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BGO Bango Plc

103.50
-1.50 (-1.43%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Bango Plc LSE:BGO London Ordinary Share GB00B0BRN552 ORD 20P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.50 -1.43% 103.50 102.00 105.00 105.50 103.50 105.00 88,136 16:17:11
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Radiotelephone Communication 28.49M -2.14M -0.0279 -37.10 79.46M

Bango PLC Final Results (4814H)

13/03/2018 7:00am

UK Regulatory


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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

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March 13, 2018 03:00 ET (07:00 GMT)

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