Shares of Monitise Plc (MONI.L) declined around 4 percent in London trading after the IT services and consulting company Monday reported wider loss in its fiscal year 2014 with higher costs, despite strong revenue growth. The company also said its user generated revenue growth slowed in the year.
For the year, loss before income tax was 63.44 million pounds, compared with 51.05 million pounds loss last year. The company incurred higher cost of sales especially in the second half of the year.
The company's loss after tax was 60.07 million pounds or 3.6 pence per share versus 51.3 million pounds or 3.8 pence per share loss a year ago. Adjusted loss for the year, which excluded certain items, totaled 43.7 million pounds, compared to loss of 32.8 million pounds in the previous year. Adjusted loss per share was 2.6 pence, compared to 2.4 pence a year ago.
According to the firm, the increased loss was largely driven by growth in headcount and the impact of acquisitions in the year.
Group EBITDA loss was 31.4 million pounds, compared to loss of 19.3 million pounds a year ago, and were in line with management expectations. The wider loss was driven by investment in product and sales in particular in the second half of the year as the strategy to accelerate user growth was put in place.
However, revenue for the year climbed 31 percent to 95.1 million pounds from 72.8 million pounds last year.
After strong triple-digit percentage growth in last year, user generated revenue growth slowed to 17 percent at 50.6 million pounds,while development & integration revenue accelerated 51 percent, reflecting first phases of work on large contracts including Telefónica. On a geographic basis, UK revenue rose 54 percent reflecting wins and the development & integration revenue growth. Americas revenue declined 9 percent, principally due to a decline in development & integration revenue.
Group gross margin was 69 percent, lower than prior year's 76 percent.
As of June end, registered users were 30 million, compared with 23 million a year ago. The company processed payments and transfers worth $88 billion as at end June 2014 on annualised basis, compared with $40 billion a year ago.
Further, the company said its annual revenue and profit guidance remains unchanged, and still expects revenues to grow at least by 25 percent in fiscal 2015.
The company also expects to be EBITDA profitable in FY 2016, with revenue growth accelerating.
For 2018, the company still expects 200 million registered users at 2.50 pounds ARPU, EBITDA margin of at least 30 percent and sustainable gross margin above 70 percent.
Monitise continues to consider a move to a main London Stock Exchange listing.
The company also announced a strategic partnership with Santander to develop and deploy a series of mobile banking innovations. Monitise also said it will connect to IBM hosting facilities based in North Carolina.
In London, Monitise shares were losing 2 pence or 4.30 percent, and trading at 44.50 pence.
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