REG - Bango PLC - Interim Results
29/09/2022 07:00
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RNS Number : 0741B Bango PLC 29 September 2022
29 September 2022
BANGO PLC
("Bango")
Interim Results
Bango (AIM: BGO), the global platform for data-driven commerce, today
announces its unaudited interim results for the six months ended 30 June 2022
("1H22").
1H22 Financial highlights
· Revenue grew 9% to $10.79M (1H21: $9.90M)
· Annual Recurring Revenue (ARR)* on 30 June 2022 was $3.41M (31 December 2021:
$0.97M)
· End User Spend (EUS)** grew 16% to $2.09B (1H21: $1.80B)
· Adjusted EBITDA*** was $2.85M (1H21: $2.78M)
* Annual Recurring Revenue is the annualised value of contracted repeating
monthly revenue
** End User Spend is the total value of net transactions processed by the Bango
Platform
*** Adjusted EBITDA is operating profit before depreciation, amortization and
share based payments.
1H22 Operational highlights
Bango Payments: More Users, More Routes, More Merchants, More Insights
· Platform deal signed with T-Mobile US solidifies Bango's market leading
position as the industry standard platform for creating bundled subscription
offers
· 24 global merchants added to the Bango platform in 1H22 including:
- TelevisaUnivision - the largest Spanish language broadcaster in North America,
to support its new Vix+ global streaming service
- McAfee - adding security software to the range of subscription services
enabled through Bango
- "Global Tech Leader" - announced on 23 June 2022, a multinational technology
giant that will use the Bango Platform for app store carrier billing and
bundling its range of subscription services.
Bango Audiences: More Payment Data, More Sectors, More App Developers, More
Platforms
· Continued strong progress with gaming app developers, including the addition
of Marvel Games Developer, Kabam
· New customers including Adidas and Hard Rock demonstrate the growing appeal of
Bango Audiences outside the gaming vertical
· Awarded Meta 'badged' partner status. Bango Audiences are now actively
recommended as a targeting tool to advertisers using Facebook Ad Manager
· Added SnapChat to the suite of compatible social media platforms able to share
Bango Audiences, expanding reach beyond Facebook and TikTok.
Post-period
· On 29 August 2022, Bango acquired the global payments business of NTT DOCOMO -
DOCOMO Digital - for a gross consideration of €4M, funded using existing
Bango cash. At completion, DOCOMO Digital had a cash balance of €3.1M (the
"Acquisition")
· At the same time, Bango signed a long-term agreement with NTT DOCOMO to
provide carrier billing and wallet integration services in Japan for the
world's largest merchants
· The Acquisition significantly accelerates Bango growth by:
· Expanding Bango global partnerships with major customers; doubling the number
of Google Play and Amazon routes
· Adding new telco partners including Telefónica, América Móvil and Deutsche
Telecom and extending Bango relationships with Vodafone, Singtel, Softbank
and Airtel India
· Consolidating the Bango position as a leading payment platform for global
merchants including Netflix, BritBox and YouTube and bringing new merchants
including Tidal, Discovery, Paramount+ and Jetstar
· Expanding the Bango footprint in carrier billing for physical goods, adding
Shopify to the Bango Ecosystem
· Bringing over $3.5B of EUS that can be monetized in Bango Audiences to help
merchants find more paying users.
· The Acquisition and NTT DOCOMO Platform deal will contribute $5M of revenue in
2022 and reduce EBITDA by $4M. In 2023 and beyond revenue contribution is
expected to be $16M per year, with positive, growing Adjusted EBITDA
contribution ($10M in 2024)
· Integration following the Acquisition is progressing quickly. Actions taken in
the first four weeks have already secured $7.1M of the $21M annual cost
synergies planned by the end of FY23. Management expect timing to complete the
integration to remain in line with the timescale previously set out.
· On 28 September, Bango announced a deal with Movistar Mexico, an expansion of
a global agreement with Telefónica Group, acquired through the acquisition of
Docomo Digital. Movistar Mexico customers will be able to purchase digital
goods including apps, games and content using their telco bill, all powered by
the Bango Platform.
