30th Jun 2009 11:04
Tuesday 30 June 2009
Monitise plc
Global Alliance Agreement with Visa International
Subscriptions for new Monitise ordinary shares to raise £5.1m.
Pre-close Trading Update for the twelve months ending 30 June 2009
Monitise plc ("Monitise" or "Company" LSE: MONI.L), the mobile money specialists, today announces a global strategic alliance agreement with Visa International Service Association ("Visa International"), a subsidiary of Visa Inc., Subscriptions for a total of 73.2 million new ordinary shares to be subscribed by Visa International and others and a pre-close Trading Update for the twelve months ending today, 30 June 2009.
GLOBAL ALLIANCE AGREEMENT WITH VISA INTERNATIONAL
The Board of Monitise is delighted to announce that it has today entered into a global strategic alliance with Visa International, a subsidiary of Visa Inc. (NYSE:V), the world's largest retail electronic payments network.
The five year agreement, which has a contract value of $13 million dollars in addition to ongoing licence, service and development fees, combines Visa's unmatched reach, payments expertise and trusted brand with the Monitise Mobile Money platform and toolkit.
Monitise will be a strategic development partner for Visa's comprehensive suite of mobile services, including payments, mobile money transfer, mobile transaction alerts and mobile marketing offers to support Visa's mobile strategy to extend the reach of its global network to the more than 4 billion mobile devices around the world.
SUBSCRIPTIONS FOR NEW ORDINARY SHARES IN MONITISE
In addition to announcing the global strategic alliance with Visa International, Monitise has entered into agreements with Visa International and other existing shareholders, namely UBS Global Asset Management and Capital Group, to subscribe for an aggregate of 73.2 million new ordinary shares at a price of 7p, representing a premium of 33% to the closing price of 5.25p on 29 June 2009 (the "Subscriptions").
Following the Subscriptions, Visa International will own 14.4% of the enlarged issued share capital of Monitise, UBS Global Asset Management will own 12.9% and Capital Group will own 5.8%. The new shares will, if issued, rank pari passu in all respects with the Company's existing ordinary shares.
Visa's appointee will take a seat on Monitise's Advisory Board and also has the option to nominate a representative to the main Board.
The Subscriptions are subject, inter alia, to Monitise shareholder approval, admission of the new shares to trading on AIM and no material adverse change having occurred in relation to Monitise before completion of the Subscriptions. The Board of Monitise (with an aggregate shareholding of 6.6% of the current issued share capital of Monitise) unanimously recommends that shareholders vote in favour of the resolutions required to complete the Subscriptions and each Board member intends to vote in favour in respect of his own shareholding. Furthermore, Monitise has received expressions of support for the Subscriptions from shareholders, which, when taken together with the shareholdings of members of the Monitise Board, represent in excess of 50% of the current issued share capital of Monitise. A Circular will be sent to shareholders shortly convening a General Meeting of the Company to be held on 20 July 2009 to approve the resolutions to effect the Subscriptions.
UBS Global Asset Management ("UBS"), through a number of intermediaries, currently has an interest in ordinary shares in Monitise representing 12.9% of the issued share capital of the Company. UBS is subscribing for 9.4 million new shares as part of the Subscriptions. This will result in UBS having a total holding of 12.9% of the issued share capital of Monitise immediately following the completion of the Subscriptions. The subscription by UBS is classified as a related party transaction under the AIM rules. The Directors consider, having consulted with Investec Bank PLC, the Company's nominated adviser, that the terms of the subscription by UBS are fair and reasonable insofar as shareholders are concerned.
Tim Attinger, Head of Global Product Innovation, Visa Inc said:
"With the ever expanding growth in handsets coupled with increasing sophistication of mobile networks, mobile payments and services present significant opportunity for Visa as we continue to develop new ways to bring the benefits of Visa electronic payments to more people in more places. In aligning with Monitise, we expect to expand the delivery of Visa mobile services to consumers around the globe, enabling them to seamlessly use their mobile phones to purchase goods and services, make payments, receive valuable information and offers, and transfer money between accounts, in a safe and secure manner."
Alastair Lukies, Chief Executive Officer, Monitise commented:
"Visa is the world's most trusted, inclusive and innovative payments network. This alliance validates our unwavering commitment to building truly accessible, inclusive and reliable services over the past seven years. It is a landmark announcement in the mobile payment space and we are excited to collaborate with the world's foremost payments company to accelerate the convergence of payments services and mobile devices.
"We are also proud to welcome Tim Attinger to our Advisory Board; his deep payments and mobile expertise will make him a valued member to our key contributing body."
