TIDMBGO
RNS Number : 4814H
Bango PLC
13 March 2018
13 March 2018
BANGO PLC
("Bango")
Final Results
Bango (AIM: BGO), the mobile commerce company, today announces
its Final Results for the year ended 31 December 2017.
FY2017 Financial performance
-- End User Spend (EUS) increased 105% to GBP271.4m (FY2016: GBP132.3m)
-- Revenue increased 62% to GBP4.2m (FY2016: GBP2.6m)
-- Total admin costs were GBP5.7m (FY2016: GBP5.0m) in-line with market expectation
-- Bango operational costs were stable at GBP2.3m (FY2016:
GBP2.4m), demonstrating the high scalability of the platform
-- Adjusted LBITDA* improved to -GBP1.6m (FY2016: -GBP2.8m)
-- Cash at 31 December 2017 was GBP4.8m (31 December 2016: GBP5.7m)
-- EUS run rate exiting February 2018 was GBP465m/year
*Adjusted LBITDA is the loss before interest, tax, depreciation,
amortization and share based payment charge.
FY2017 Operational performance
-- New content capabilities: Amazon launched Direct Carrier
Billing (DCB) for retail goods to customers in Japan using the
Bango Platform, demonstrating ability of the platform to handle the
complete "shopping cart" experience, including multi-part ordering,
billing and fulfilment, and partial refund
-- Payment diversity: the Bango Platform proved its flexibility
to handle alternative payment methods beyond DCB, launching new
mobile money wallets in 2017, including the 9mobile wallet in
Africa
-- Google Play upgrades: Three mobile operators upgraded their
Google Play routes from legacy bi-lateral (direct) connections to
the Bango Platform, and benefitted from enhanced performance,
higher sales and improved data insights
-- New product capabilities: Many product enhancements were
launched in 2017, including unique comparative benchmarking in
Bango Boost, and new capabilities to support IoT usage and bundled
pricing
Outlook
-- Growth from industry leaders: Bango expects growth from DCB
for Amazon physical goods in Japan, resale and bundling for Amazon
Prime in India and beyond, continued growth for Google Play and
from new merchants worldwide
-- Data monetization opportunity: Bango is deepening customer
relationships and opening new revenue streams by providing further
ways to monetize data from mobile operators and the Bango Platform
and using the Audiens technology acquired in January 2018
-- On track to double End User Spend in 2018: The Bango Platform
will comfortably handle at least a doubling of EUS at current
stable cost levels, with a strong pipeline of new relationships and
upgrade opportunities with existing partners
-- Stable cost-base: The Bango Platform was tested to a capacity
of over GBP5bn transactions a year in mid-2017
Ray Anderson, Chief Executive Officer of Bango, commented:
"The Bango Platform enables leading merchants across the world
to grow their sales faster by opening-up payments to more users and
by using the unique data that only Bango can provide. Sales through
the Bango Platform more than doubled in 2017, while the core
operating costs remained stable. Bango added new customers, new
payment routes and continual enhancements to the Bango Platform,
developing and investing in new technology, providing more
opportunities for Bango customers to expand and diversify their
businesses. Growth with existing routes and substantial
opportunities in the sales pipeline make Bango confident in
continued substantial EUS and revenue growth in the coming
year."
Contact Details:
Bango PLC FTI Consulting Cenkos Securities
PLC
Tel. +44 333 Tel. +44 203 727 Tel. +44 131
077 0247 1000 220 6939
www.bango.com Rob Mindell Beth McKiernan
Ray Anderson, Matt Dixon Neil McDonald
CEO
Rachel Elias-Jones,
CFO
Anil Malhotra,
CMO
About Bango
Bango is the payment platform chosen by the world's most
influential companies to grow their sales faster in the age of
connected commerce. Working with global stores including Google,
Amazon, and Microsoft, Bango has become the industry standard,
helping people make payments quickly and conveniently. Through its
partnerships and reach, Bango offers unique insights derived from
pooled data and shared knowledge. Bango gives businesses unrivalled
visibility into their markets and customers, increasing sales and
customer acquisition. Built to scale, the Bango Platform supports
the exponential growth ambitions of its global partners. For more
information, visit www.bango.com.
Chairman's statement
I am delighted to report that the vision and plan the Bango
management team set out at its January 2017 strategy day has been
delivered. 2017 was a year in which the remarkable breadth of the
Bango Platform was thoroughly and successfully demonstrated.
