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Bango confident over prospects as end user numbers climb

Snapshot

  • Mobile payments platform operator
  • Swung to profit in 2019
  • Could see a boost during pandemic, says finnCap
Mobile payments

Quick facts: Bango PLC

Price: 175 GBX

LSE:BGO
Market: LSE
Market Cap: £130.21 m
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What Bango does

Bango PLC (LON:BGO) is a mobile commerce operator that connects payment providers, merchants, and app stores.

The firm works with tech giants such as Google, Amazon, and Microsoft to help them process payments from their mobile customers across their app stores.

Bango also offers insights derived from the data it processes from transactions, allowing businesses to have more visibility on their customers and markets.

 

What it owns

Bango has two main strands to its business, a payments platform and the Bango Marketplace.

The mobile payments platform allows mobile app store customers to click and buy apps or in-app content and placing the charge on their mobile phone bill.

The company’s app store partners include the Google Play Store, the Amazon Appstore, GALAXY Apps from Samsung, and the Windows 10 and Windows Phone Store from Microsoft.

Bango Marketplace, meanwhile, allows mobile app developers to direct their marketing towards target customers by purchasing data segments gathered through the company’s payment platform.

 

How it is doing

Bango reported record revenue growth in the first half of its current year and reiterated its expectation that end-user spending (EUS) will hit £2bn by the end of 2020.

For the six months ended June, revenues rose to £4.77mln, up 50% year-on-year, while adjusted underlying earnings (EBITDA) came in at £1.09mln, more than double the entire 2019 EBITDA of £0.45mln.

The company also said end-user spend (EUS) in the first half was £743mln and “remains on track” to reach £2bn for the year.

EUS growth will be driven by several factors including the benefits of new contracts signed in the first half of the year coming through in the second, while the group said its deal pipeline for the rest of the year was “strong as new streaming, games and lifestyle brands join the Bango circle to help them attract, retain and monetize new customers”.

Inflexion points

  • EUS growth to be "exponential" in 2020
  • More deals expected to close in the first half of 2020
  • Push into Asia gathering speed

 

What the broker says

Research house Progressive Equity said the improvement in profitability in the first half of 2020 was the key driver of a significant improvement in operating cash flow.

Execution in the payments business remains strong, and growth in Bango Marketplace in our view demonstrates the group’s increasing traction in data monetisation.

The outlook statement was also positive,

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