PRE-CLOSE TRADING UPDATE
FINANCIAL HIGHLIGHTS
We expect our revenue for the year ending 30 June 2009 to be in the region of £2.7m, an 80% increase year on year. Whilst this does represent a shortfall on the market's revenue expectations, we have been determined to achieve the strategic goals that are in the best interests of shareholders, which can impact the timing of certain deals. Management action has been taken to adjust the cost base and to focus on the commercial deal flow in the second half of FY09, ensuring that we are well established for further developments in FY10. Our operating loss is expected to be slightly better than market expectations and we remain on track for our key milestone of one million consumers by the end of calendar year 2009.
The £5.1m (before expenses) raised from the Subscriptions, together with existing Group cash balances across the Group of approximately £10m will provide Monitise with total cash of approximately £15m immediately following completion.
We are currently in negotiations for strategically important transactions in India, Asia Pacific and Middle East & Africa:
India - Progress remains good as Monitise continues to work with ICICI Bank to develop the Monitise India ecosystem. Discussions with additional launch partners are in train, and the Monitise India venture will be officially launched once the Reserve Bank of India has given Indian regulatory approval to invest.
Asia Pacific - Monitise is in the final stages of discussions with Standard Chartered Bank, a key strategic shareholder, for the deployment of Mobile Money initiatives in a number of new territories focusing on the Asia Pacific region. Standard Chartered believes that Monitise has a market leading mobile banking and payments platform and they are supporting us in bringing together the appropriate partners to deploy our technology.
Middle East & Africa - We have revised our approach to Africa and the Middle East where we now aim to create a wider franchise across the region, rather than a single joint venture commencing in Uganda. We have been approached by a number of excellent potential partners and investors for this region and will provide updates as negotiations formalise.
Our preliminary results for the year ending 30 June 2009 are expected to be announced on 25 August 2009.
CURRENT TRADING
UK
We are very pleased with the progress of our joint venture in the UK, MONILINK. We anticipate a further acceleration in the business as the joint marketing plans with our partner banks and The Carphone Warehouse begin to take an effect. It has been very encouraging to see the Lloyds recent television campaign feature mobile banking as a key component, and to see Mobile Money now appearing in the mainstream of consumer appetites.
Transaction volumes are increasing steadily and the Mobile Money Essentials (regular balance updates and alerts) and Active (personalised alerts and payments) propositions have been well received by partner banks and an increasing range of financial institutions and merchants with whom we are working to deploy new services.
We are in advanced discussions with our joint venture partner, VocaLink, as to the most appropriate growth strategy and structure to further cement MONILINK's status as a global showcase for inclusive Mobile Money services. Discussions may lead to Monitise increasing its shareholding in Monilink, although no agreement has been reached in this respect.
North America
Monitise Americas continues to gain momentum and consumer registrations are growing well.
We currently have approximately 90 financial institutions, up from 60 as reported at our interim results in February 2009, contracted to deploy the platform with a wide range of Mobile Money Essentials and Active services now available, including SMS updates, alerts and bill payments. Our improvements in structure allow Monitise Americas to carry out upgrades to the service locally, giving us real flexibility of development.
Metavante, Monitise's partner in Monitise Americas, is providing strong support in marketing Mobile Money services to its substantial financial institution franchise. We continue to discuss with Metavante extensions to the joint venture arrangement.
Duncan McIntyre, Chairman, Monitise commented:
"This is an exciting time for Monitise. The Visa alliance and Subscriptions are significant milestones for the Company. Our strategy of building secure technology and creating alliances with key market participants means that we shall continue to be a leading player in the rapidly expanding mobile banking and payments market."
ABOUT MONITISE PLC
Monitise plc (MONI.L), the mobile money specialists, has created the world's first mobile banking networks, which allow customers of multiple banks and mobile operators to perform banking and payment transactions directly from their mobile handset.
With live services in the UK and the USA, where it has delivered the MONILINK and Monitise networks in partnership with VocaLink and Metavante Corporation respectively, the Company is currently working with international partners to deliver similar safe, secure mobile banking and payment services in territories worldwide.
Current key partners include VocaLink, Metavante, HSBC, Lloyds TSB, first direct, Alliance & Leicester, Royal Bank of Scotland, NatWest, Vodafone, Orange, O2, T-Mobile and 3.
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Contacts: |
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Monitise Group |
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Alastair Lukies, CEO |
Tel: 020 7868 5200 |
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Tom Spurgeon, CFO |
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Financial Dynamics |
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Juliet Clarke |
Tel: 020 7831 3113 |
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Haya Chelhot |
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Investec |
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Patrick Robb |
Tel: 020 7597 4000 |
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Rowena Murray |
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www.monitise group.com
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