Monitise continues to grow as planned

Monitise announced year end figures today and continues to show strong growth and high margins as it marches on towards domination of the interface between banks and mobile products. But the financial figures only tell part of the story. Monitise continues to sign significant deals with major players globally (recently with IBM to help them handle the growth at Visa) that will cement their position and allow uninterrupted growth. They have also hired top drawer names to their team to support growth. This company is growing and will move next year to the LSE exposing it shares to large institutional investors who cannot buy on the AIM market (a UK version of penny stocks). I think this is a strong contender to be a 3-500% growth stock over the next 3-5 years.

Financial Highlights

· Full-year revenue more than doubled for the fourth year in succession, rising to £72.8m from £36.1m, an increase of 102%. Revenue growth was 50% on an organic basis(1).
· Gross margin increased to 76% from 66% in FY 2012, with user generated margin particularly strong, owing to a number of significant product licence deals.

· Group EBITDA(2) loss of £19.3m for the year (FY 2012: £10.4m), which takes into account the acquisition of Clairmail Inc., Mobile Money Network and eMerit Solutions, continued investment in scaling Monitise's platform technology and Group service delivery capabilities as services were launched across three continents.

· Adjusted3 loss for the year was £32.8m (FY 2012: £18.2m) and adjusted loss per share was 2.4p (FY 2012: 2.4p). Statutory Loss before tax in the year was £51.1m (FY 2012: £16.9m), with loss per share at 3.8p per share (FY 2012: 2.1p).

· Group net cash of £85.6m at 30 June 2013.

Outlook

Our continued confidence is reflected in the following guidance:

· Expected revenue growth of approximately 50% in FY 2014.

· FY 2014 gross margin to be maintained above 70%.
· The Group sees multiple opportunities in all geographies both from direct sales channels and its growing partner network.

· A move to the London Stock Exchange's main market is targeted in calendar 2014.