Interactive Investor

Monitise ejects Visa man

30th March 2015 13:08

Harriet Mann from interactive investor

To avoid any possible conflict of interest, Visa Europe's representative on the Monitise board has stepped down. It follows the mobile payment firm's recent strategic review during which Tom Houghton had to sit out board discussions, not ideal.

Houghton, who has "spent a lifetime working in the payments industry," was appointed to the board in April 2014 and came with a "wealth of relevant experience in international payments". And Monitise has been quick to reassure investors that the pair's relationship is not on the rocks, with a three-year contract signed in 2013 unaffected by his departure.

"We both believe our commercial interests are now better served without a board position," said Visa Europe's CEO Nicolas Huss and Monitise chairman Peter Ayliffe.

The review finished last week and, after potential buyers failed to excite Monitise's management, the firm has decided to go it alone as bosses worried a long, drawn-out process would interfere with the day-to-day running of the business. Founder and co-CEO Alastair Lukies announced he was stepping down to become a strategic advisor to the business, making way for Elizabeth Buse as the lone CEO.

Analysts from Barclays said: "According to the company, analyst consensus of those who have updated since the 1H15 results is for 140 million users (Barclays: 118.5 million) at the end of FY18. We forecast an EBITDA loss of £4.6 million in FY16. We therefore see our forecasts as already appropriately set given today's update. Our 25p price target is based on 3x CY16 EV/Sales"

Visa Inc - a separately incorporated business to Visa Europe - caused a huge stir last year when it announced it would sell its 5.5% stake in Monitise. The share price crashed by almost a third in response.

Monitise shares were worth 13.6p early Monday, up 3%, but 80% lower than this time last year. The firm is now under pressure to generate a promised cash profit in the year to June 2016. Sales of £90-£100 million this year are tipped to generate a £40-50 million EBITDA loss.

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