In a year of many achievements, enabling a new payment method
for the world's biggest online retailer in its third largest global
market, was a highlight. The Amazon business in Japan covers
retail, digital products and services such as Amazon Prime and
Prime Student. The technical requirements to support this kind of
retail payments are far greater than for digital purchases, which
validates the long-term investment Bango has made in the
sophisticated capabilities of the Bango Platform. This investment
has proven to be a shrewd decision by management and signposts the
longevity of Bango technology as the market develops in new
ways.
At the heart of the Bango strategy is the idea that a platform
accumulates a vast amount of information from multiple sources, and
delivers value to customers and partners that they cannot obtain
through direct, bilateral relationships. The Bango Platform is
truly global, collecting data from end user activity across Europe,
Asia, Africa, Oceania and the Americas. The business today powers
digital and retail sales, using direct billing, wallets and
reseller business models, for the world's biggest internet
companies which can grow their sales faster by partnering with
Bango. This places Bango in a unique position, and with a unique
opportunity, in the commerce market.
Entering 2018, the power and flexibility of the Bango Platform
was again demonstrated when Bharti Airtel, India's biggest Mobile
Network Operator, launched a new service offering with Amazon.
Mobile users can now enjoy Amazon Prime video, bundled as part of
their Airtel mobile or broadband service. The activation of this
customer offer uses the Bango Platform to resell, maintain and
manage subscriber entitlement, and provide valuable information to
both parties, leading to increased sales and more efficient
marketing.
Finally, in a significant post-year end event, Bango announced
the rapid acceleration of its plan to further monetize the value of
the Bango Platform. The acquisition of Audiens, a technology
provider with a Customer Data Platform, is an opportunity for Bango
to seize the strategic value that is increasingly being placed by
the commerce market on online payments and the associated data.
Audiens enables a much wider market beyond merchants and operators
to benefit from the value of payments data and from the broader
data attributes that merchants and operators can offer through
their relationships with Bango.
The management skill in achieving these 2017 milestones is
significant. Management again shows itself to be highly capable of
leading the business to new heights, equipped to achieve continued
progress through organic growth and the application of the Bango
technology to new markets. I am now looking forward to reporting on
the data opportunities provided by the Audiens acquisition. I am
looking forward to the year ahead, during which I believe Bango can
deliver sizeable End User Spend growth and deepen its importance in
the business of the internet.
David Sear
Chairman
CEO's statement
Bango is the platform chosen by the world's most influential
companies to grow their sales faster in the age of connected
commerce. Google, Amazon, Microsoft and other leaders are using
Bango technology to enable billions of users to make payments
quickly and conveniently.
Through its partnerships and technology, Bango delivers unique
commerce insights derived from pooled data and shared knowledge.
Bango gives businesses unrivalled visibility into their markets and
customers, increasing sales and customer acquisition. Built to
scale, the Bango Platform supports the exponential growth ambitions
of its global partners.
Driving customer success with the Bango Platform
Amazon physical goods
In June 2017, Bango broke new ground by enabling Amazon to offer
its Japanese customers the convenience of payment for physical
goods on their mobile phone bill.
Launching initially across all Android and iPhone users on the
Docomo and KDDI networks in Japan, this reaches over 110 million
consumers. Japan is a mobile-centric internet culture with billions
of dollars of online purchases transacting on mobile phones each
year.
The Bango Platform can now support the more complex technology
and processes demanded by online retailers. This was enabled by
significant additional investment in the Bango API and associated
software over more than 3 years.
Online retailers anywhere in the world are now able to follow
Amazon's lead and offer their customers the convenience of payment
to their mobile phone bill.
Amazon Prime Video
In parallel with opening-up payments for physical goods using
the Bango Platform, the expansion of digital services continues via
the Bango resale product. At the end of 2017, Bharti Airtel, the
largest mobile operator in India began to launch Amazon Prime Video
as part of a bundled package offered to its customers. Integration
with Amazon was made possible by using the Bango Platform. As new
mobile operators integrate to the Bango Platform to enhance their
offering across physical and digital goods, the reach for all
merchant partners is increased.
Google Play upgrades
Mobile operators switching from an existing connection to the
Bango Platform provide proof that Bango provides more value than a
payment processor. In the first half of 2017, two operators in the
Middle East moved their Google Play routes from third party
providers to the Bango Platform, to stimulate growth. Their Android
business is now benefiting from the tools and data that Bango
uniquely provides. An immediate uplift in end user spend of 35% was
gained, with more than 25% increase in unique users. Bango Boost
will enable app developers to strengthen their business with these
operators by using the benchmarking and data insights that only
Bango can provide.
