Monitise goes up for sale as business transition falters
The mobile banking software provider has been struggling to complete a transformation of its business, after declaring last year that it would move to a subscription-based selling model. This is despite successes including a partnership with IBM and investment deals with Santander, Telefonica and Mastercard.
In its half year results the loss-making company warned that a previous 2015 revenue growth target of 25 percent would not be met, with revenues remaining flat at between £90-£100 million.
Licence revenues for the first six months almost halved, down 47 percent to £4.4 million, while integration income dropped 13 percent to £21.8 million. At the same time, subscription revenues grew slowly, up only 8 percent to £16.2 million.
The company also saw its share price drop 10 percent following the results release, after plummeting almost 75 percent in a year in which it appeared to be losing a major strategic investor, Visa.
Monitise said that it is now undergoing a strategic review of its business to provide better value to shareholders, and would consider a takeover bid. It stated that the board "recognises that there may be other businesses which could leverage Monitise's capabilities for digital commerce enablement", in order to hasten growth and capitalise on interest in mobile banking and payments.
A number of steps have already been taken by Monitise to overhaul its business during the past year, including changes to key personnel - such as the appointment of a former Visa exec Elizabeth Buse as joint CEO, the hiring of the payment provider's former CTO and global head of technology, and the departure of CIO Mike Keyworth.
In addition to a major deal with IBM - a potential buyer of the company - involving hundreds of staff transferred to the services firm, Monitise also pointed to the a seven-year contract to provide services to UK bank, Virgin Money.
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