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Bango PLC (BGO)

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Tuesday 15 March, 2016

Bango PLC

Final Results

RNS Number : 0698S
Bango PLC
15 March 2016
 

15 March 2016

 

 

BANGO PLC

("Bango")

 

Final Results

 

Bango (AIM: BGO), the mobile payments company, today announces its Final Results for the year ended 31 December 2015.

 

FY2015 Financial performance

·     FY2015 End User Spend (EUS) exit run rate over 100% higher than FY2014 EUS exit run rate at £67m pa

·     EUS for the whole year increased 78% to £44.7m (FY2014: £25.2m)

·     Total gross profit £1.3m (FY2014: £1.3m)

·     Blended gross margin on EUS 1.8% (FY2014: 2.4%); narrowing due to faster than expected growth in high volume developed markets 

·     Stable cost base of £4.4m (FY2014: £5.0m) demonstrating the technology and systems can deliver growing volumes at fixed cost on the route to profitability

·     Adjusted LBITDA* reduced to -£3.1m (FY2014: -£3.7m)

·     Cash balance of £12.1m (including £11m fundraise in November 2015) (FY2014: £6.3m (including fundraising of £6.0m)

 

*Adjusted LBITDA is the loss before interest, tax, depreciation, amortization and share based payment charge.

 

FY2015 Operational performance

·    Market share grew to 40% of live app store carrier billing routes, confirming Bango as market leader 

·     Activated Direct Carrier Billing (DCB) in emerging markets for Google, BlackBerry, Microsoft and Samsung, including the first Google Play carrier billing launches in South America and Africa. Over 30 activations in FY2015

·     Activated new DCB routes in high spend developed markets including Germany, Spain and United Kingdom

·     Commenced second phase roll-out of Bango Boost technology to six additional Mobile Network Operators (MNOs), following success of first phase which demonstrated 20-70% uplift in EUS

 

Outlook

·     Bango expects to deliver at least a 100% increase in annualized EUS exit run rate for FY2016. The run rate at the beginning of March 2016 was £79.4m per year

·     The pipeline for further activation opportunities increased over the last year due to the DCB ambitions of the major app stores and their associated digital content offerings. At the start of March there were 30 activations scheduled and underway for launch, and a pipeline of over 200 opportunities being pursued

·     In the year to date, growth rates have been strong across all Bango routes, including in emerging territories, as in FY2015. Bango expects growth in its high volume routes to continue to accelerate in which case overall gross margin may remain slightly below the 2% anticipated in the longer term

 

 

 

Ray Anderson, Chief Executive Officer of Bango, commented: 

"I am encouraged with the significant growth in End User Spend (EUS) and particularly that we met the challenging EUS growth expectations for the year. Bango gross margin expressed as a percentage of EUS reduced to slightly below the FY2014 levels reflecting a higher proportion of growth from established markets than expected.  

 

Importantly during FY2015 we doubled the rate of spending through the Bango Payment Platform - despite a substantial increase in the value of sterling against the major currencies that produced EUS during FY2015. Bango is cementing its market leading position at a time when DCB is becoming an increasingly popular method of payment for the growing range of services sold to mobile users over the internet. The Bango Payment Platform can deliver a more than ten-fold increase in transaction rates without additional cost. In FY2016, Bango will continue to aggressively deploy technology to drive up transactions through high volume routes, as well as to launch and nurture the emerging territories, enabling more people to spend on content.

 

Bango expects these positive trends to continue in FY2016, with the rate of EUS at least doubling again, and the EUS rate entering March is in line with that expectation.

 

During FY2015 the growth of high volume routes was faster than that on lower volume routes, primarily as a result of success with Bango Boost. Based on growth in the year to date, Bango's large routes are continuing to grow very well, following the pattern of FY2015. If that remains true for the remainder of the year, Bango's gross margin is expected to remain slightly below the 2% expected in the longer term.

 

With a stable cost base and accelerating EUS growth, Bango is confident that it remains on track to become profitable and cash flow positive within the installed processing capacity of the Bango Payment Platform."