A key focus of Bango sales and marketing teams in 2018 is
accelerating the growth of Google Play EUS by upgrading mobile
operators to the Bango Platform. More than 30 mobile operators are
in discussion with Bango about the upgrade opportunity,
representing in excess of US$3Bn of End User Spend that can be
moved to the Bango Platform and grown faster and more
profitably.
Success with mobile wallets
The Bango Platform was designed to be powerful and flexible to
deal with emerging payment methods as they are deployed by
operators and other payment providers. During 2017, work continued
on integrating new wallets and payment systems to meet the needs of
merchants wanting to go beyond carrier billing. In June, the first
of these launched in Japan with AU's wallet, followed in November
by 9mobile's 9pay wallet in Nigeria, which launched in Google
Play.
Product development
New platform capabilities added during 2015 and 2016 to handle
the sophistication of physical goods delivery were extensively
tested and proven during 2017, and the Bango API was extended to
support these powerful capabilities.
Bango released an update to Bango Boost, its sales conversion
rate improvement product, to provide Google Play developers with
valuable data that can improve their marketing activity and enable
better collaboration with mobile operators. Previously Bango Boost
was focused on mobile operators and people within Google or other
stores. Bango Boost unleashes new revenue streams for mobile
operators from the developers exploiting Google Play who could not
otherwise easily engage with the MNOs. A team is already engaging
with 20 of the top Google Play developers to increase their sales
success.
Software engineering work continues to speed up transaction
processing and improve reliability and resilience through
innovations in the use of database and API technology. Bango
datacenters have been tested at a sustained transaction rate of
over GBP5Bn/yr. The 10x headroom means that the incremental cost to
process transactions remains close to zero and, therefore,
additional revenue is the equivalent of gross profit.
Acquisition of Audiens
The increasing capabilities of the Bango Platform result in more
transactions being processed. Additional transactions provide not
only immediate commercial value to Bango and its partners, but also
contribute to the pool of anonymized data stored in the Bango
Platform. Data has great value to publishers, operators, developers
and other advertisers. To market this data more quickly and to
allow partners integrated to the Bango Platform to monetize their
data securely and at low cost, Bango acquired Audiens. Audiens
brings contracts to sell data with the leading global Data
Management Platform's (DMPs) and a team with extensive experience
in data monetization.
Outlook
Bango has continued to execute on its successful strategy of
powering the industry leaders. In 2017 the power and versatility of
the Bango Platform was emphasized by the successful launch of DCB
for Amazon physical goods in Japan, of Amazon Prime Video resale in
India, and continued growth for Google Play merchants
worldwide.
In 2017, for the third consecutive year, the EUS processed
through the Bango Platform more than doubled, increasing the power
of the platform for merchants, and attracting new business which
will power spending growth and contribute to an increasingly
valuable pool of data in the years to come.
Rapid growth in 2017 made the benefits of the Bango Platform
even more compelling. The more transactions through the Bango
Platform, the better it can increase sales for customers in the
future - due to the unique "platform effect". Demonstration of the
big benefits mobile operators see from moving to the Bango Platform
is expected to drive many legacy direct routes to move to Bango in
the coming year.
Bango will continue to invest in 2018 in developing the
commercial relationships that can bring billions of EUS in the
future. The future of Bango as a key commerce technology provider
for the world's most influential online companies will benefit from
both further growth in payment processing volumes and, excitingly,
new revenue streams from the recently expanded data monetization
business.
Ray Anderson
Chief Executive Officer
CFO Statement
End User Spend
In FY2017 Bango doubled End User Spend (EUS) for the third
consecutive year, growing to GBP271.4m, from GBP132.3m in FY2016
and GBP44.7m in FY2015. EUS growth came from existing and new
routes activated through the Bango Platform.
Bango is confident that this momentum can continue to drive
future EUS growth from existing routes, new payment routes being
activated and existing Google Play routes upgrading to the Bango
Platform. Two new migrations in the Middle East were completed in
FY2017, demonstrating the ability of Bango to successfully migrate
Google Play routes to the Bango Platform. Partners are choosing the
Bango Platform because the technologies that Bango has developed,
including Bango Boost and Bango Dashboard allow greater business
understanding which can increase EUS significantly compared to
direct connections.
EUS remains the most significant Key Performance Indicator that
management uses to measure the development of the business and the
success of Bango partners. The delivery of additional EUS through
upgrades will be a key focus of Bango in 2018. EUS is calculated as
the total sales processed through the Bango Platform, excluding
taxes. Bango's growing EUS demonstrates the strength of the Bango
Platform to handle rapidly increasing EUS at low operational
costs.