Paul Larbey, Chief Executive Officer at Bango, commented:
"The first 9 months of 2022 have been more exciting than ever as we continue
to execute on our growth plan. The excellent progress in both Bango Audiences
and the Platform business provide the basis for accelerating growth,
highlighted by Annual Recurring Revenue increasing 3.5x to $3.4M at the end of
June.
We added more merchants than ever in the first half of 2022 and our
partnership with the confidential 'Global Tech leader', a household name in
consumer products and services, that we announced back in June, is progressing
well.
Acquiring DOCOMO Digital in late August has accelerated our journey from tens
to hundreds of millions of dollars of revenue by over two years. It solidifies
our position as a global leader and brings additional mobile operators and
merchants into the Bango circle.
The Acquisition is an important event for the market as a whole. Merchants
clearly now have a 'go to' platform for monetizing their content and services.
Having one, market-wide monetization platform enables them to deliver better
targeted marketing and collect more payments, all through a standard
infrastructure.
The long-term agreement signed with NTT DOCOMO to provide payment services in
the world's largest carrier billing market is a major endorsement of the Bango
Platform.
With increased scale, new wins delivering revenue, and major events such as
Amazon Prime Day, Black Friday, Cyber Monday, the World Cup and Christmas, the
second half looks to be even more rewarding, and the Board remains bullish
about the future growth of Bango."
Bango will provide a results presentation to investors via the Investor Meet
Company platform on 30 September at 1.30pm UK. Sign up for the call here:
https://www.investormeetcompany.com/bango-plc/register-investor
(https://www.investormeetcompany.com/bango-plc/register-investor)
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU)
No.596/2014. Upon the publication of this announcement, this inside
information is now considered to be in the public domain. The person
responsible for making this announcement on behalf of Bango is Paul Larbey,
Chief Executive Officer.
Contact Details:
Bango PLC Liberum Capital
Tel. +1223 617 387 Tel. +44 20 3100 2000
E. investors@bango.com (mailto:investors@bango.com)
Paul Larbey, CEO Cameron Duncan
Matt Garner, CFO Kate Bannatyne
Anil Malhotra, CMO Will King
Rebecca Jamieson, IR
About Bango
The world's largest online merchants, including Amazon (NASDAQ: AMZN), Google
(NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT), use Bango technology to acquire
more paying users.
Bango has developed unique purchase behavior technology that enables millions
more users to buy the products and services they want, using innovative
methods of payment including carrier billing, digital wallets and subscription
bundling. Bango harnesses this purchase activity into valuable marketing
segments, called Bango Audiences. Merchants use these audiences to target
their marketing at paying customers based on their purchase behavior. Better
targeting increases spend through the Bango payments business, in turn
generating more data insights, creating a powerful virtuous circle that drives
continuous growth. Everyone connected to the Bango Platform thrives as the
virtuous circle grows.
Bango, the technology behind every payment choice. For more information,
visit www.bangoinvestor.com (http://www.bangoinvestor.com)
CEO statement
The Bango virtuous circle strategy and investment in R&D continues to
generate strong growth. The first half delivered revenue growth of 9% during a
period when major currencies declined against the US Dollar (e.g. Japanese Yen
down 15% and Euro down 8%) and in a year when large payment events shifted
from the first half to the second half.
Bango continues to solidify its position as a leader in the market and, in
1H22, we made great strides towards achieving our goal of becoming the
technology behind every payment choice. The most significant move forward took
place after the half year end, when Bango acquired DOCOMO Digital on 29 August
2022. This is a highly strategic acquisition that adds huge scale to Bango,
accelerating our target revenue growth by over 2 years, and is expected to
drive a substantial increase in profitability and cash generation in 2024 and
beyond.
Payments
Bango connects the world's largest merchants to consumers who purchase goods
using alternative payment methods including carrier billing (charged to a
phone bill), mobile wallets and bundled subscription packages.
End User Spend (EUS) grew by 16% in 1H22, as merchants continue to look for
new ways they can acquire and retain customers in an environment where
consumer spend is under pressure. By using Bango Products, merchants can
attract new, paying customers they wouldn't otherwise reach and by bundling
these merchant products with their own first-party services, telcos can use
the consumer appeal of this content to attract and retain more customers.