 

 

Contact Details:

 

Bango PLC

FTI Consulting

Cenkos Securities PLC

Tel. +44 1223 472777

 

Tel. +44 203 727 1000

Tel. +44 131 220 6939

 

www.bango.com

Chris Lane

Nick Tulloch

Ray Anderson, CEO

Rob Mindell

Beth McKiernan

Gerry Tucker, CFO

Karen Tang

 

 

 

About Bango

 

Bango's mobile payment platform is vital to the global growth in digital content sales. The giants of mobile choose the Bango Payment Platform to provide a delightful and immediate payment experience that maximizes sales of digital content.

 

With over 140 payment routes activated by Bango partners, the Bango Payment Platform is established as the global standard for app stores to offer carrier billing. As the next billion consumers pick up their first smartphone, Bango technology will be there to unlock the universe of apps, video, games and other content that bring those smartphones to life. Global leaders plugging into Bango include Amazon (NASDAQ: AMZN), BlackBerry (NASDAQ: BBRY), Google (NASDAQ: GOOG), Samsung (005930: Korea SE), and Microsoft (NASDAQ: MSFT). Visit bango.com

 

 

 

Chairman's statement

 

During FY2015 Bango achieved a number of key milestones, and above all I am particularly pleased with the accelerating growth rate in EUS. Bango has continually emphasized that growing EUS is the key priority for the business in order to maintain its market leadership position and create value add for its customers. The high growth in EUS, together with the increasing number of carrier billing routes that were activated around the world in FY2015, show that Bango is delivering against its strategy to become the industry platform that enables every smartphone user to quickly and easily pay for digital content.

 

Bango technology enables very high volumes of transactions to be processed through a fixed cost system. Consequently, every transaction through the platform contributes to gross profit and increased transaction volume drives Bango towards profitability. This enables Bango to establish sustainable pricing models that have longevity as business scales up. As reporting or computations required by complex markets, currency conversion or additional technology, such as Bango Boost, are deployed through the Bango Payment Platform, additional margin can be generated without increasing the cost of delivery.

 

Bango continued to develop its relationships with the world's major app stores, opening up new markets, enabling more people to purchase app store content, and using Bango technology to deliver increased transaction success rates. The power and flexibility of the Bango Payment Platform to quickly and easily integrate carrier billing routes in new, and sometimes financially complex markets was demonstrated repeatedly. Bango took Google into new markets, and launched their first DCB activations in Africa and South America. Bango will continue to activate DCB routes in the markets that are important to Microsoft, Amazon, Google and other leading app stores. Each payment route that is activated can be used across all app store partners, building a strong network effect and contributing to the powerful analytical data that can be used to increase spending growth through the Bango Payment Platform.

 

I have been impressed by the Bango team's relentless effort to deliver even greater value for their partners through innovations such as Bango Boost, which, in initial implementations has delivered between a 20 and 70% increase to EUS in established routes. These initiatives will further support Bango's market leadership position, at a time when the mobile payments industry moves in the direction pioneered by Bango. We will continue to invest in developing technology to further similar initiatives.

 

In November 2015 Bango completed a fundraise of £11m to support growth and market expansion as an independent company with its app store partners, while maintaining a healthy balance sheet. I look ahead to FY2016 with the confidence that Bango will continue to capitalize on greater opportunities opened up through market growth, new payment routes and an increasing range of content and services promoted by the different app store partners.

 

David Sear

Chairman

 

 

CEO's statement

 

FY2015 has been a year of strong commercial progress for Bango. The Bango Payment Platform demonstrated its capability to make more sales for Bango partners by delivering accelerating growth in EUS. Bango demonstrated its increasing importance to its partners by growing its levels of activations, new routes and increasing the pipeline of activations to in excess of 200 new opportunities. I would like to thank my colleagues for their dedication in building Bango's powerful, reliable and secure payments platform and making it the number one choice in the fast growing market for app store payments.

 

Key developments in emerging markets

As a leading UK headquartered Fin-Tech business, I was invited to represent Bango alongside the UK Prime Minister on a financial technology trade delegation to South-East Asia. During the trip I was able to announce new payment routes in Taiwan and Indonesia, and the completion of seven mobile payment agreements with Mobile Network Operators across Asia. Smartphone adoption is rising fast in these markets, as are household incomes. Consumers are starting to demand content and personalization via their smartphones - normally their only route to the internet. Bango is opening up access to high quality paid content and services for these people from Google, Samsung, Microsoft and BlackBerry, and helping local developers prosper in their local market and potentially outside their home country.

