Monitise predicts positive earnings after massive write-offs

12th Feb 2016 10:45

(ShareCast News) - First-half results from Monitise showed underlying losses cut by a third as the painful restructuring of the financial software group grinds towards what is expected to be a profitable second half.However, reported operating losses before tax ballooned to £211.6m compared to £58.1m a year before, with sales slipping to £33m from £42m.As they moved from the failed attempts to commercialise a mobile banking app towards a wider focus on its FINkit cloud-based software that allows finance sector customers to build and run secure and compliant products and services.Management have written off £167m from the value of its old non-cloud assets."The essential transition to cloud-based services and sustainable recurring revenues, continues to be very challenging," said chairman Peter Ayliffe, who is now overseeing his third chief executive in a year.Chief executive Lee Cameron, promoted from chief commercial officer in September, said the company had taken "tough decisions" and "defined a clear path to take the business forward".Total costs were cut to £53.6m in the first half, down from £69.4m and projected to reduce by roughly £3m per month in the second half.Staff numbers stood at 646 at the period end, down from 950 a year before and 850 at the year end.As a result, the company's existing businesses are expected to generate positive EBITDA in the second half of the year and onwards."Investment in FINkit will be proportionate to the timing and scale of contracts signed and we will continue to evaluate all assets in order to preserve and maximise value for all stakeholders," Cameron said.Shares in Monitise, having fallen from a peak of just over 80p to below 1.7p over the last two years, bounced to 1.81p by 1400 GMT on Friday.