Subscription bundling continues to be the fastest growing part of the Payments
business, with an increasing number of telcos standardizing on the Bango
Platform for all their third-party bundling. The power and ubiquity of the
Bango "Digital Vending Machine" gives us a leading position in this high
growth market.
Verizon announced +Play in March 2022, which offers their customers the
opportunity to buy a wide range of services, charged to their Verizon bill.
Powered by Bango, these services, from category leaders including Disney+,
Hulu, ESPN+, discovery+, Netflix, Peloton, HBO Max, WW (Weight Watchers), Calm
and Duolingo, address a wide range of consumer interests.
The addition of T-Mobile US as a new platform customer means the majority of
telco bundles in the US are powered by the Bango platform - an addressable
market of 250 million consumers. These deals - along with the previous wins
with BT, Entel Chile and others - resulted in an Annual Recurring Revenue
(ARR) of $3.41M at 30 June 2022, 3.5x the amount at 31 December 2021.
Data monetization
Bango Audiences continue to gain traction in the market as online advertisers
realize the advantages of targeting based on purchase behavior. There has been
significant upheaval in the online advertising market with the removal of
widely used data sources, such as Apple IDFA data. This, coupled with Facebook
pricing changes, make purchase behavior targeting even more valuable and have
also resulted in a surge in customers using Bango Audiences on TikTok, and
more recently SnapChat.
In 1H22, Bango became an official Meta Badged Partner. This means Bango
Audiences are an approved tool within Facebook ad manager for advertisers
wanting to improve their return on ad spend and find more paying customers.
The increasing reach of Bango Audiences outside of the gaming app developer
space is exciting and shows an expanding target market for this business.
Customers, who initially began using Bango Audiences to attract paying users
to their apps, are seeing success with using Audiences to advertise their
other products and services, including physical goods. Bango Audiences won new
customers, including household names like Adidas, Hard Rock and Marvel games
publisher, Kabam. It also won new admirers - Bango Audiences was awarded the
Advertising Technology of the Year prize in this year's "Sammys" (the
prestigious Sales and Marketing Awards).
People
In May 2022 Bango conducted its annual employee engagement survey. Measured
against the Bango THRIVE values (Transparent, Happy, Reliable, Innovative,
Victorious, Expressive), we achieved our highest ever score (83%), building on
an already record high score achieved in 2021. Maintaining such high levels of
engagement during periods of fast growth is never easy but is testament to the
commitment of the entire team to the Bango strategy. The level of engagement
means that Bango can focus on hiring to grow the team rather than replacing
leavers - an advantage few tech companies can demonstrate.
As part of this growth, Bango established a new R&D center in Portugal,
providing access a broader pool of talent to accelerate growth.
Acquisition
The most significant development was announced after the half year end, with
Bango acquiring the global payments business of NTT DOCOMO on 29 August 2022.
Acquiring DOCOMO Digital brings significant strategic advantage to Bango. It
brings scale from the additional $3.5B of EUS and is forecast to deliver $5M
revenue in FY22 and $16M in FY23. It is expected to make a positive Adjusted
EBITDA contribution in FY23, growing to an expected contribution of $10M in
Adjusted EBITDA in FY24, in addition to the organic Bango EBITDA.
The integration is progressing well. Bango has replaced the DOCOMO Digital
brand and customer feedback has been universally positive. When the
Acquisition was announced, Bango forecast $21M of annualized synergy savings
by the end of FY23. After only 4 weeks, actions have been taken that will
realize $7.1M, equating to over one third of these synergies and we remain
confident about executing on the remaining synergies in the coming months.
Management expect timing to complete the integration to remain in line with
the timescale previously set out.
The Acquisition brings complementary customer relationships and solidifies our
strong position with leading merchants like Amazon and Google and telcos like
Vodafone, Softbank and Airtel India, as well as adding new names such as
Deutsche Telecom, Hutchison, Telefonica, Tidal, Paramount+, Discovery+ and
Sony.
