24th Sep 2014 08:56
LONDON (Alliance News) - Bango PLC, the mobile payments company, Wednesday said its first-half pretax loss widened as changes in its method of charging platform services fees ate into margins amid an effort to speed up the integration of mobile network operators.
In a statement, Bango, which enables smartphone users to make purchases for apps, games and content without the need to own or register a credit card, said it made a GBP2.6 million pretax loss in the six months ended June 30, compared with GBP1.8 million in the corresponding period last year.
Its key indicator of end user spend, which measures transactions processed through its payments platform, increased to GBP10.7 million from GBP6.6 million. Bango said the growth can be primarily attributed to smartphone transactions through major app stores, with contributions from Google Play and BlackBerry World, and increases in the number of territories where these app stores are integrated.
However, revenue, which is made up of end user activity fees and platform services fees, fell to GBP3.0 million from GBP4.5 million, which Bango said includes agency fees in the end user activity.
Gross profit fell to GBP714,305 from GBP1.2 million. In particular, Bango said gross profit from platform services, which includes analytics fees and fees for integration with the Bango Platform, fell to GBP440,000 from GBP990,000, due to the shift in the pricing model from upfront fees to monthly fees for mobile network operators (MNOs) to increase the pace of operator integrations and provide recurring revenue.
Total margin as a percentage of turnover was 23.5%, Bango said, down from 26.4% a year before.
Administrative expenses rose to GBP3.4 million from GBP3.0 million. Bango said its cost base reflects "the planned and managed investment in people and technology".
In addition, Bango said it has been working hard in the first half to integrate a major global app store with its platform. It said it has concluded a commercial deal with "this key industry player" and said it expects to provide more details about the deal later in 2014.
The news comes after Bango last week reported that Amazon had gone live with Bango billing. On Wednesday, Bango said it is already seeing users of Amazon's app store making payments through its platform.
Chief Executive Ray Anderson said Bango showed good progress in the first half.
"Firstly, more MNOs have integrated with the Bango Platform to offer their billing capabilities to app stores. Secondly, the leading app stores have activated more Direct Carrier Billing through the Bango Platform into existing and new MNO integrations," Andersons said.
"The resulting significant and accelerating growth in end user transaction value demonstrated in the data Bango has released today shows that this strategy is working well. The pipeline of further Bango activations for the major app stores and additional MNO integrations is strong and growing," Anderson added.
Bango shares were Wednesday quoted down 3.9% at 99.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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