Relief as Monitise springs no surprises

A transformational year is how Monitise management described 2014. They are, of course, referring to the mobile payment expert's switch to longer-term subscription-based business, but this has not been without some short-term pain - a string of revenue warnings torpedoed the share price. However, these full-year results were well-flagged, and another potentially lucrative new contract with Santander does at least keep Monitise on track to hit the all-important target of 200 million registered users by 2018.

It has 30 million already – over 3 million with RBS alone – so there's plenty to do. But the mobile banking tie-up with Santander, which has 14 million UK accounts and 103 million worldwide, should be good business in time. Monitise will, however, need many more like this.

Revenue for the year ended 30 June grew by 31% to £95.1 million, in line with the £95-£97 million predicted in July, although ongoing contract negotiations meant subscription revenue was a touch lower half-on-half. An underlying operating loss of £31.4 million is slightly less than the previous estimate of £32-36 million. The only big difference was capital expenditure, now tipped to be £35-45 million, up from £30-40 million.

And that's a huge relief, coming as it does after a run of revenue warnings. It's also reassuring that forecasts for the current financial year remain unchanged - look for top-line growth of at least 25%, says Monitise. It still expects to make a cash profit in 2016, too.

Canaccord Genuity continues to forecast average sales growth of 59% for the next three years and a profit of £7 million in 2016, rising to almost £92 million the year after.

Recent deals with IBM and partnerships with the likes of Santander are encouraging. Numbers are largely as expected, too. Monitise does, however, remain capable of surprises, both good and bad, and achieving aggressive forecasts will not be easy. That said, the potential here remains exciting, and the appointment of former Visa executive Elizabeth Buse to run the business alongside founder Alastair Lukies is looking like a smart move.

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