Monitise on the block after sales targets missed
ONCE one of London’s shining financial technology stars, Monitise put itself up for sale yesterday after issuing its third revenue warning in 12 months.
Business giant IBM, a close partner of Monitise since 2013, was among the interested parties considering a bid for the firm yesterday, City A.M. understands.
Monitise shares collapsed 25 per cent after it posted a statement announcing a review of its strategic options, warning that full-year revenue would be below its expectations and blaming its transition to a subscription-based business model.
Monitise – whose 350 customers include Telefonica, Santander and MasterCard – said it is considering all options including a potential sale and stock market listings under the review, which will be conducted by financial adviser Moelis & Co.
“In our business and the review we are now embarking on, we remain focused on ensuring the best possible outcome for all Monitise stakeholders,” said co-chief executives Alastair Lukies and Elizabeth Buse in a statement.
Monitise also said it expects a full-year loss of between $60m (£40m) and $76m, wider than market estimates.
Prior to the announcement, the company’s 2015 loss was forecast at £33.24m by analysts.
However, the company said it still expected to turn profit in 2016, helped by cost savings from the re-shaping of the business.
“Monitise is announcing that it is commencing a review of its business that will incorporate a ‘formal sale process’. We continue to see strategic value in the assets of the business given the importance of mobile banking to banks which is a clearly growing channel of engagement for them and their customers,” said UBS analyst David Mulholland, who reiterated a buy rating on Monitise with a target price of 75p.
Shares in Monitise closed at 15p in London yesterday, a fall of over 80 per cent in the last 12 months. IBM did not respond to requests for comment.