Monitise (LSE: MONI), the mobile payments firm, targets another year of significant sales growth.
Doubling your revenue in one year is impressive, but three years on the trot is outstanding. That's what Monitise (LSE: MONI), the mobile payment outfit, has just done. What's more, it's aiming for another sales double this year.
The actual increase in sales last year was 136%, with revenues rising from £15.3m to £36.1m. Gross margins increased, too, from 62% to 66%. Monitise is feeling confident enough to predict that sales for the current year will be a minimum of £70m, and that gross margins should exceed 70% by the end of the period.
Monitise also had news of a new contract win, with the Hong King division of the Bank of China. Other recent contract gains, closer to home, have included HSBC (LSE: HSBA) and the Co-operative Bank.
However, looking at the bottom line, Monitise's performance has been less impressive in recent years. There are heavy upfront costs for setting up new contracts, and this has meant continued losses, despite the rapid increase in sales. The loss before tax was £16.9m, down marginally from the previous year's £17.2m.
There are signs that profitability is not that far off, however. Profits from Monitise's live operations, with the likes of Royal Bank of Scotland (LSE: RBS) and Visa (NYSE: V.US), were £10.6m. Monitise is predicting it will be profitable at the EBITDA level by September 2013, one quarter earlier than its previous estimate, while analysts are expecting Montise to break even in the year to June 2014.
On the cash front, Monitise looks relatively secure for now. It had net cash of £10m as at 30 June, and raised a further £22m from shareholders in August.
Alastair Lukies, Group CEO, Monitise plc, said:
"Our strategy centres on being the enabling technology platform of choice for financial institutions and payments companies worldwide, helping them to defend and extend their position as money becomes increasingly digitised. It is critical that our platform is bank grade and we invest to ensure it meets the highest standards. We have a fantastic team of people who uniquely blend experience in banking, payments and innovation. It is important that we continue to attract and retain the best talent."
Monitise shares rose 1% to 33p on the release on the results, valuing the company at £377m. It's been a roller-coaster ride for shareholders in the past five years. The shares joined AIM at 22p back in 2007, but dipped as low as 3p during 2009, before making a strong recovery.
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> Stuart does not own any of the shares listed above.