Bango has announced solid H1 2019A results in our view, with momentum remaining strong. At £467m, End User Spend (“EUS”) was confirmed as having more than doubled for a fifth consecutive year, and underlying opex levels remain broadly stable. A further highlight was the positive contribution from the data business, which now contributes over 25% of group revenue. We make revisions to FY 2019E earnings estimates following the release, noting, inter alia, Bango’s continuing commitment to investment in R&D to support its innovative product development. We also introduce FY 2020E forecasts for the first time which reflect the fruits of that investment.
Bango reported H1 2019A revenue of £4.3m (+64% YoY) and EBITDA of £0.01m (H1 2018A £-0.92m). The closing cash position was confirmed at £2.25m. Although lower than the FY 2018A level, we note management commentary in the H1 2019A release that cash burn levels have significantly decreased on the back of the positive EBITDA performance.
With EUS of £467.2m (+112% YoY), H1 2019A represents a fifth consecutive year where EUS has more than doubled. New commerce routes launched during the half include India, Chile, Singapore and Spain. The Amazon relationship was also expanded, and now includes Amazon Prime Now and Amazon Twitch.
Underlying Opex remained under control during the period, growing by £0.3m YoY. The Bango Platform is regularly tested with transaction volume at over £15bn/year, giving further confidence in its ability to support anticipated growth in the business.
With data revenues now contributing over 25% of group revenue, in our view H1 2019A demonstrates that Bango’s virtuous circle strategy continues to deliver.
Management continues to expect an annual doubling of EUS in the years ahead, driven by new payment route migration onto the Bango Platform, alongside new brands and commerce types joining the Bango ecosystem. Growth will enhanced by natural synergies between the payments and data businesses.
We make revisions to forecasts following the results. FY 2019E EBITDA falls by £1.8m, due to higher assumptions of investment in the data business and spend on supporting sales and new product development. We also introduce FY 2020E forecasts.