Monitise reduces H1 loss thanks to hefty drop in impairments

Digital technology group Monitise has substantially reduced its first-half pre-tax loss, thanks to a hefty drop-off in impairments, and says its transformation programme is nearing completion.

Pre-tax loss was £7.5m, from a loss of £210.5m. This was achieved despite lower revenue and, crucially, lower depreciation, amortisation and impairments of £10.9m, from £179.9m.

"Our transformation programme is nearing completion, and continued half on half EBITDA profitability demonstrates that it is working," said chief executive Lee Cameron.

"Having successfully stabilised and simplified the group, the challenge now is to grow our revenue," he said in a statement.

The company had recently appointed new senior management to two of its business units, and was both committed to and optimistic about the potential of the FINkit platform.

Looking ahead, Monitise said group revenue was expected to decline in full-year 2017, but that the period would benefit from the impact of cost-savings achieved in its first-half results.

"FINkit represents a real opportunity for Monitise to establish long-term sustainable growth, and we will continue to invest in developing that part of our business throughout the current financial year," said Monitise.

It added that full-year 2017 capital spending would be materially lower than in 2016, and said cash outflows relating to onerous contracts would fall from £6.7m in H1 2017 to about £1m in H2 2017.

"Given this reduction and the stabilisation of the group, we are confident that we have sufficient funding in place to execute on our plans."

At 10:46 GMT, shares in AIM-quoted Monitise were up 1.91% to 2.67p each.