Revenue warning hits Bango share price
Bango plc, the Cambridge mobiles content facilitator, saw 41.57p – 22.37 per cent – chipped off its share price immediately after announcing a revenue warning.Bango plc, the Cambridge mobiles content facilitator, saw 41.57p – 22.37 per cent – chipped off its share price immediately after announcing a revenue warning.
Posting revenue growth of 121 per cent for the year ended March 31 and flagging up further strong expansion prospects in Europe and the US, failed to protect Bango from a market backlash.
Chief executive Ray Anderson warned: “We have experienced longer than expected lead times between a new content provider signing up and its marketing activity that drives end user spend.
“Accordingly we are lowering our expectations of the growth in end user spend outside the UK for the current financial year.”
Although Anderson was upbeat about future growth opportunities, the share price fell to 144p on the news.
Revenues for the year ended March 31, were up to £7.53m but heavy expansion costs meant the company reported a pre-tax loss of £1.3m.
Bango has developed and deployed an open, global infrastructure platform that enables content providers to market, sell and deliver their products and services directly to mobile phone users on all mobile networks using the internet.
Operating expenses increased by 92 per cent to £3.72m due to expansion into new
territories, product development and increased marketing spend but the pre-tax loss was down to 17.7 per cent of revenue from 26.9 per cent last time.
Bango said its UK operation was profitable and cash generative. Anderson added that pursuing growth opportunities globally could bring a handsome payback.
Content access (end user) fees more than doubled to £6.47m (£2.90m) and content provider (package) fees more than trebled to £1m (£0.31m).
Bango grew its customer base significantly to include Channel 4, Sony BMG, The Sun and EMI and expanded into the US, Spain and Germany. It also services Manchester United among other global brands.
New agreements were signed with four mobile network operators – Orange, O2, Proximus and Cingular Wireless – and an additional agreement with Telefónica has been signed post year end.
Anderson said: “Last year was an excellent one in the development of Bango. We have established a strong and scalable business with a unique industry position.
“Our growth is accelerating and the market, although at an early stage, continues to develop in our favour.
“In the UK we continue to see strong growth in both content provider sign ups and end user spend. In other territories, including the US, we are also seeing strong growth in content provider sign ups. We are in a strong financial position to capitalise on our growth opportunities.”
Bango says the US market is showing tremendous potential but it believes that initial US growth in end user spending on content will be slower than that experienced in European markets.