Revenue
Bango revenue is the fees that customers or partners pay Bango
to collect transactions through the Bango Platform. There is no
significant incremental cost of sales and therefore revenue is
almost exactly reflected as gross profit.
Bango has two revenue streams which are reported on
separately.
Revenue generated from EUS is accounted for consistently with
the method from the prior year, and increased 69% to GBP4.08m from
GBP2.41m in FY2016. The growth in EUS has led to an increase in EUS
revenue. The Bango business model is for the EUS revenue to grow to
cover all expenses and R&D investment in the platform.
Other fees, comprising all revenue not generated from EUS such
as integration fees, are recognized on completion of the contracted
milestones. This revenue relates to payments by merchants or mobile
operators for upgrades to the Bango Platform.
Bango has considered the potential impact that IFRS 15 may have
on its revenue. Following a review, the only impact is that the
fees related to subscription services lasting more than one month
are now spread over the life of the subscription, in-line with the
criteria under IFRS 15. Other revenues from digital and physical
goods sales will not be affected by IFRS 15 in 2018.
Bango became EBITDA positive on a run rate basis in November
2017.
Revenue expressed as a percentage of EUS
Revenue expressed as a percentage of EUS was 1.5% (FY2016: 1.8%)
and is consistent with management's short-term expectations for
this metric.
Bango has a range of contractual models and pricing that link to
total EUS in different markets and for different content.
Accordingly, revenues can reduce with higher EUS due to a tiered
pricing model or potential market size.
From FY2018 onwards, Bango will no longer report on revenue
expressed as a percentage of EUS, as revenue from the data business
will make an increasing contribution to the total revenue.
Acquisition of Audiens S.R.L.
On 23 January 2018, Bango purchased 98.45% of Audiens S.R.L.
from Digitouch S.p.A, for an initial consideration of EUR1.48m in
cash and EUR0.63m payable in cash during 2018. Bango also issued
521,803 new Bango shares to the vendors of Audiens and 738,399
warrants over new Bango shares, exercisable at a price of GBP1.80
each, which will lapse after 10 years. Further deferred
consideration, based on the growth of the business in the two years
post acquisition is potentially payable to the CEO of Audiens,
based upon an option agreement for the remaining 1.55% of Audiens.
Bango currently expect this payment to be up to EUR0.95m.
As Bango EUS grows in 2018, the volume of data in the Bango
Platform will increase and therefore, the revenue from the Bango
data opportunity is expected to increase.
Administrative expenses
Administrative expenses of GBP5.7m (FY2016: GBP5.1m) were
in-line with budget. The cost of processing transactions through
the Bango Platform remained static at GBP2.3m (FY2016: GBP2.4m),
but the total value of transactions more than doubled, highlighting
the huge scale and cost efficiencies in the Bango Platform.
The increase in administrative expenses came in two areas: sales
and development. In the second half of 2017 Bango invested in new
technology to make processing of entitlement to subscription
services that are bundled with other services more easily available
to customers. The first launch of this technology was by India's
largest mobile operator, Bharti Airtel, who made Amazon Prime Video
available as part of a bundled package offered to its customers.
The potential EUS opportunity for this technology is significant
and therefore Bango will continue to invest in enhancement of this
technology and its marketing in 2018. Bango continues to invest in
other Research and Development (R&D) projects and spent GBP3m
(FY2016: GBP2.6m) to ensure that the Bango Platform remains agile
to customer needs.
Bango recognizes that the Google Play market continues to be a
growing and early stage market. Most of Google Play's EUS, $6Bn in
4Q2017 (App Annie, 2018) is from older, legacy routes that are
connected directly with Google or limited to credit card users.
Bango has increased its sales and marketing team to target this
market as the potential EUS opportunity is significant. The EUS on
legacy routes ranges from millions to hundreds of millions of
dollars a year per route. The largest markets are Asia
(particularly Japan and Korea) and North America. To address these
key markets, Bango has increased its local presence.
Amortization and impairment of intangible assets in the year was
GBP1.1m (FY2016: GBP1.1m) as R&D projects capitalized in prior
years were deployed. Amortization of the BilltoMobile Inc
investment was GBP0.3m (FY2016: GBP0.2m). Depreciation for the year
totaled GBP0.2m (FY2016: GBP0.3m) reflecting the small number of
fixed asset additions in the year, and that much on the equipment
is now fully depreciated.