At the same time, Bango signed a long-term agreement with Japan's largest
operator, NTT DOCOMO, to become the preferred integrator for all their DCB and
wallet business. Bango has worked with NTT DOCOMO as the integration partner
for physical goods on Amazon.co.jp for many years but extending this
partnership to all their merchant integrations under a multi-year agreement
validates the unique capabilities of Bango technology and is testament to the
power of the Bango Platform.
The deal accelerates each part of the virtuous circle and brings revenue
growth forward by more than two years. It adds more merchant products and
services for telco partners to offer their customers, it brings more telcos
giving merchant partners the opportunity to access more customers globally and
increases the volume of transactions flowing through the Bango Platform,
providing more data to be monetized via Bango Audiences.
Outlook
With more users, more routes, more customers and more data than ever before
the power of the Bango Platform is substantially increased and Bango is well
positioned to continue taking market share. The pipeline for the second half
of 2022 and beyond is strong.
The unique Bango proposition as a data-driven commerce solution offers
partners and customers more than simply a payment connection. The Bango
Platform enables them to grow their paying customer base, revenue and
profitability. The value of this competitive differentiator increases as Bango
scales, validated by leading businesses like Verizon and T-Mobile
standardizing on the Bango Platform for all their third-party bundling needs.
The acquisition of DOCOMO Digital strengthens our leadership further. Bango
achieves tremendous synergies through the integration of the DOCOMO payments
business, which will deliver significantly more revenue and profit in 2023 and
beyond. There is work to do to integrate the businesses, but supported by the
strong Bango culture, I am pleased with the rapid progress already made in the
weeks following the acquisition and am excited by the potential for further
rapid growth that the increased scale brings.
Paul Larbey
Chief Executive Officer
CFO statement
Bango revenue continued to grow during the year recording an increase of 9%
against 1H21. This supports the planned increased investment in technology and
sales & marketing that will drive future revenue gains while still
delivering positive Adjusted EBITDA of $2.85M (1H21: $2.78M).
Bango business model
Bango continues to report on one line of business, being payment transactions
processed by the Bango Platform for both physical and digital goods and data
activity from the monetization of payment data. For the first time, Bango is
reporting the level of contracted Annual Recurring Revenue (ARR) generated
from Platform Agreements.
End User Spend (EUS)
EUS continues to be calculated from the total value of transactions processed
by the Bango Platform (excluding taxes). Although not directly linked to
revenue, it is a Key Performance Indicator for the business and gives an
indication of the growth of Bango customers and partners as well as showing
the extent of data available for monetization through unique Bango Purchase
Behavior Targeting technology.
EUS for 1H22 was up 16% to $2.09B (1H21: $1.80B).
Revenue
Total revenue increased 9.0% to $10.79M (1H21: $9.90M). This includes
non-transactional payments (licensing of software, platform & technology)
and integration totaling $4.0M (1H21: $2.35M), which are additional ways to
monetize the Bango Platform.
This revenue increase has been achieved against the backdrop of a significant
strengthening of the US Dollar against other major currencies and despite the
shift of Amazon Prime day from 1H in 2021 to 2H in 2022.
For the first time, Bango is reporting an annual recurring revenue. As at 30
June 2022, ARR was $3.41M ($0.97M at 31 December 2021) from Platform deals
with Verizon, T-Mobile, BT, Entel Chile and others.
Bango earns further payment revenue from transactions processed through the
Bango Platform, license fees from Platform Agreements, data monetization
revenue from the insights provided through this activity and through other
methods, such as integration fees, which are recognized on completion of
contracted milestones and in line with International Financial Reporting
Standard 15; Revenue from Contracts with Customers.
Gross margin remains high at 92.8% of revenue in 1H22 (1H21: 96.2%).
Operating expenditure of continuing operations
Bango group adjusted operating costs of $7.16M for the first half of 2022
(1H21: $6.74M) were in-line with forecasts and reflect the continuing
investment by Bango in developing the Platform and enhancing the capability of
Bango Products to expand the customer base and drive growth.
Bango group Adjusted EBITDA was $2.85M, (1H21: $2.78M) driven by significant,
high margin revenue growth which allowed for continued investment.
