |
|
Merger reserve |
|
2,886 |
|
|
2,886 |
|
Share-based payments
reserve |
|
4,029 |
|
|
3,635 |
|
Foreign exchange reserve |
|
(2,812 |
) |
|
2,109 |
|
Accumulated losses |
|
(59,541 |
) |
|
(58,265 |
) |
Total equity |
|
31,444 |
|
|
36,814 |
|
LIABILITIES |
|
|
Current liabilities |
|
|
Trade and other payables |
|
32,533 |
|
|
5,209 |
|
Lease liabilities |
|
841 |
|
|
56 |
|
|
|
33,374 |
|
|
5,265 |
|
|
|
2022 |
|
2021 |
|
|
$ 000 |
|
$ 000 |
Non-current liabilities |
Trade payables |
|
512 |
|
- |
Lease liabilities |
|
1,801 |
|
49 |
Deferred tax |
|
4,408 |
|
- |
|
|
6,721 |
|
49 |
Total
liabilities |
|
40,095 |
|
5,314 |
Total
equity and
liabilities |
|
71,539 |
|
42,128 |
Consolidated cash flow statement for the
year ended 31 December 2022
|
2022 |
|
|
2021 |
|
|
$ 000 |
|
|
$ 000 |
|
Cash
flows from
operating activities |
|
|
Net cash flow from operating
activities |
5,867 |
|
|
6,001 |
|
Cash
flows from
investing activities |
|
|
Acquisition of subsidiaries,
net of cash acquired |
9,179 |
|
|
- |
|
Acquisitions of property plant
and equipment |
(1,435 |
) |
|
(209 |
) |
Expenditure on capitalized
development costs and intangible assets |
(9,640 |
) |
|
(5,102 |
) |
Acquisition of other
intangible assets |
- |
|
|
(1,048 |
) |
Short-term investments |
904 |
|
|
(945 |
) |
Interest received |
57 |
|
|
11 |
|
Net cash flows from investing
activities |
(935 |
) |
|
(7,293 |
) |
Cash
flows from
financing activities |
|
|
Proceeds from issue of
ordinary shares, net of issue costs |
433 |
|
|
2,243 |
|
Interest paid |
(10 |
) |
|
(7 |
) |
Repayment of other
borrowing |
- |
|
|
(3 |
) |
Payments to finance lease
creditors |
(451 |
) |
|
(97 |
) |
Interest payment on
finance |
(48 |
) |
|
- |
|
Net cash flows from financing
activities |
(76 |
) |
|
2,136 |
|
Net increase in cash and cash
equivalents |
4,856 |
|
|
844 |
|
Cash and cash equivalents at 1
January |
8,706 |
|
|
7,958 |
|
Effect of exchange rate
fluctuations on cash held |
(905 |
) |
|
(96 |
) |
Cash and cash equivalents at
31 December |
12,657 |
|
|
8,706 |
|
Consolidated statement
of changes in
equity for the
year ended 31
December 2022
|
Share capital |
Sharepremiumaccount |
Mergerreserve |
Share basedpaymentreserve |
Foreigncurrencytranslation |
Retainedearnings |
Total |
$ 000 |
$ 000 |
$ 000 |
$ 000 |
|
$ 000 |
|
$ 000 |
|
$ 000 |
|
At 1 January
2022 |
24,392 |
62,057 |
2,886 |
3,635 |
|
2,109 |
|
(58,265 |
) |
36,814 |
|
Loss for the year |
- |
- |
- |
- |
|
- |
|
(2,140 |
) |
(2,140 |
) |
Foreign exchange
translation |
- |
- |
- |
(376 |
) |
376 |
|
- |
|
- |
|
Foreign exchange on
consolidation |
- |
- |
- |
- |
|
(5,297 |
) |
- |
|
(5,297 |
) |
Total comprehensive
income |
- |
- |
- |
(376 |
) |
(4,921 |
) |
(2,140 |
) |
(7,437 |
) |
Share-based payment
transactions |
- |
- |
- |
1,634 |
|
- |
|
- |
|
1,634 |
|
Transfer for exercised
options |
- |
- |
- |
(864 |
) |
- |
|
864 |
|
- |
|
Exercise of share options and
warrants |
79 |
354 |
- |
- |
|
- |
|
- |
|
433 |
|
Transactions
with owners |
79 |
354 |
- |
770 |
|
- |
|
864 |
|
2,067 |
|
At
31 December
2022 |
24,471 |
62,411 |
2,886 |
4,029 |
|
(2,812 |
) |
(59,541 |
) |
31,444 |
|
|
Share capital |
Sharepremiumaccount |
Mergerreserve |
Share basedpaymentreserve |
Foreigncurrencytranslation |
Retainedearnings |
Total |
$ 000 |
$ 000 |
$ 000 |
$ 000 |
|
$ 000 |
|
$ 000 |
|
$ 000 |
|
At 1 January
2021 |
24,033 |
60,173 |
2,886 |
3,306 |
|
2,323 |
|
(59,804 |
) |
32,917 |
|
Profit for the year |
- |
- |
- |
- |
|
- |
|
442 |
|
442 |
|
Foreign exchange
translation |
- |
- |
- |
(121 |
) |
121 |
|
- |
|
- |
|
Foreign exchange on
consolidation |
- |
- |
- |
- |
|
(335 |
) |
- |
|
(335 |
) |
Total comprehensive
income |
- |
- |
- |
(121 |
) |
(214 |
) |
442 |
|
107 |
|
Share-based payment
transactions |
- |
- |
- |
1,547 |
|
- |
|
- |
|
1,547 |
|
Transfer for exercised
options |
- |
- |
- |
(1,097 |
) |
- |
|
1,097 |
|
- |
|
Exercise of share options and
warrants |
359 |
1,884 |
- |
- |
|
- |
|
- |
|
2,243 |
|
Transactions with
owners |
359 |
1,884 |
- |
450 |
|
- |
|
1,097 |
|
3,790 |
|
At 31 December
2021 |
24,392 |
62,057 |
2,886 |
3,635 |
|
2,109 |
|
(58,265 |
) |
36,814 |
|
1 Basis of
preparation
The Group financial statements, which
consolidate those of Bango Plc and all of its subsidiaries, have
been prepared under the historical cost convention and under the
basis of going concern. The financial information for the year
ended 31 December 2022 is unaudited.
