Monitise slashes H2 operating costs

• Monitise's FY 2016 results confirm substantial improvement in operating figures in the second half
• FINKit®3, our new business unit which enables banks and financial services organisations to transform their digital services, launched during the year generating initial revenues in the second half of FY 2016, and received a positive response from current and potential clients and partners
• Full year revenue of £67.6m declined 24.7% compared to the prior year as anticipated but stable half-on-half and in line with previous guidance
• Monitise reported half-year EBITDA profitability of £0.6m in the second half of the year in line with previous guidance
• Cash flow stabilised with positive cash from operations in the second half, and cash usage down 84% compared to the same period in FY 2015
• Improved transparency with disclosure of revenue and EBITDA of six business units including the new FINKit® business

Monitise CEO Lee Cameron said: 'In my first year as CEO we have made substantial progress in making Monitise a more stable and simpler business which is well positioned to achieve profitability. At the EBITDA level we recorded a small profit in the second half of the year. Our restructuring has halved operating costs in the second half of the year and reduced headcount by 41 per cent compared to a year ago while maintaining our high client service levels and launching our FINKit® digital banking and financial services product.'

Monitise Chairman Peter Ayliffe said: 'The past year has seen an unprecedented amount of change throughout both the business and the Board. However, I am pleased to report that the outcome is a business which is much better managed, and much more appropriately structured for successful longer-term profitable growth based on its business unit focus, FINKit® platform and associated capabilities.'

Outlook

Monitise expects FINKit® revenue to grow strongly, albeit from a low base. As previously stated, overall Group revenue is expected to decline, driven by the full year revenue impact of the completion of professional services contracts during FY 2016. FY 2017 will benefit from the full year effect of cost savings made during FY 2016. At 31 August 2016 headcount had further fallen to 469.

FINKit® represents a significant opportunity for Monitise to establish long-term sustainable growth, and we will continue to invest in developing that part of our business throughout the current financial year. Overall, capital expenditure requirement is expected to be lower than in FY 2016 and we will continue to evaluate all the Group's assets to make sure that they remain relevant to our strategy and add to our value.