The share-based payment charge for 1H22 was $0.82M (1H21: $0.47M) calculated
using the Black-Scholes-Merton model. The share-based payments relate to the
Bango share option program that enables all Bango employees to share in the
growth in value of Bango. It is a vital recruitment and retention tool in a
highly competitive employment market.
Amortization of intangible assets in 1H22 was $2.35M (1H21: $1.85M) as R&D
projects previously capitalized were deployed. Depreciation for 1H22 was
$0.10M (1H21: $0.12M).
Loss and loss per share
The loss after tax was $0.50M (1H21: $0.52M) and included a $0.80M (1H21:
$0.96M) share of the net loss of associates (NewDeep JV) accounted for using
the equity method. Excluding the associate loss, the underlying business
showed a profit of $0.30M (1H21: $0.44M). The total comprehensive income for
the period includes adjustments for foreign exchange on consolidation
reflecting the major change in the strength of the US dollar against Sterling.
Basic loss per share was a loss of 0.65c (1H21: 0.69c). Adjusted basic
earnings per share, which excludes the share of net loss of associates, was a
profit of 0.40c (1H21: profit of 0.59c).
Cash
Cash and short-term cash investments as at 30 June 2022 stood at $5.70M (31
December 2021: $9.65M) reflecting the strong investment Bango is making in its
platform and technology to drive the next level of growth and increased
receivables from revenue timing. With the reduction in these receivables and
some customers now choosing to prepay on their contracts, Bango expects to
maintain a strong cash position.
Going concern
A combination of strong operating cash flows, positive net cash of $5.70M and
revenue growth generated by the business supports the Directors view that the
group has sufficient funds available to meet its foreseeable working capital
requirements. These requirements support planned investments to grow
marketing and sales, and to develop new products to ensure Bango benefits from
the continued growth of EUS through the Bango Platform that the Board expects
over the coming years.
Bango acquired the global payments business of NTT DOCOMO on 29 August 2022
and expects to fund the integration of the Acquisition, including the
migration of customers to the Bango Platform, from cash generated from
operating activities and existing cash. In addition, a recent contract
provides Bango with significant working capital over the next 12-18 months,
before normalizing over the life of the contract. Bango strategic partner and
shareholder, NHN Corporation, has also stated its intention to offer Bango a
$10M three-year term loan on commercial terms. The Acquisition is expected to
be earnings accretive in the first full year (FY2023) and materially earnings
accretive once the integration has been fully completed.
The directors have taken into account the expected impact of the Acquisition
and the wider macro-economic effects, including foreign exchange and interest
rate fluctuations, and have concluded that the going concern basis remains
appropriate.
Matthew Garner
Chief Financial Officer
Consolidated statement of comprehensive income
for the six months ended 30 June 2022
Notes Six months ended Six months ended
30 June 2022 30 June 2021
Unaudited Unaudited
$ '000 $ '000
Revenue 3 10,789 9,903
Cost of sales (781) (380)
Gross profit 10,008 9,523
Administrative expenses (10,431) (9,174)
Adjusted EBITDA 2,851 2,784
Share based payments (819) (469)
Depreciation (103) (117)
Amortization (2,352) (1,849)
Operating (loss) / profit (423) 349
Interest payable (1) (5)
Interest income 12 3
Share of net loss of associates accounted for using the equity method 6 (799) (964)
Loss before taxation from continuing operations (1,211) (617)
Income tax 714 97
Loss for the period (attributable to equity holders of the company) (497) (520)
Other comprehensive income (3,773) 303
Foreign exchange on consolidation
Total comprehensive income for the
period attributable to equity holders of Bango PLC (4,270) (217)
Basic and diluted loss per share 4 (0.65)c (0.69)c
Notes 1 to 8 are an integral part of the consolidated interim financial
statements.
