8th Feb 2007 07:00
Morse PLC08 February 2007 Embargoed for 7.00am, 8 February 2007 Banks continue to join MONILINK(TM) network as the opportunity in mobile banking grows Morse plc ("Morse" or the "Group"), the consulting, technology and supportcompany, announces that The Royal Bank of Scotland Group ("RBSG") has signed anagreement to offer its UK retail banking customers the next generation of mobilephone banking through the MONILINK(TM) network, the secure mobile bankingnetwork developed through the joint venture with LINK Interchange Network("LINK"), (operator of LINK, the world's busiest shared ATM network). The agreement with RBSG will mean that the MONILINK(TM) service will beavailable to the customers of all of RBSG's UK retail banking brands. UK banks already offering the MONILINK(TM) service to their customers are HSBCand first direct. Other recent additions to the network include Alliance &Leicester who have recently begun to market the service to their customers. Thelaunch of the service with RBSG will bring the number of consumers able toaccess the MONILINK(TM) service in the UK to over 30 million, some 35% of LINK'scard base of 85 million. In addition, discussions are in progress with theother major participants in the UK banking sector and further announcements canbe expected. Also announced today is an update on developments within Monitise Group, thehighlights of which are as follows: Highlights • New agreement with RBSG makes MONILINK(TM) available to customers of all its UK retail banking brands • Agreement also recently signed with Alliance & Leicester • Over 30 million UK consumers now have access to MONILINK(TM) • MONILINK(TM) is now developing more aggressive marketing plans with its banking and mobile network partners to accelerate consumer adoption in the UK • T-Systems has acquired the rights to Monitise Limited's exclusive preferred partner agreement in Germany for an initial fee of €130,000 (approximately 10% of the annual license fee) • Confirmation by independent advisers that the value of Monitise Group is significantly in excess of the capital committed to date to build the business • Investment in Monitise Group in the six months ended 31 December 2006 of £2.9 million • Operating expenditure in Monitise Group now running at approximately £5 million in total for the six months to 30 June 2007 which will be partially offset by revenue generated The Board of Morse plc confirms that core Morse, the Group's Advisory &Execution professional services firm, continues to trade in line withexpectations. Duncan McIntyre, chief executive, Morse plc, commented: "We are very pleased with Monitise Group's progress. MONILINK(TM) in the UK isnow well placed to become the industry platform in mobile banking and thisplatform is enabling us to also gain a market leading position in overseasterritories. The recent confirmation by independent advisers of the value being createdtogether with the opportunity to replicate our UK success in overseas marketshas given management the confidence to take the business to its next stage ofdevelopment. This will require additional investment - an investment which webelieve will allow Monitise(R) to emerge as a key player in the rapidlydeveloping mobile banking market. Morse has two separate businesses which have distinct characteristics. We areaware of the challenges this produces for a small quoted company and remainfocused on ensuring both businesses operate in an environment which maximisestheir individual chances of fulfilling their potential." Contacts: Duncan McIntyre, Chief Executive OfficerEric Dodd, Finance DirectorMorse plc Tel: 020 8380 8000 Harriet KeenHaya ChelhotFinancial Dynamics Tel: 020 7831 3113 Additional information on progress at Monitise Group Mobile banking market The appetite for secure mobile access to lifestyle services is growing rapidlyas technology develops and consumers lead increasingly busy lives. With themarket for financial services consumed over a mobile device being estimated tobe worth $6.8 billion in 2005, growing to $40 billion in 2010, financialorganisations are increasingly keen to utilise the current bankinginfrastructure over the mobile device. As consumers adopt basic banking services through this channel, a new andsubstantial market opportunity for mobile commerce and payments has emerged.Mobile operators, handset and SIM manufacturers and a variety of retail, bankingand media brands, can all benefit from their customers having an 'always on'personal device with them at all times. The secure, bank grade platformdeveloped by Monitise Group is already bringing together the key partiesrequired to provide a compelling and sustainable consumer service. Update on valuation and investment in Monitise Group Morse plc has been discussing the valuation of Monitise Group with independentadvisers. Based on those discussions the Board is confident that the currentvalue of Monitise Group is significantly in excess of the capital committed todate to build the business. Having established itself in a key market, this business has