Bango has prepared these accounts for the year
ended 31 December 2022, in accordance with UK-adopted International
Accounting Standards (“IFRS”). IFRS requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s and
Company’s accounting policies. The financial information included
in this preliminary announcement does not include all the
disclosures required in accounts prepared in accordance with UK
adopted International Accounting Standards (IFRS) and accordingly
it does not itself comply with UK adopted International Accounting
Standards.
The audit of the statutory accounts for the year
ended 31 December 2022 is not yet complete. These accounts will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement.
The financial information for the period ended
31 December 2021 is derived from the statutory accounts for that
year which have been delivered to the Registrar of Companies. The
auditors have reported on the accounts for the year ended 31
December 2021; their report was unqualified, did not include any
matters to which the auditor drew attention by way of emphasis and
did not contain a statement under s498(2) or s498(3) of the
Companies Act 2006.
These financial statements are presented in US
Dollars (USD), the presentation currency of Bango PLC Group. The
Group’s functional currency is GBP Sterling. The directors have
reviewed the functional currency of the group in light of the
change in presentational currency and are comfortable that their
assessment of GBP remains appropriate for the Group's functional
currency.
2 Revenue
|
|
Revenue by product: |
|
|
|
2022 |
2021 |
|
$ 000 |
$ 000 |
Payments -
transactional & data monetization |
18,185 |
15,684 |
Payments
non-transactional (licensing of software, platform &
technology), and integration |
10,305 |
5,020 |
|
28,490 |
20,704 |
Most income is currently recognized at a point in time rather
than over time. Bango Plc believes that any further breakdown could
reveal commercially sensitive information.
|
2022 |
2021 |
$ 000 |
$ 000 |
Annual recurring revenue |
4,963 |
1,053 |
|
4,963 |
1,053 |
Geographical analysis |
|
|
Bango Plc’s revenue from external customers is divided into the
following geographical areas.
|
2022 |
2021 |
$ 000 |
$000 |
United Kingdom (country of
domicile) |
1,242 |
948 |
EU |
3,765 |
2,213 |
USA and Canada |
8,078 |
4,428 |
Rest of the World |
15,405 |
13,115 |
|
28,490 |
20,704 |
All turnover is spread over many territories, of which $8.7M
comes from two partners in the Rest of the World and $3.5M comes
from a partner in USA and Canada. (2021: $2.6M from the partner in
the USA and Canada, $6.7M from two partners in the Rest of the
World).
3 Basic (Loss)
/ earnings per
share
Basic (loss) / earnings per share are calculated
by dividing the profit attributable to equity holders of Bango Plc
by the weighted average number of ordinary shares in issue during
the year.
|
2022 |
|
2021 |
Basic
(loss) /
earnings per
share |
$ 000 |
|
$ 000 |
(Loss) / profit for the
financial year |
(2,140 |
) |
442 |
Weighted average number of
ordinary shares in issue |
76,173,439 |
|
75,640,815 |
|
|
|
Basic
(loss) /
earnings per
share |
2022 |
|
2021 |
Basic (loss) / profit per
share attributable to equity holders |
(2.81) c |
|
0.58 c |
Basic
adjusted earnings
per share |
|
|
Adjusted earnings per share is a key financial
information which discloses the financial performance of the core
business for which the directors have direct control. Adjusted
basic earnings per share is determined as the profit attributable
to equity holders of Bango Plc excluding the Bango Plc share of the
net loss of associate for the period, negative goodwill and
exceptional items divided by the weighted average number of
ordinary shares in issue during the year.
|
2022 |
|
2021 |
$ 000 |
|
$ 000 |
ProfitattributabletoequityholdersofBangoPLC: |
|
|
From continuing
operations |
(2,140 |
) |
442 |
Exceptional items |
10,960 |
|
- |
Negative goodwill |
(10,203 |
) |
- |
Share of net loss of
associates accounted for using the equity method |
1,393 |
|
2,081 |
Profit attributable to equity
holders of Bango PLC |
10 |
|
2,523 |
Weighted average number of
ordinary shares in issue |
76,173,439 |
|
75,640,815 |
Adjusted basic earnings per
share attributable to equity holders (c) |
0.01 c |
|
3.34 c |
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