* Adjusted earnings per share excludes the share of net loss of associates
Consolidated statement of financial position as at 30 June 2022
31 December 2021
Audited
30 June 2022
Unaudited
Notes $ '000 $ '000
ASSETS
Non-current assets
Property, plant and equipment 514 242
Right of use assets 49 83
Intangible assets 19,115 18,645
Investments accounted for using the equity method 6 4,372 5,630
24,050 24,600
Current assets
Trade and other receivables 9,319 7,099
Research and development tax credits 1,412 778
Short-term investments - 945
Cash and cash equivalents 5,705 8,706
16,436 17,528
Total assets 40,486 42,128
EQUITY
Capital and reserves attributable to equity holders of Bango PLC
Share capital 5 24,426 24,392
Share premium account 62,195 62,057
Merger reserve 2,886 2,886
Share based payment reserve 3,891 3,635
Foreign exchange reserve (1,269) 2,109
Accumulated losses (58,594) (58,265)
Total equity 33,535 36,814
LIABILITIES
Current liabilities
Trade and other payables 6,883 5,209
Lease liabilities 68 56
6,951 5,265
Non-current liabilities
Lease liabilities - 49
- 49
Total liabilities 6,951 5,314
Total equity and liabilities 40,486 42,128
Notes 1 to 8 are an integral part of the consolidated interim financial
statements.
Consolidated cash flow statement for the six months ended 30 June 2022
Six months ended Six months
30 June 2022 ended
Unaudited 30 June 2021
Unaudited
$ '000 $ '000
Cash flow from operating activities
(Loss) / profit for the period (497) (520)
Adjusted for:
Depreciation for property, plant & equipment 103 117
Amortization of intangibles 2,352 1,849
Net finance costs (11) 2
Share-based payments 819 469
Share of loss of associate 799 964
Taxation credit (714) -
Increase in receivables (2,570) (1,594)
Increase in payables 1,162 450
Cash generated from operating activities 1,443 1,737
Corporation tax received 62 -
Net cash generated from operating activities 1,505 1,737
Cash outflow from investing activities
Purchases of property, plant and equipment (368) (92)
Addition to intangible fixed assets (4,601) (1,842)
Short-term investments 945 -
Interest received 11 3
Net cash outflow from investing activities (4,013) (1,931)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 172 1,919
Interest payable - (3)
Interest payments on finance lease obligations - (2)
Capital repayments on finance lease obligations (37) (45)
Net cash generated from financing activities 135 1,869
Net (decrease) / increase in cash and cash equivalents (2,373) 1,675
Cash and cash equivalents at beginning of period 8,706 7,958
Exchange differences on cash and cash equivalents (628) 218
8,078 8,176
Cash and cash equivalents at end of period 5,705 9,851
Notes 1 to 8 are an integral part of the consolidated interim financial
statements.
Consolidated statement of changes in equity for the six months ended 30 June
2022
Share capital Share premium account Merger reserve Share-based payment reserve Foreign exchange reserve Retained earnings Total
$ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000
Balance at 1 January 2022 24,392 62,057 2,886 3,635 2,109 (58,265) 36,814
Share based payments - - - 819 - - 819
Transfer for exercised options - - - (168) - 168 -
Exercise of share options 34 138 - - - - 172
Transactions with owners 34 138 - 651 - 168 991
Profit for the period - - - - - (497) (497)
Foreign exchange on translation - - - (395) 395 - -
Foreign exchange on consolidation - - - - (3,773) - (3,773)
Total comprehensive income for the period - - - (395) (3,378) (497) (4,270)
Balance at 30 June 2022 24,426 62,195 2,886 3,891 (1,269) (58,594) 33,535
Balance at 1 January 2021 24,033 60,173 2,886 3,306 2,323 (59,804) 32,917
Share based payments - - - 469 - - 469
Transfer for exercised options - - - (756) - 756 -
Exercise of share options and warrants 303 1,616 - - - - 1,919
Transactions with owners 303 1,616 - (287) - 756 2,388
Loss for the period - - - - - (520) (520)
Foreign exchange on translation - - - 28 (28) - -
Foreign exchange on consolidation - - - - 303 - 303
Total comprehensive income for the period - - - 28 275 (520) (217)
Balance at 30 June 2021 24,336 61,789 2,886 3,047 2,598 (59,568) 35,088
Notes 1 to 8 are an integral part of the consolidated interim financial
statements.