a very uniqueopportunity to become a leading player within the fast growing markets formobile banking, commerce and payments. In the six months ended 31 December 2006, Morse plc has invested £2.9 million inthe Monitise Group. Given the developments both in the UK and overseas, it isvital that the business continues aggressively to deliver on its strategy ofbeing the platform of choice within its market globally and to achieve thisMonitise Group needs to continue to develop its product roadmap and attract andretain key talent. The Board therefore anticipates an increasing level ofinvestment amounting to approximately £5m in total during the second half of thefinancial year, partially offset by expected revenues from a number of overseassales opportunities together with revenues beginning to build from the UKoperation and Monitise Business Solutions Limited. This investment will befunded from Morse plc's existing cash reserves. Monitise Group operations The MONILINK(TM) joint venture business is part of Monitise Group, one of twostand alone operating businesses within Morse plc. There are three parts to the Monitise Group business, as follows: • MONILINK(TM), owned 50% by Monitise Group Limited and 50% by LINK, to address the UK market • Monitise Limited, owned 85% by Monitise Group Limited and 15% by LINK, to address overseas opportunities • Monitise Business Solutions Limited, owned 100% by Monitise Group Limited to further utilise the Monitise Group's unique intellectual property Monitise Group continues to make good progress in all three of these operations: MONILINK(TM) The UK platform, MONILINK(TM), continues to attract considerable interest and isnow very well placed to become the industry platform in mobile banking. The MONILINK(TM) service, which is a banking grade platform that leveragesexisting payment infrastructure, is being rolled out in stages with initialservices including balance enquiries, mini-statements and mobile top-upsaccessed securely from consumers' mobile telephones. During the early stages of this roll-out, the feedback from consumers has beenextremely positive. MONILINK(TM) is now ready, in conjunction with its bankingand mobile network partners, to develop some more aggressive marketing plans toaccelerate consumer adoption. Although this marketing push is being initiatedlater than originally anticipated, feedback to date reinforces MONILINK(TM) andits partners' view that up-take should be strong. The additional revenue streamsthis affords the banks, cost savings and a new digital channel for bankingcustomers combine to make it an extremely attractive opportunity for allinvolved. The industry user forum established by MONILINK(TM) in 2005 to help ensure thatthe service would appeal to the broadest possible consumer base, continues toenjoy senior level commitment and representation from Alliance & Leicester,Barclays, Derbyshire Building Society, ICICI , first direct, Lloyds TSB, HSBCand Royal Bank of Scotland. Monitise Limited Monitise Limited was formed in 2005 to address the fast growing market formobile banking globally. Originally Monitise Limited relied on an indirect sales model which involves anoverseas partner paying an initial upfront fee for the mobile banking platformrights, minimum annual fees and a percentage of the revenues for any oneterritory. While this model remains appropriate and viable for certain markets,management believes that it is important to develop a direct model whereMonitise Limited will participate more actively in the development anddeployment of its platform. Under the indirect model, T-Systems has acquired the rights to MonitiseLimited's exclusive preferred partner agreement in Germany for an initial fee of€130,000, equating to approximately 10% of the annual license fee. Negotiationsto agree the final terms are ongoing. Due to the size and scale of these overseas opportunities in mobile banking andthe unique attributes of the Monitise(R) platform, the business continues toattract strong interest from other leading organisations such as BT GlobalServices and Cisco. As with MONILINK(TM) in the UK, the credibility andexecution expertise of the platform operator is key to its success. Negotiations with these and other overseas partners in a number of territoriesare also ongoing and progressing well. Whilst identifying and developing some of these indirect opportunities, Monitise(R) has also recognised the importance of its own involvement andmanagement expertise in some key strategic territories. The first of these'direct' opportunities has, we believe, arisen in North America. Management are also working closely with a number of partners in developingnations such as India and China. Here the opportunity to 'leapfrog' more staticbanking infrastructure with secure mobile technology and provide much neededfinancial services to poorer and more rural populations is significant. Monitise(R) has been recognised by the World Economic Forum as a company extremely well placed to serve this market place. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
RBS.L