Monitise considers sale after further revenue warning

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British mobile payments company Monitise is considering putting itself up for sale after issuing its third revenue warning in a year.

The tech company, which sells mobile banking software, said on Thursday that it expected to make a £40-£50m loss in 2015, The Financial Times reported, a larger one than originally expected. Monitise said that it expected revenues for 2015 to be flat at £90-£100m, rather than growing by 25 per cent to £119m, as previously projected.

Monitise provides payment solutions to 350 financial institutions, including Royal Bank of Scotland, MasterCard and Santander.

Monitise reiterated that it expects to be profitable by 2016, but still has many obstacles to overcome.

The company has struggled over the last year after shifting its strategy from building apps to an attempt to become a next-generation platform connecting banks with retailers and telecommunications companies. The move to a network model pits the company against big tech companies such as Google and Apple, who have both released their own mobile payments ventures.

While neither has gone mainstream, Monitise’s move seen revenues from its software licenses halve in the last six months of 2014 to £4.4m compared with the preceding six months, and development and integration sales declined 13 per cent. Subscription and transaction revenues for its platform increased just 8 per cent to £16.2m.

The company is also facing competition from UK banks themselves, who now consider mobile payments as an essential part of their business and are moving their production in-house.

IBM could be a potential buyer if the company opts for a sale, the FT report added, as it already has a partnership with Monitise as part of a cost-cutting exercise that saw Big Blue take on a fifth of the tech company’s staff.

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