 

Bango is committed to developing its business in Asia. Sales presence in the market was strengthened to include new offices in Singapore and Japan. I am delighted that we were able to hire Andy Suzuki to head Bango Japan, which was established earlier this year. Andy has held senior positions in global corporations and brings great experience developing technology partnerships with Japanese customers. While focused on Japan, he will provide senior management support for the Bango team across the Asia-Pacific region.

 

Many Bango investors are surprised to learn that payment options beyond credit cards also provide substantial uplifts in sales in developed markets where consumers have greater disposable income, and where credit cards are often more popular. In FY2015, Bango activated new DCB routes in Germany, Spain and United Kingdom for major app store partners who understand the importance of DCB alongside credit cards.  

 

Of the more than 200 opportunities that are being progressed in the activations pipeline, there is a good balance between emerging and developed markets across the major app stores.

 

Technology focus and R&D expansion

The power of a platform based internet service is that the innovations and technology that Bango develop initially for one customer, becomes available to others through the common platform, without significant further cost.

 

In many markets, mobile operators and other providers are developing innovative mobile payment systems that work alongside traditional DCB. The Bango Payment Platform can quickly and easily integrate with almost any payment system, and present these options through the standard Bango API to existing or new stores. Trials are already underway in selected markets.

 

These non-DCB payment options can often enable app stores to collect payment where DCB is not commercially viable or is blocked by regulation. Bango views this as an opportunity to provide additional value to its global partners and increase Bango's addressable market, adding more growth to the EUS processed through the Bango Payment Platform and earning additional margin.

 

To accelerate and streamline the process of launching new activations, Bango launched Bango Grid in 2015. Bango Grid also allows non-DCB payment methods to be rapidly made available alongside DCB to Bango's partners.

 

Bango systems are regularly tested to verify that they can comfortably process well in excess of $1Bn/£650m EUS per year using the current datacenters, hardware and software that deliver the Bango Payment Platform technology and services. During 2h2016 Bango will confirm that the current architecture can reliably, safely and securely process substantially beyond the currently verified levels, with little or no incremental operating cost.

 

Outlook

The wider payments market continues to evolve. Mobile payments are taking a growing proportion of the overall global payments market, and within that DCB is becoming an increasingly popular and widely available method for mobile payment.

 

Bango has pioneered DCB for 15 years and continues to maintain its pace of innovation and leadership. Building on its strong progress during FY2015 in EUS, new activations, pipeline growth and renewed app store contracts, Bango is confident that this momentum will continue into FY2016.

 

Bango's primary focus for the year is concentrated on impressing its app store partners and mobile operators by increasing EUS through the Bango Payment Platform. Most EUS growth comes from established activations, but new activations continually become established, and make significant contributions in their second and third years. FY2016 will see a greater contribution from newer markets, where DCB has only recently been launched; this will lead to more EUS from prior year activations growing the FY2016 and FY2017 EUS. As with most early stage businesses with high potential, the speed that new markets contribute significant EUS has to date been difficult to predict, but as we continue to grow the Bango footprint we are better able to determine which new markets will be significant for Bango's EUS and ultimately margin. The Bango Payment Platform can deliver a more than ten-fold increase in transaction volumes without additional cost. This enables Bango to provide its platform and services with flexible pricing to suit the needs of major partners.

 

The investments in technology and automation during the last few years have enabled Bango to reduce the human involvement in integrations, activations and the round the clock operation of datacenters and other operational processes. As a result, Bango has been able to move people from operational roles to roles that more directly drive customer success and grow EUS. For example, 24/7 staff that need to be available in case of problems are now able to spend more time training mobile operators in the use of Bango Boost tools, and in helping operators improve the performance of their DCB systems. We expect this trend to continue in the coming year, enabling Bango to spend more time providing app stores and mobile operators with tools to grow their EUS, without increasing Bango costs.