1. General information
Bango PLC ("the Company") was incorporated on 8 March 2005 in the United
Kingdom. Bango PLC is domiciled in the United Kingdom. Bango PLC's shares are
listed on the Alternative Investment Market of the London Stock Exchange
("AIM"). The Bango registered office is at Botanic House, 100 Hills Road,
Cambridge, CB2 1YG, United Kingdom. The Bango principal place of business is
326 Science Park, Milton Road, Cambridge, CB4 0PZ, United Kingdom.
2. Basis of preparation
These interim financial statements are for the six months ended 30 June 2022.
They do not include all the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2021, which have been
filed at Companies House with an unmodified audit report.
These interim financial statements have been prepared in accordance with
UK-adopted International Accounting Standards ("IFRS"). These financial
statements have been prepared under the historical cost convention.
These interim financial statements have been prepared in accordance with the
accounting policies adopted in the last annual financial statements for the
year to 31 December 2021. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation of these
interim financial statements and are expected to be followed throughout the
year ending 31 December 2022.
These financial statements are presented in US Dollars (USD), the presentation
currency of Bango PLC Group. The Group's functional currency is GBP
Sterling.
Going concern
A combination of strong operating cash flows, positive net cash of $5.70M and
revenue growth generated by the business supports the Directors view that the
group has sufficient funds available to meet its foreseeable working capital
requirements. These requirements support planned investments to grow
marketing and sales, and to develop new products to ensure Bango benefits from
the continued growth of EUS through the Bango Platform that the Board expects
over the coming years.
Bango acquired the global payments business of NTT DOCOMO on 29 August 2022
and expects to fund the integration of the Acquisition, including the
migration of customers to the Bango Platform, from cash generated from
operating activities and existing cash. In addition, a recent contract
provides Bango with significant working capital over the next 12-18 months,
before normalizing over the life of the contract. Bango strategic partner and
shareholder, NHN Corporation, has also stated its intention to offer Bango a
$10M three-year term loan on commercial terms. The Acquisition is expected to
be earnings accretive in the first full year (FY2023) and materially earnings
accretive once the integration has been fully completed.
The directors have taken into account the expected
impact of the Acquisition and the wider macro-economic effects, including
foreign exchange and interest rate fluctuations, and have concluded that the
going concern basis remains appropriate.
3. Revenue
Bango, based on the information reviewed by the chief operating decision
maker, reports on one segment of revenue.
Revenue by product:
2022 2021
$ '000 $ '000
Payments - transactional & data monetization 6,793 7,557
Payments non-transactional (licensing of software, platform & technology), 3,996 2,346
and integration
10,789 9,903
Most income is currently recognized at a point in time rather than over time.
4. Earnings / (loss) per share
Basic earnings / (loss) per share are calculated by dividing the profit /
(loss) attributable to equity holders of Bango PLC by the weighted average
number of ordinary shares in issue during the period.
Six months ended Six months ended
30 June 2022 30 June 2021
Unaudited Unaudited
$ '000 $ '000
Loss from operations (497) (520)
Loss attributable to equity holders of Bango PLC (497) (520)
Weighted average number of ordinary shares in issue 76,074,109 75,342,006
Basic loss per share
Basic loss per share attributable to equity holders (0.65)c (0.69)c
Diluted loss per share
At 30 June 2022 6,554,141 options over ordinary shares of (30 June 2021:
5,118,727) were outstanding.
Six months ended Six months ended
30 June 2022 30 June 2021
Unaudited Unaudited
Weighted average number of ordinary shares in issue 76,074,109 75,342,006
Options - -
Weighted average number of ordinary shares in issue (including options) 76,074,109 75,342,006
Diluted loss per share
Diluted loss per share attributable to equity holders (0.65)c (0.69)c
The weighted average number of shares and the loss for the period for the
purposes of calculating diluted loss per share are the same as for the basic
loss per share calculation. This is because the outstanding share options
would have the effect of reducing the loss per share and would not, therefore,
be dilutive under the terms of IAS 33.
Adjusted earnings per share
Adjusted basic earnings per share is determined as the loss attributable to
equity holders of Bango PLC excluding the Bango share of the net loss of
associate for the period divided by the weighted average number of ordinary
shares in issue during the year.