Share based payment costs of GBP0.7m (FY2016: GBP0.4m), are a
result of offering share options to employees. The increased charge
resulted from an increase in the share volatility input into the
Black Scholes model used to calculate the charge, which is a result
of the significant increase in the Bango share price over the year.
Share options remain one of the most valuable components of the
Bango remuneration policy used to attract, motivate and retain
employees in a highly competitive market. All employees, other than
Non-Executive Directors are eligible to take part in the Bango
share option scheme.
Balance sheet
Net assets at 31 December 2017 were GBP10.7m (31 December 2016:
GBP12.3m).
Cash balances at 31 December 2017 decreased by GBP0.9m to
GBP4.8m (at 31 December 2016: GBP5.7m), as a result of continued
investment in new products. With a highly scalable operating
platform and growing EUS leading to increased revenue, Bango will
begin generating sufficient cash to cover both the operational
costs of the business and continued investment in product
development. As part of the post year end acquisition of Audiens,
Bango raised GBP5m (GBP4.6m net of fees) both to acquire and
integrate Audiens and to invest in the development of Bango's data
monetization technology and business.
Intangible assets include acquired goodwill as well as
internally developed capitalized R&D. Intangible assets
relating to capitalized R&D increased to GBP4.0m, following
additional investment in the Bango Platform (31 December 2016:
GBP3.6m). Internally generated R&D is amortized over 5 years
with projects assessed in relation to their individual cash
generation ability. As at 31 December 2017, there was GBP0.9m trade
and assets relating to BilltoMobile Inc (31 December 2016: GBP1.2m)
and GBP1.2m of goodwill (31 December 2016: GBP1.2m).
Total borrowings at 31 December 2017 were GBP0.3m (31 December
2016: GBP0.1m) and consist of finance lease liabilities used to
purchase computer equipment and software.
Going concern
As Bango continues to grow its EUS and revenue in 2018 in line
with prior year trends, cash consumption will reduce on a stable
cost basis. With cash at the year-end of GBP4.8m, the Board
believes there is sufficient cash in place to see the business
through to cash breakeven and profitability. The fundraising to
acquire and support Audiens in January 2018, ensures that the Bango
cash balance will remain sufficient during the current year to
ensure customers continued confidence in upgrading to the Bango
Platform.
Rachel Elias-Jones
CFO
Audited results for the year ending 31 December 2017
Consolidated statement of comprehensive income
31 Dec 31 Dec
2017 2016
Note GBP GBP
Alternative performance measure (Non-IFRS)
End User Spend 3271,356,080 132,290,981
--------------- ----------- -----------
Revenue 3 4,151,939 2,624,187
Cost of sales 3 (2,439) (7,054)
----------- -------------
Gross profit 4,149,500 2,617,133
Other administrative expenses 3 (5,717,516) (5,039,873)
Non-recurring items 3 (59,463) (376,013)
Share based payments 3 (679,023) (359,373)
Depreciation 3 (188,496) (319,284)
Amortization and impairment 3 (1,396,541) (1,150,822)
----------- -------------
Total administrative expenses (8,041,039) (7,245,365)
----------- -------------
Operating loss (3,891,539) (4,628,232)
Interest payable (51,458) (53,661)
Investment income 20,858 30,363
----------- -------------
Loss before taxation (3,922,139) (4,651,530)
Income tax 486,986 238,413
----------- -------------
Loss and total comprehensive loss
for the financial year (3,435,153) (4,413,117)
----------- -------------
Other comprehensive income
Foreign exchange on consolidation (56,869) 135,187
Attributable to equity holders of
the parent (3,492,022) (4,277,930)
=========== =============
Loss per share attributable to the equity holders of the
parent
Basic loss per share (5.22)p (6.81)p
Diluted loss per share (5.22)p (6.81)p
All of the activities of the Group are classed as
continuing.