 

 

Ray Anderson

Chief Executive Officer

 

 

CFO Statement

 

End User Spend

Bango has achieved significant growth in EUS, up 78% to £44.7m from £25.2m. Bango also saw over 100% growth in the December 2015 annualized EUS figure compared to December 2014, resulting in an exit run rate of £67m. This growth in EUS is particularly impressive considering the substantial adverse impact of foreign exchange movements in the currencies of Bango's largest markets. Bango is positive that the rapid growth in EUS will continue in FY2016 and this growth will be achieved from existing and new activations. As Bango continues to progress its strategy of activating the major app stores to a growing number of mobile operators, the growth in EUS will continue.

 

App stores or mobile operators pay Bango a share of their EUS. The Bango Payment Platform that delivers this service can handle substantially higher volumes at a fixed cost and is treated as a fixed operational expense. With no cost for processing transactions, the increasing EUS leads to increasing fees which all contribute towards gross profit.

 

Turnover

Turnover is a blended figure made up from 100% of the value of EUS transactions where Bango is the principal and the gross profit only where Bango is an agent, combined with the total value of platform fees. Turnover in FY2015 was £3.2m compared to £5.1m in FY2014 due to the growth of agency sales through the platform; if the agency revenue continues to grow faster than the principal business then the total gross margin would still grow even if turnover decreases.

 

Margin expressed as a percentage of End User Spend

Gross margin on end user activity for the period was £0.8m, showing an increase from £0.6m in FY2014. Margin has not kept pace with EUS, because a significant part of growth in EUS came from larger, developed markets. Fees charged for incremental volumes in these markets are generally lower as a proportion of EUS than in early stage markets which are at lower volumes and which may have higher per transaction fees.

 

Blended margin for the year was 1.8%. The key factors driving this blended margin are:

 

-     Large route growth: There is considerable focus on deploying Bango Boost technology to grow the largest routes as quickly as possible. These have the biggest impact on the success of Bango partners. Due to the volume based pricing on some of these routes, the faster the growth, the more impact there will be on driving down the percentage margin, although the absolute margin always increases with volume

-     New route deployment: There are dozens of smaller routes across a range of app stores, more than 30 are currently scheduled for deployment and a pipeline of over 200 routes opportunities for activation. Many of these routes have contracted fees considerably in excess of the long term 2% blended outlook

 

At this stage in 2016 it is difficult to predict the growth pace of new routes, in the year to date, the larger routes are continuing to grow very well, following the pattern of FY2015. If Bango's larger routes do continue to significantly outperform less developed markets, the blended margin may reduce further - even though the absolute gross profit will rise.

 

There was a decrease in platform fees to £0.5m (FY2014: £0.7m) as a result of Bango's strategy announced in 2014 to remove potential barriers to entry that may impact growth in EUS.

 

The total gross profit for the year was £1.3m, compared to £1.3m for the FY2014, with the reduction in platform fees balanced by growth in EUS margin.

 

Administrative expenses

Administrative expenses were lower in FY2015 at £4.4m compared to £5.0m in FY2014. This reflects operational processing efficiencies resulting from previous investment and development of the platform, as well as transfer of duties from operational tasks to customer education around Bango Boost technology. This decrease in administrative expenses resulted in a reduction in the operating loss to £5.0m (FY2014: £5.4m).

 

Amortization of intangible assets in the year was £1.0m (FY2014: £0.8m) as further R&D projects capitalized in prior years were deployed. Depreciation for the year totaled £0.5m (FY2014: £0.5m).

 

Share based payment costs of £0.4m in FY2015 (FY2014: £0.4m), are part of the compensation package that Bango uses to attract and retain key employees in such a competitive market.

 

Raising of additional capital

In December 2015, Bango raised £11.0m before expenses in a placing of 12,222,222 new ordinary shares, with both new and existing institutional investors. The funding is expected to take Bango comfortably through to profitability and ensure sufficient cash reserves to give comfort to current and future Bango partners.

 

Balance sheet

Net assets of Bango were £15.9m at 31 December 2015 (at 31 December 2014: £9.8m).

 

Cash balances increased to £12.1m at 31 December 2015 (at 31 December 2014: £6.3m), this was driven by the increase in cash from the fundraise which raised £10.4m (net of fees) at the end of the year. With a stable cost base, and a future of growing margin Bango should move closer to cash generation.

