Monitise announces proposed ₤11.8 million Subscription for new ordinary shares at 15 pence per share

Pre-close trading update for the 12 months to 30 June 2008

Monitise plc ("Monitise" or the "Company"; LSE: MONI.L), the leaders in mobile banking & payments in the UK, announces a proposed Subscription for new ordinary shares and provides an update on trading for the 12 months ending 30 June 2008, as set out below.

Subscription

• Monitise has signed agreements with investors to subscribe for 78.6 million new ordinary shares in Monitise;
• £11.8 million gross subscription proceeds to be used to drive the continued development of its business;
• Subscription Shares represent 23.6% of the issued ordinary share capital of Monitise immediately following completion of the Subscription;
• New investors comprise:
  • Standard Chartered Bank, a subsidiary of Standard Chartered PLC the FTSE 100 UK bank, subscribing for 33.3 million Subscription Shares, representing 10.0% *of the issued share capital of Monitise immediately following completion of the Subscription;
  • A subsidiary of PCCW Limited, the premier telecommunications provider in Hong Kong and a world-class player in information & communications technologies, subscribing for 20.0 million Subscription Shares representing 6.0%*;
  • Lochside (International) Ltd, an investment company associated with the Fleming family, subscribing for 6.7 million Subscription Shares, representing 2.0%*
• Existing shareholders comprise
  • UBS is subscribing for 10.0 million Subscription Shares, representing 3.0%*
  • Harris Associates is subscribing for 8.6 million Subscription Shares representing 2.6%*
• The Monitise Board (accounting for 8.5% of the current issued ordinary share capital of Monitise immediately prior to the Subscription and 6.5% immediately following completion of the Subscription) unanimously recommends the Subscription;
• Monitise has also received expressions of support for the Subscription from shareholders, which taken together with the Monitise Board, represent in excess of 50% of the current issued ordinary share capital of Monitise; and
• The Subscription is conditional (inter alia) on Monitise shareholder approval and the admission of the Subscription Shares to trading on AIM.

Result of Subscription

• The £11.8 million (before expenses) to be raised via the Subscription together with current cash balances across the Group in excess of £9.5 million will provide Monitise with total cash of approximately £21 million immediately following completion. Monitise currently anticipates that, before taking into account any group revenues, its cash costs for the year to 30 June 2009 will be approximately £13-£14 million;
• The Subscription will provide sufficient flexibility for Monitise to continue to implement its development strategy; and
• The Directors of Monitise believe that the New Investors can assist Monitise in the development of its business in a number of new territories

Pre Close Trading Update

• Results for the year ending 30 June 2008 anticipated to be broadly in line with expectations; continued positive progress with the development of the business;
• Revenues for the full year anticipated to end close to market expectations, reflecting a significant half on half improvement, with second half revenues approximately two and a half times that recognised in the first half of the year;
• Operating loss anticipated to be marginally favourable to market expectations;
• Focus on our preferred joint venture model as the Group expands into other strategic markets; and
• Confident that the momentum built up in expanding Monitise's product offering, partnerships and joint venture relationships can continue as the Group moves forward

Alastair Lukies, CEO of Monitise, said:

"We are delighted to announce this Subscription which will provide Monitise with the financial strength and flexibility to implement its growth plans in a timely way, continuing to take advantage of the increasing demand for mobile banking & payment services worldwide.

"We anticipate reporting results for the year broadly in line with expectations and have continued to make positive progress developing the business in the second half of the year. Our ongoing cash spend is beginning to plateau, as we anticipated at the half year, and we remain focused on our preferred joint venture model as we expand into other strategic geographic markets.

"We have built real momentum in expanding Monitise's product offering, partnerships and joint venture relationships and are confident that this can continue as we move forward, supported by our new investors whom we believe can assist us in the further development of our business in a number of new territories."

Duncan McIntyre, Chairman of Monitise, said:

"We have been very encouraged by the response to this process and we very much look forward to welcoming our new investors. The strength of our technology, the understanding of the mobile banking & payments market, our development of a industry leading road-map and the knowledge, experience and empathy of the broad management team have been acknowledged by numerous leading organisations worldwide. This has created additional momentum not only within the business but also in the market in general."

Jan Verplancke of Standard Chartered Bank, added:

"We see this as a very attractive opportunity to participate in a dynamic growth company operating in a rapidly developing global market. Monitise is a leader in the mobile banking & payments market and our commitment to the continued development of Monitise reflects our enthusiasm for this opportunity. It is exciting to find an innovative, fast growth company that combines so intuitively bank grade processes & security with mobile technology innovation."

click here for more