BANGO PLC Trading Update & Notice of Results

BANGO PLC Trading Update & Notice of Results

Bango, the mobile payments and analytics company, today provides a trading update for the year ending 31 March 2012 and informs that Interim Results will be announced on Tuesday 29 November 2011.

  • Although the rate of carrier live launches has increased, growth from end user spend is increasing more slowly than anticipated
  • Third major App Store is in the final stages of completion and is expected to be signed in this calendar year
  • The Board is satisfied that the smart phone strategy is proving successful and that the Company has established a foundation for an increased rate of growth
  • Cash position increased to £2.7M, which is ahead of forecasts (30 September 2011)

While strong progress in executing the strategy has been made in the first half of the year, the current level of revenue growth, although accelerating, is unlikely to meet market forecasts for the full year.

The number of carriers now connected via Bango to the RIM App Store has increased to 17 from one this time last year, however the growth rate of new carrier revenues is slower than anticipated once carrier billing is activated. New App Store software and promotions are being deployed, including a new version of Blackberry App World which should help to drive revenues in the second half and beyond.

As at 30 September 2011, Bango had started the process of billing integration for a further 43 carriers. Many of the barriers to the integration process have also been removed. A small connection fee is received by Bango for each carrier integrated and the increased number of carriers also provides the platform for more end user revenue. The Board is confident that it will see acceleration in both the process of integration and revenues in the second half of the year.

In addition, the BlackBerry Messenger Music service has now been released. Revenues from this subscription music service are expected to contribute in financial Q4, after the initial 60 day free period when registered users convert into paying subscribers.

Revenues from the Opera App Store commenced in the period and are now accelerating, with carrier billing activated in North America and the UK.

While it is disappointing not to be further along the projected revenue growth trajectory, the Board is confident that it can build on the operational progress made in the first half of the year to deliver an increase in transactional revenue. An indicator that this process has begun was the return to growth of end user spend from May 2011 onwards, driven by increasing smart phone apps transactions. A key driver for the further increase in end user spend revenues will be increased app and music sales by RIM, progress in which will be closely monitored by Bango and shareholders updated accordingly.

Bango continues to closely control costs, accordingly net cash balances at 30 September 2011 were strong at £2.7M (30 September 2010: £1.16M).

App Store Progress
Following Bango's transition towards the high growth smart phone market, Bango now has two major App Store customers, RIM and Opera, and anticipates announcing a third major App Store customer before the end of the calendar year.

Bango's unique billing technology provides it with a strong competitive advantage in the smart phone billing market, providing what we believe are the best conversion rates in the industry. Bango's ability to identify and bill mobile device users based on its BillRank technology ensures greater numbers of users can pay, even compared to a store provider connecting directly to an operator. With 17 operators from around the world now connected to the RIM store via Bango's platform - which already supports over 60 carriers - the scalability of the Bango platform is clear.

As a result of its proven technology, Bango is winning competitive processes which lead to contracts and then deployments. Bango is in discussion with large companies who undertake a thorough evaluation of what is a key technology for their business. While this is to Bango's advantage in demonstrating the competitive strength of Bango's offering, the cycle from competitive process, to the conclusion of a contract, to roll out of the technology and revenue generation, can be lengthy.

The Bango Analytics product has made good progress in the smart phone market, with app analytics now deployed in iPhone, iPad, Blackberry, Android, Windowsphone, Symbian and Qt applications, meaning the market for this product line is significantly increased. In the period Bango saw a 197% increase in analytics transaction volumes, driven by activity from Turner, Telefonica, Thomson Reuters and others, and revenues for this part of the business are in line with expectations.

Notice of Results
Bango will be announcing Interim Results for the half year ended 30 September 2011 on Tuesday 29 November 2011. The management team will be hosting a presentation for analysts at 11.30am on the day at the offices of Threadneedle Communications. Analysts who wish to register for the meeting should contact Fiona Conroy at the telephone number below. The presentation will be available from the Investor section of the Bango website.

Ray Anderson, CEO, commented: "Following the implementation of our smart phone market strategy we are now starting to see an increase in revenues. While this increase has not yet been at the rate that we originally anticipated, we believe we have the right foundations in place to generate growth. We are delivering services to large companies for whom mobile billing is critical. It is therefore a decision they need to get right. This is both advantageous to us, as we believe we're the only company able to deliver the services that they require, but similarly it can mean
detailed and extensive negotiations and planning. Nevertheless, we believe we are on track to announce further major App Store customers in the coming months. We therefore continue to be confident in our ability to capitalise on the significant market opportunity for Bango."

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