 

Intangible assets remained consistent at £3.4m (at 31 December 2014: £3.5m) as a result of on-going internal development work being capitalized, compensating for the amortization charges in the year.

 

Total borrowings are £0.4m (at 31 December 2014: £0.6m), and consist only of finance lease liabilities. Of the total borrowings, £0.3m is classed as current (at 31 December 2014: £0.3m) and £0.1m is classed as non-current (at 31 December 2014: £0.3m).

 

Investment in new markets

During FY2015 and in the first quarter of FY2016, Bango invested in developing the appropriate corporate and contractual structures to support new territories. Structures may be established to support a market by deployment of technology but without a Bango entity - as in India for example, or by the creation of new group entities being set up, as in Nigeria and Japan. These structures support the high levels of EUS expected by Bango partners in these markets. There was an increase in spending on sales and marketing activities to train partners in the use of Bango technology to grow EUS, and to develop new markets and expand opportunities for EUS growth. This spending has been offset by substantial efficiency gains in operational areas due to deployment of Bango technology, and insourcing of previously outsourced services to reduce costs going forward and improve quality and reliability.

 

Gerry Tucker

CFO

 

 

Audited results for the year ending 31 December 2015

 

Consolidated statement of comprehensive income

 

 

31 Dec 2015

31 Dec 2014

Note

£

£

Alternative performance measure (Non-IFRS)

End User Spend

3

44,684,300

25,167,767

 

Turnover

3

3,199,566

5,093,952

Attributable to digital merchants

3

(1,024,793)

(2,703,363)

 

 

 

 

 

 

2,174,773

2,390,589

Cost of sales - payment providers

3

(907,697)

(1,051,928)

 

 

 

 

Gross profit

1,267,076

1,338,661

 

 

 

 

 

Other administrative expenses

3

(4,411,328)

(5,017,665)

Share based payments

3

(433,434)

(395,110)

Depreciation

3

(484,871)

(542,882)

Amortization

   3

(969,013)

(801,484)

 

 

 

 

Total administrative expenses 

 

(6,298,646)

(6,757,141)

 

 

 

 

Operating loss

 

(5,031,570)

(5,418,480)

 

 

 

 

Interest payable

 

(20,865)

(24,116)

Investment income

 

24,327

26,610

 

 

 

 

Loss before taxation

 

(5,028,108)

(5,415,986)

 

 

 

 

Income tax

 

215,317

266,210

 

 

 

 

Loss and total comprehensive loss for the financial year

 

(4,812,791)

(5,149,776)

 

 

 

 

Attributable to equity holders of the parent

 

(4,812,791)

(5,149,776)

 

 

 

 

 

Loss per share attributable to the equity holders of the parent

Basic loss per share

 

(9.05)p

(10.96)p

 

 

 

 

Diluted loss per share

 

(9.05)p

(10.96)p

 

All of the activities of the Group are classed as continuing.

 

 

Consolidated balance sheet

 

 

                          31 Dec 2015

31 Dec 2014

 

 

£

£

 

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

 

507,295

777,254

 

Intangible assets

 

3,446,612

3,491,252

 

 

 

 

 

 

 

3,953,907

4,268,506

 

Current assets

 

 

 

 

Trade and other receivables

 

1,128,897

1,109,816

 

Research and Development tax credits

 

225,974

236,028

 

Cash and cash equivalents

12,135,326

6,253,487

 

 

 

 

 

 

13,490,197

7,599,331

 

 

 

 

 

Total assets

17,444,104

11,867,837

 

 

 

 

 

EQUITY

 

 

 

Capital and reserves attributable to equity holders of the parent company

 

 

 

Share capital

 

12,886,350

10,399,463

 

Share premium account

 

30,101,510

22,098,603

 

Merger reserve

 

1,236,225

1,236,225

 

Other reserve

 

1,896,842

1,526,650

 

Accumulated losses

 

(30,211,087)

(25,461,538)

 

 

 

 

 

 

Total equity

 

15,909,840

9,799,403

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

1,170,244

1,478,293

 

Finance lease liabilities

 

268,476

296,817

 

 

 

 

 

 

 

 

1,438,720

1,775,110

 

Non-current liabilities

 

 

 

 

