Apps like Pokémon GO boost Bango's performance in first half

Bango, the mobile payments company, exceeded its expectations on end user spends (EUS) for the first half with popularity rising for apps like Pokémon GO.

The company provides a direct carrier billing (DCB) platform that allows to customers to buy apps and charges them through their mobile phone bill.

The firm’s EUS has grown over five times or 150% year on year to £46.17m. In June alone annualised EUS was £159m, 250% more than in June 2015. The EUS margin was in line with forecasts at 1.67%

Gross profit on EUS increased by 39% year-on-year to £0.85m.

According to the firm, the growth in EUS is fuelled by four driving forces - wider smartphone usage, an increasing range of content and services becoming available to users, the activation of additional routes to collect payments from more users and technology developed by the company to improve the customer experience and increase sales.

The firm did however make an adjusted operating loss before interest, tax, depreciation and amortisation (LBITDA) of £1.64m, which improved in comparison to the loss in the previous year of £1.82m.

The firm’s operating expenses were broadly stable at £2.49m compared to £2.43m in 2015.

Cash balance was £7.24m at 30 June 2016, which the firm believes is sufficient to fund the group through to profitability.

In the first half the firm acquired US carrier business BilltoMobile for £2.15m in cash and £0.35m in shares. The deal brought in an initial £55m annualised EUS along with new customers to the company’s payment platform including significant Google Play EUS within existing operational cost base.

The firm has expanded its operations globally with senior hire and Tokyo office in Asia as well as new app store billing route set up in India, Norway, Finland, Belgium, Australia, Indonesia and Malaysia. The firm established a strategic partnership with Danal to expand its reach of the payment platform into Korea and China.

The firm launched DCB for Google Play with Idea Cellular and expanded integration with Microsoft to deliver it across all Windows 10 devices.

The firm has a pipeline of 200 opportunities being pursued which the firm believe will materialise into a further increase in EUS in the future.

Chief executive Ray Anderson said: "Today's results show End User Spend (EUS) growth ahead of expectations. EUS is up by a factor of six since the beginning of last year, and is flowing through into gross profit growth. This demonstrates the ability of the Bango business to handle this rapid pace of growth and add new customers to the platform on a stable cost base.”

With these four growth factors driving Bango's high revenue growth on a stable cost base, we remain confidently on track to become profitable and cash flow positive using Bango's current resources.

The share price fell 2.15% to 91p at 1157 BST on Tuesday.