Six months ended Six months ended
30 June 2022 30 June 2021
Unaudited Unaudited
$ '000 $ '000
Loss from operations (497) (520)
Share of net loss of associates 799 964
Adjusted profit attributable to equity holders of Bango PLC 302 444
Basic earnings per share - Adjusted
Basic earnings per share attributable to equity holders 0.40c 0.59c
Weighted average number of ordinary shares in issue 76,074,109 75,342,006
Options 1,064,927 2,410,009
Weighted average number of ordinary shares in issue (including options) 77,139,036 77,752,015
Diluted earnings per share - Adjusted
Diluted earnings per share attributable to equity holders 0.39c 0.57c
5. Share capital
Allotted, called up and fully paid:
Ordinary shares of 20p each in Bango PLC
No $ '000
As at 31 December 2020 74,711,268 24,033
Exercise of share options 1,302,391 359
and warrants
As at 31 December 2021 76,013,659 24,392
Exercise of share options 126,421 34
As at 30 June 2022 76,140,080 24,426
6. Interest in associates
The interest in associate relates to the group's 40% interest in the NewDeep
Limited group.
$ '000
Opening balance as at 1 January 2021 7,771
Share of operating losses (2,081)
Foreign exchange movements (60)
Closing balance as at 31 December 2021 5,630
Share of operating losses (799)
Foreign exchange movements (459)
Closing balance as at 30 June 2022 4,372
7. Subsequent events
Bango acquired the global payments business of NTT Docomo on 29 August 2022.
The Docomo Digital Limited Group was purchased for a cash consideration of
€4M with a retained cash balance of €3.1M. In addition to the acquisition,
Bango signed a long-term platform deal with NTT Docomo to provide payment
services.
8. Publication of non-statutory accounts
The condensed consolidated interim financial information was approved by The
Board of Directors on 28 September 2022. They are unaudited but have been
reviewed by the auditors and their report is included within this note.
The financial information set out in this interim report does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006. The
figures for the period ended 31 December 2021 have been extracted from the
Statutory Financial Statements of Bango PLC, which have been filed with the
Registrar of Companies. The auditor's report on those financial statements is
unqualified and did not contain any reference to any matters to which the
auditors drew attention to by way of emphasis without qualifying their report
a statement under section 498(2) or 498(3) of the Companies Act 2006. The
interim financial information for the six months to 30 June 2022 is unaudited.
The interim report together with an analyst briefing presentation will be
distributed to all shareholders and will be available on the Bango investor
site at www.bangoinvestor.com (www.bangoinvestor.com) .
Independent review report to Bango PLC
Conclusion
We have been engaged by Bango PLC ('the Company') to review the condensed set
of financial statements of the Company and its subsidiaries (the 'Group') in
the interim financial report for the six months ended 30 June 2022 which
comprises the consolidated statement of comprehensive income, consolidated
statement of financial position, consolidated cash flow statement,
consolidated statement of changes in equity and the related explanatory notes
that have been reviewed. We have read the other information contained in the
interim financial report and considered whether it contains any apparent
material misstatements of fact or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial report for the six months ended 30 June 2022 is not prepared, in all
material respects, in accordance with the presentation, recognition and
measurement criteria of UK-adopted International Accounting Standards and the
AIM Rules for Companies.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ('ISRE (UK) 2410') issued for use in
the United Kingdom. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with UK-adopted International Accounting Standards.
The condensed set of financial statements included in this interim financial
report has been prepared in accordance with the presentation, recognition and
measurement criteria of UK-adopted International Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Group to
cease to continue as a going concern.
Responsibilities of Directors
The interim financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the interim
financial report in accordance with the presentation, recognition and
measurement criteria of UK-adopted International Accounting Standards and the
AIM Rules for Companies.
In preparing the interim financial report, the directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Review of the Financial Information
In reviewing the interim financial report, we are responsible for expressing
to the Company a conclusion on the condensed set of financial statements in
the interim financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK) 2410 "'Review of Interim Financial
Information performed by the Independent Auditor of the Entity". Our review
work has been undertaken so that we might state to the Company those matters
we are required to state to them in an independent review report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
Second Floor
North Wing East
126-130 Hills Road
Cambridge
CB2 1RE
28 September 2022
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