Finance lease liabilities

 

95,544

293,324

 

 

 

 

 

 

 

95,544

293,324

 

 

 

 

 

Total liabilities

1,534,264

2,068,434

 

 

 

 

 

 

 

 

 

Total equity and liabilities

17,444,104

11,867,837

 

 

 

 

 

 

 

Consolidated cash flow statement

 

 

31 Dec 2015

31 Dec 2014

 

£

£

 

 

 

 

Net cash used by operating activities

 

(3,234,118)

(3,177,167)

Cash flows used by investing activities

 

 

 

Purchases of property, plant and equipment

(129,705)

(108,980)

Addition to intangible assets

(924,373)

(914,864)

Interest received

24,327

26,610

 

 

 

Net cash used by investing activities

(1,029,751)

(997,234)

Cash flows generated from financing activities

 

 

Proceeds from issuance of ordinary shares

11,107,518

6,086,582

Costs associated with issuance of ordinary shares

(617,723)

(394,961)

Interest payable

(20,865)

(24,116)

Capital payable on finance lease obligations

(311,329)

(338,911)

 

 

 

Net cash generated from financing activities

10,157,601

5,328,594

 

 

 

 

 

 

 

Net increase in cash and cash equivalents 

 

5,893,732

1,154,193

 

 

 

 

Cash and cash equivalents at beginning of year

 

6,253,487

5,110,366

 Exchange differences on cash and cash equivalents

 

(11,893)

(11,072)

 

 

 

 

 

 

6,241,594

5,099,294

 

 

 

 

Cash and cash equivalents at end of year

 

12,135,326

6,253,487

 

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

 

 

Share

Share

Merger

Other

Retained

Total

 

capital

premium

reserve

reserve

earnings

 

Group

 

account

 

 

 

 

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Balance at 1 January 2014

9,122,069

17,684,376

1,236,225

1,968,834

(21,149,056)

8,862,448

Share based payments

-

-

-

395,110

-  

395,110

Share based payment transfer for exercises

-

-

-

(837,294)

837,294

-

Exercise of share options

27,394

59,188

-

-

-

86,582

Issue of shares

1,250,000

4,750,000

-

-

-

6,000,000

Expense of share issue

-

(394,961)

-

-

-

(394,961)

Transactions with owners

1,277,394

4,414,227

-

(442,184)

837,294

6,086,731

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

(5,149,776)

(5,149,776)

Total comprehensive income

 

 

 

 

 

 

for the year

-

-

-

-

(5,149,776)

(5,149,776)

Balance at 31 December 2014

10,399,463

22,098,603

1,236,225

1,526,650

(25,461,538)

9,799,403

 

Balance at 1 January 2015

10,399,463

1,236,225

1,526,650

(25,461,538)

9,799,403

Share based payments

-

-

-

433,434

-  

433,434

Share based payment transfer for exercises

-

-

-

(63,242)

63,242

-

Exercise of share options

42,443

65,075

-

-

-

107,518

Issue of shares

2,444,444

8,5555,556

-

-

-

11,000,000

Expense of share issue

 

(617,724)

 

 

 

(617,724)

Transactions with owners

2,486,887

8,002,907

-

370,912

63,242

10,923,228

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

(4,812,791)

(4,812,791)

Total comprehensive income

 

 

 

 

 

 

for the year

-

-

-

-

(4,812,791)

(4,812,791)

Balance at 31 December 2015

12,886,350

30,101,510

1,236,225

1,896,842

(30,211,087)

15,909,840

 

 

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 2015 (including the comparatives for the year ended 31 December 2014).

 

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 2015, 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 14 March 2016.

The preliminary financial information does not constitute statutory financial statements for the year ended 31 December 2015 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 2014 have been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2015 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. Due to the complex contracts in place the turnover figure in the Report and accounts is a mixture of gross transaction value where Bango is principal and margin only where Bango is agent. This is to comply with relevant accounting rules, however, the 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 Bango stakeholders and to assist users of the Bango financial statements, we include this additional reporting.

 

 

31 Dec 2015

31 Dec 2014

 

£           

£           

End User Spend

44,684,300

25,167,767

Analyzed as agency

42,538,240

21,127,767

Analyzed as principal

2,146,060

4,040,494

 

 

 

Analyzed as agency

95%

84%

Analyzed as principal

5%

16%

 

 

(b) Turnover 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 the Group'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. 