Consolidated balance sheet
31 Dec 31 Dec
2017 2016
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 556,863 294,565
Intangible assets 6,130,190 6,017,061
------------------------------- ------------
6,687,053 6,311,626
Current assets
Trade and other receivables 2,013,088 1,821,796
Research and Development tax credits 421,215 318,857
Cash and cash equivalents 4,847,203 5,696,517
------------------------------- ------------
7,281,506 7,837,170
------------------------------- ------------
Total assets 13,968,559 14,148,796
=============================== ============
EQUITY
Capital and reserves attributable
to equity holders of the parent company
Share capital 13,284,561 13,029,124
Share premium account 31,248,453 30,323,341
Merger reserve 1,236,225 1,236,225
Other reserve 2,350,701 2,211,136
Foreign exchange revaluation reserve 78,318 135,187
Accumulated losses (37,474,820) (34,579,125)
------------------------------- ------------
Total equity 10,723,438 12,355,888
=============================== ============
LIABILITIES
Current liabilities
Trade and other payables 2,967,538 1,697,354
Finance lease liabilities 99,889 82,149
------------------------------- ------------
3,067,427 1,779,503
Non-current liabilities
Finance lease liabilities 177,694 13,405
------------------------------- ------------
177,694 13,405
Total liabilities 3,245,121 1,792,908
Total equity and liabilities 13,968,559 14,148,796
=============================== ============
Consolidated cash flow statement
31 Dec 31 Dec
2017 2016
GBP GBP
Net cash used by operating activities (253,675) (2,646,857)
Cash flows used by investing activities
Purchases of property, plant and equipment (450,794) (106,554)
Addition to intangible assets (1,509,670) (3,425,134)
Interest received 20,858 30,363
----------- -----------
Net cash used by investing activities (1,939,606) (3,501,325)
Cash flows generated from financing
activities
Proceeds from issuance of ordinary
shares 1,180,549 85,948
Costs associated with issuance of
ordinary shares - (2,668)
Interest payable (51,458) (53,661)
Capital payable on finance lease obligations (89,571) (268,466)
Capital received on finance lease
obligations 271,600 -
Net cash generated from financing
activities 1,311,120 (238,847)
Net increase in cash and cash equivalents (882,161) (6,387,029)
Cash and cash equivalents at beginning
of year 5,696,517 12,135,326
Exchange differences on cash and
cash equivalents 32,847 (51,780)
----------- -----------
5,729,364 12,083,546
----------- -----------
Cash and cash equivalents at end
of year 4,847,203 5,696,517
=========== ===========
Consolidated statement of changes in equity
Share Share Merger Other FEX Retained Total
capital premium reserve reserve reserve earnings
Group account
GBP GBP GBP GBP GBP GBP GBP
Balance at
1 January
2016 12,886,350 30,101,510 1,236,225 1,896,842 - (30,211,087) 15,909,840
Share based
payments - - - 359,373 - - 359,373
Share based
payment transfer
for exercises - - - (45,079) - 45,079 -
Exercise of
share options 25,555 60,393 - - - 85,948
Issue of shares 117,219 164,106 - - - 281,325
Expense of
share issue - (2,688) - - - (2,688)
---------- ---------- --------- --------- ------- ------------ -----------
Transactions
with owners 142,774 221,831 - 314,294 - 45,079 723,978
---------- ---------- --------- --------- ------- ------------ -----------
Loss for the
year - - - - - (4,413,117) (4,413,117)
---------- ---------- --------- --------- ------- ------------ -----------
Other comprehensive
income
---------- ---------- --------- --------- ------- ------------ -----------
Foreign exchange
on consolidation - - - - 135,187 - 135,187
---------- ---------- --------- --------- ------- ------------ -----------
Total comprehensive
income for
the year - - - - 135,187 (4,413,117) (4,277,930)
---------- ---------- --------- --------- ------- ------------ -----------
Balance at
31 December
2016 13,029,124 30,323,341 1,236,225 2,211,136 135,187 (34,579,125) 12,355,888
---------- ---------- --------- --------- ------- ------------ -----------
Balance at
1 January
2017 13,029,124 30,323,341 1,236,225 2,211,136 135,187 (34,579,125) 12,355,888
Share based
payments - - - 679,023 - - 679,023
Share based
payment transfer
for exercises - - - (539,458) - 539,458 -
Exercise of
share options 255,437 925,112 - - - - 1,180,549
Transactions
with owners 255,437 925,112 - 139,565 - 539,458 1,859,572
---------- ---------- --------- --------- -------- ------------ -----------
Loss for the
year - - - - - (3,435,153) (3,435,153)
Other comprehensive
income
---------- ---------- --------- --------- -------- ------------ -----------
Foreign exchange
on consolidation - - - - (56,869) - (56,869)
---------- ---------- --------- --------- -------- ------------ -----------
Total comprehensive
income for
the year - - - - (56,869) (3,435,153) (3,492,022)
---------- ---------- --------- --------- -------- ------------ -----------
Balance at
31 December
2017 13,284,561 31,248,453 1,236,225 2,350,701 78,318 (37,474,820) 10,723,438
---------- ---------- --------- --------- -------- ------------ -----------
Notes to the financial statements
1 General information
Bango PLC ("the Company") was incorporated on 8 March 2005 in
the United Kingdom. Bango is domiciled in the United Kingdom.
