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Bango confident on 2020 prospects as it swings to profit

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: 155 GBX

LSE:BGO
Market: LSE
Market Cap: £115.02 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

In March, Bango launched carrier billing payment services for Hatch, a monthly subscription-based 5G games streaming platform.

Hatch allows users to stream top tier gaming titles to their phone without the need to use storage capacity on their devices.

In the year to 31 December, Bango reported that adjusted earnings (EBITDA) had swung to £450,000 from a loss of £870,000 in the prior year while revenues jumped 41% to £9.3mln.

End user spend (EUS) increased to £1.1bn from £0.56bn in 2018, continuing a trend of doubling each year, with the company adding that the coronavirus outbreak could generate higher levels of EUS is users spend more time at home on their mobile devices.

 

What the boss says: Paul Larbey, CEO

"2019 was a great year for the continual evolution of the Bango Platform. In line with our strategy, once again we doubled End User Spend, but more importantly expanded our market opportunity with the development of our data monetization business."

"Bango Marketplace is now established and enters 2020 with a strong pipeline."

"Bango's ambitious growth plans have delivered profit and, as I look at the opportunities ahead in 2020, my confidence in our ambitions is reinforced by Bango's unique combination of payments with data-driven intelligence for our customers and partners around the world."

 

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Inflexion points

  • EUS growth to be "exponential" in 2020
  • More deals expected to close in the first half of 2020

 

What the broker says

In a note published in March, analysts at Bango’s house broker finnCap retained their 225p target price for the group, saying the company’s ambitious growth plans have now delivered cash profit and Bango’s unique combination of payments with data-driven market intelligence open additional opportunities ahead in FY 2020”.

“With profit in sight and £2.7m cash on the balance sheet Bango is well-positioned and during the pandemic EUS could see a substantial boost from stay-home spending in app stores and subscription services”, the broker added.

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