 

12 months to 31 December 2015

 

End user

Platform

Group

Total

 

activity

fees

 

 

 

 

 

 

 

 

£

£

£

£

 

 

 

 

 

Segment turnover

2,741,385

458,181

-

3,199,566

Attributable to digital merchants

(1,024,793)

-

-

(1,024,793)

Cost of sales - payment providers

(907,697)

 

-

(907,697)

 

 

 

 

 

Segment gross profit

808,895

458,181

-

1,267,076

 

 

 

 

 

Administrative expenses

-

-

(4,411,328)

(4,411,328)

Share based payments charge

-

-

(433,434)

(433,434)

Depreciation

-

-

(484,871)

(484,871)

Amortization

-

-

(969,397)

(969,397)

Interest payable

-

-

(20,865)

(20,865)

Interest income

-

-

24,327

24,327

 

 

 

 

 

Segment net profit/ (loss)

808,895

458,181

(6,295,184)

(5,028,108)

 

 

 

 

 

 

 

 

 

 

Segment assets

500,789

192,524

16,750,791

17,444,104

 

 

 

 

 

Segment liabilities

(379,890)

(7,235)

(1,147,139)

(1,534,264)

 

 

 

 

 

Net assets

120,899

185,289

15,603,652

15,909,840

 

 

12 months to 31 December 2014

 

End user

Platform

Group

Total

 

activity

fees

 

 

 

 

 

 

 

 

£

£

£

£

 

 

 

 

 

Segment turnover

4,358,107

735,845

-

5,093,952

Attributable to digital merchants

(2,703,363)

-

-

(2,703,363)

Cost of sales - payment providers

(1,051,928)

-

-

(1,051,928)

 

 

 

 

 

Segment gross profit

602,816

735,845

-

1,338,661

 

 

 

 

 

Administrative expenses

-

-

(5,017,665)

(5,017,665)

Share based payments charge

-

-

(395,110)

(395,110)

Depreciation

-

-

(542,882)

(542,882)

Amortization

-

-

(801,484)

(801,484)

Interest payable

-

-

(24,116)

(24,116)

Interest income

-

-

26,610

26,610

 

 

 

 

 

Segment net profit/ (loss)

602,816

735,845

(6,754,647)

(5,415,986)

 

 

 

 

 

 

 

 

 

 

Segment assets

598,344

156,756

11,112,737

11,867,837

 

 

 

 

 

Segment liabilities

(1,166,615)

-

(901,819)

(2,068,434)

 

 

 

 

 

Net (liabilities)/ assets

(568,271)

156,756

10,210,918

9,799,403

 

 

 

 

 

Included within the end user segment turnover is £2.15m (31 December 2014: £3.94m) relating to a major strategic partner, and included within platform fees there was £0.22m (31 December 2014: £0.34m) relating to one strategic partner. 

 

End user activity is the content access fees paid by end users for accessing chargeable content provided by digital merchants, adjusted to take account of whether Bango is agent or principal in the transactions. 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.

 

Platform fees are the amounts paid to Bango by digital merchants and others for package fees and other services including analytics and operator connections. Assets for this segment are amounts due for package fees and other services. Liabilities for this segment represent deferred income for package fees. Group assets include non-current assets and cash and cash equivalents. Group liabilities relate to administrative expenses.

 

 

(c) Geographical analysis

Bango's turnover from external customers is divided into the following geographical areas.

 

 

31 Dec 2015

31 Dec 2014

 

£           

£           

United Kingdom (country of domicile)

129,265

501,050

EU

171,631

335,025

USA and Canada

983,089

1,873,752

Indonesia

978,529

1,258,342

Rest of World

937,052

1,125,783

 

 

 

 

3,199,566

5,093,952

 

 

 

 

Segment turnover is based on the location of the customers. Of which in platform fees £0.22m (FY2014: £0.34m) came from a strategic partner based in the USA and Canada. All turnover from end users is spread over many territories.

 

All of the other notes to the accounts are included in the "Annual Report 2015" which is available to download from bango.com

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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