Bango's shares are listed on the Alternative Investment Market of
the London Stock Exchange ("AIM").
The preliminary statements are for the year ended 31 December
2017 (including the comparatives for the year ended 31 December
2016).
2 Basis of preparation
The consolidated financial statements have been prepared under
the historical cost convention and under the basis of going
concern.
Bango has prepared its Report and accounts for the year ended 31
December 2017, in accordance with International Financial Reporting
Standards ("IFRS") as adopted in the European Union and as applied
in accordance with the provisions of the Companies Act 2006. 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 accounting policies.
These preliminary statements are presented in pounds sterling
(GBP) because that is the presentation currency of Bango.
The Board of Bango PLC approved the release of this preliminary
announcement on 12 March 2018.
The preliminary financial information does not constitute
statutory financial statements for the year ended 31 December 2017
within the meaning of section 435 of the Companies Act 2006, but is
extracted from those financial statements. Statutory accounts for
Bango PLC for the year ended 31 December 2016 have been delivered
to the Registrar of Companies. Statutory accounts for the year
ended 31 December 2017 will be delivered to the Registrar of
Companies following Bango's Annual General Meeting.
The auditors have reported on those accounts; their reports were
(i) unqualified, (ii) did not include references to any matters to
which the auditors drew attention by way of emphasis without
qualifying their reports and (iii) did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
3 Segment reporting
(a) End User Spend
As a non IFRS alternative performance measure, Bango has
identified EUS as its key performance indicator on which all
management decisions surrounding investment in the platform and
development of intangible assets are based. Key business decisions
are based on the total value and volume of transactions that Bango
has processed in each month through its payment platform.
Therefore, to give additional information to key stakeholders of
our accounts and to assist users of our financial statements, we
include this additional reporting.
31 Dec
31 Dec 2017 2016
GBP GBP
End User Spend 271,356,080 132,290,981
============ ============
(b) Revenue and gross profit
Bango, based on the information reviewed by the chief operating
decision maker, identifies two operating segments. Management
reporting is based principally on the type of customer and
strategic decisions are made on the basis of the gross profit
generated from each segment. The segments are not separately
managed and therefore Bango's headquarters and its research and
development activity are considered group operations and are not
allocated to any operating segment. Segment information can be
analyzed as follows for the reporting periods under review.
Bango has two revenue streams, which it reports separately.
Firstly, revenue from transaction fees due to EUS, secondly,
revenue from other fees paid by stores for new payment integrations
and other services.
End user activity is the fees paid by end users for purchasing
content. Gross profit for this segment is after both digital
merchant and payment provider charges. Assets for this segment are
amounts due from payment providers. Liabilities for this segment
are mainly fees payable to payment providers for provision of
services and fees payable to digital merchants for provision of
content sold by Bango to end users.
Other fees are the amounts paid to Bango by digital merchants
and others for package fees and other services including operator
connections. Assets for this segment are amounts due for service
fees and other integration fees. Liabilities for this segment
represent deferred income for longer term services. Group assets
include non-current assets and cash and cash equivalents. Group
liabilities relate to administrative expenses
12 months to 31 December 2017
End user Platform Group Total
activity fees
GBP GBP GBP GBP
Segment revenue 4,080,987 70,952 - 4,151,939
Cost of sales - payment
providers (2,439) - - (2,439)
Segment gross profit 4,078,548 70,952 - 4,149,500
----------- -------- ----------- -----------
Administrative expenses - - (5,717,516) (5,717,516)
Exceptional items - - (59,463) (59,463)
Share based payments
charge - - (679,023) (679,023)
Depreciation - - (188,496) (188,496)
Amortization and
impairment - - (1,396,541) (1,396,541)
Interest payable - - (51,458) (51,458)
Interest income - - 20,858 20,858
Segment net profit/
(loss) 4,078,548 70,952 (8,071,639) (3,922,139)
=========== ======== =========== ===========
Segment assets 1,451,542 - 12,517,017 13,968,559
Segment liabilities (2,479,707) - (765,414) (3,245,121)
Net assets (1,028,165) - 11,751,603 10,723,438
=========== ======== =========== ===========
12 months to 31 December 2016
End user Platform Group Total
Activity fees
GBP GBP GBP GBP
Segment revenue 2,410,871 213,316 - 2,624,187
Cost of sales - payment
providers (7,054) - - (7,054)
Segment gross profit 2,403,817 213,316 - 2,617,133
--------- -------- ----------- -----------
Administrative expenses - - (5,039,873) (5,039,873)
Exceptional items - - (376,013) (376,013)
Share based payments
charge - - (359,373) (359,373)
Depreciation - - (319,284) (319,284)
Amortization - - (1,150,822) (1,150,822)
Interest payable - - (53,661) (53,661)
Interest income - - 30,363 30,363
Segment net profit/
(loss) 2,403,817 213,316 (7,268,663) (4,651,530)
========= ======== =========== ===========
Segment assets 434,365 125,859 13,588,572 14,148,796
Segment liabilities (357,920) - (1,434,988) (1,792,908)
Net assets 76,445 125,859 12,153,584 12,355,888
========= ======== =========== ===========
Non-current assets are all based in the UK.
(c) Geographical analysis
Bango's revenue from external customers is divided into the
following geographical areas.
31 Dec 31 Dec
2017 2016
GBP GBP
United Kingdom (country of
domicile) 12,264 12,653
EU 58,719 47,857
USA and Canada 2,050,162 1,745,150
Indonesia 249,295 563,585
Rest of World 1,781,499 254,942
------------------------- -------------------------
4,151,939 2,624,187
================ ================
Segment revenue is based on the location of the partners. All
turnover from end users is spread over many territories, of which
GBP1.8m comes from a partner in the USA and Canada, GBP0.4m from a
partner in Rest of World and GBP0.6m from another partner in Rest
of World (2016: GBP1m USA and Canada and GBP0.3m Rest of
World).
4 Post Balance Sheet event
(a) Fundraise
On 24 January 2018 Bango announced a placing of 2,777,778 new
ordinary share at a price of 180 pence per share, to raise GBP5.02m
(GBP4.76m net of fees). This is split as:
GBP
Share capital 555,555
Share premium 4,208,945
Total 4,764,500
(a) Acquisition of Audiens S.R.L
On 23 January 2018, Bango acquired 98.45 per cent of Audiens
S.R.L. (Audiens), a data management company incorporated in Italy.
The acquisition is intended to enable Bango to capitalize on demand
for the valuable data it generates through its existing operations
and to enable the Bango Platform to provide additional value to the
rapidly growing mobile advertising market.
At the time the financial statements were authorized for issue,
Bango had not yet completed a full review of the accounting for the
acquisition of Audiens. In particular, the fair values of the
assets and liabilities acquired and the allocation of contingent
payments between consideration and remuneration under IFRS3 have
not been determined, and an independent valuation has not been
finalized.
The provisional estimate of consideration is GBP4.96m
comprising:
GBP
------------------------------ ----------
Cash consideration 1,301,971
------------------------------ ----------
Shares issued (1) 939,245
------------------------------ ----------
Warrants issued (2) 1,329,118
------------------------------ ----------
Option agreement (3) 835,725
------------------------------ ----------
Cash for provision of shared
services for 12 months 554,217
------------------------------ ----------
Total 4,960,276
------------------------------ ----------
1) Bango issued 521,803 ordinary shares of 20 pence each at an issue price 180 pence per share.
2) Bango issued 738,399 warrants over Bango ordinary shares of
20 pence exercisable over 10 years at 180 pence.
3) The remaining 1.55 per cent of Audiens is retained by Marko
Maras, a co-founder of Audiens (the "Maras Shares"). Bango has
entered into an agreement with Mr Maras relating to the Maras
Shares. Under the terms of the Option Agreement Bango can call upon
Mr Maras to sell these shares to Bango in certain circumstances and
Mr Maras can call upon Bango to purchase these shares in certain
circumstances. The final date by which either option must be
exercised it 28 February 2020. On exercise of either option, Mr
Maras may be entitled to payment for the Maras Shares calculated at
GBP0.84m, based on the placing price, payable by Bango subject to
certain conditions, including the achievement of specific revenue
targets by Audiens. The amount payable to Mr Maras will reduce as
the Bango share price rises, but could increase, on a sliding
scale, to a maximum of GBP1.21m, should the revenue objectives be
met but the Bango share price falls below the placing price at that
point.
All other notes to the accounts are included in the "Annual
Report 2017" which is available to download from
bangoinvestor.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FKBDKFBKDFND
(END) Dow Jones Newswires
March 13, 2018 03:00 ET (07:00 GMT)
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