TIDMBOKU
RNS Number : 6691Z
Boku Inc
14 January 2020
14 January 2020
Boku Inc.
("Boku" or the "Company" and, together with its subsidiaries,
the "Group")
Trading Update
Strong EBITDA growth from Payments division and progress in the
build out of the Identity division
Boku Inc (AIM: BOKU), the world's leading independent carrier
commerce company, is pleased to provide the following unaudited
trading update for the financial year ended 31 December 2019.
The Group saw continued strong payments growth in H2 2019 which
is now translating into higher levels of EBITDA due to the powerful
operational gearing, together with revenue progress in its Identity
division.
-- Group revenue for 2019 is expected to be in the range of
$50.0m to $50.5m (2018 $35.3m); an increase in excess of 42% on
2018
-- Group EBITDA* is expected to be in the range of $10.0m to
$10.5m (2018: $6.3m); showing an increase of over 59% on 2018
-- The Company held approximately $35.6m in cash at 31 December
2019 (30 June 2019: $27.9m, 31 December 2018: $32.3m). The average
daily cash balance, a measure which smooths out the effect of
carrier and merchant payments, was $22.4m in December 2019 (June
2019: $22.2m, December 2018: $24.4m)
Boku Payments
Boku Payments has had another very positive year with strong
operational leverage coming through:
-- Processed Value ("TPV")** of $5.0bn for 2019 compares with
$3.6bn in 2018. Growth was steady throughout the year with volume
in H2 2019 $418 million higher than in H1 2019
-- Monthly Active Users ("MAU") of the Boku payments platform in
December 2019 increased to 17.8 million, up 2.6 million from the
half year and 4.4 million higher than December 2018
-- Payments revenue is expected to be approximately $43.3m, an
increase of 23% (2018: $35.3m) and approximately 87% of the Group
total
-- Payments EBITDA* is expected to be at least $15.0m, up 138% (2018: $6.3m)
-- These results include $3.2m of non-recurring revenues that
were in the Company's guidance for 2019 which similarly impact
payments EBITDA; underlying payments revenues are expected to show
growth of 14% on 2018
-- H1 2019 payments revenues included $0.4m of revenue which was
recognised immediately under IFRS where previously recognition was
monthly. This had the impact of increasing H1 revenues by $0.4m and
reducing H2 revenues by the same amount
-- Encouraging progress made on adding e-wallets to the Boku
payments platform, primarily in Asia, alongside carrier billing -
which represents an opportunity which could materially expand
Boku's total addressable market at minimal incremental cost
-- The focus of 2019 has been to strategically plug in the new
carriers demanded by lower margin, high volume accounts
Boku Identity
The Boku Identity division was created following the acquisition
of Danal Inc on 1 January 2019 for a final total consideration of
$25.1m, as announced on 6 January 2020.
-- Billable transactions increased by 45% to 253 million
-- Identity revenues of $6.7m, up 26% on 2018 (2018: $5.3m pro forma)
-- Revenue in H2 was impacted by local US supply headwinds
-- Identity EBITDA* loss of $5.0m (2018: $6.4m pro forma loss)
-- Transformation of Identity business from US-only to global business underway
-- Building out of global silent, frictionless authentication Identity product in progress
* Adjusted EBITDA: Adjusted for stock option expenses, Forex
gains/losses and Exceptional items
** TPV is the US$ value of transactions processed by the Boku
platform
Jon Prideaux, Boku's CEO, commented: "Our merchants hire us to
help them acquire new paying users: during 2019 nearly 19 million
end-users made their first transaction through Boku, helping our
customers to drive their growth. Collectively our merchants
generated more than $5.0bn of TPV through the Boku platform.
"Platform businesses have wonderful gearing. It took us a decade
and more than $100m to build the Boku payments platform which now
connects more than 190 carriers worldwide and most of the world's
largest digital merchants. We continue to make new connections --
this year we concentrated our efforts on plugging in the new
carriers demanded by lower margin, higher volume, transaction model
merchants; in 2020 and beyond these connections will be reused for
other, higher margin settlement model merchants. A revenue increase
of 42% has translated into a more than doubling of payments EBITDA:
a fabulous result.
"We are excited at the potential of e-wallets. In Asia, the
leading m-commerce region, e-wallets are the dominant payment
mechanism, eclipsing card-based payments. On the supply side we
have made significant progress: further to the announcements about
our partnerships with the GrabPay and GoPay wallets, we now have
signed agreements with ten wallets with more than 1.4 billion
customers in nine countries. By the end of 2020 we expect to have
all the major wallets connected. Demand from our existing merchants
is strong. As a competitively priced payment mechanism, wallets
have the potential to materially expand our Total Addressable
Market at modest cost, with extra margin generated flowing through
to EBITDA. The early signs from GrabPay on small merchants are
encouraging. The exact timing and quantum of these revenues is
difficult to quantify and so have not been built into any
forecasts. Nevertheless, we are confident that we will see a
material revenue impact from e-wallets over the medium term.
"We made steady progress in 2019 with Boku Identity, with
revenues increasing 26% and losses reducing. This US based revenue
increase was achieved despite some headwinds from restructuring of
the Identity management team and some supply side issues in the US.
Demand from global companies for a secure and simple worldwide way
of verifying users on mobile is plentiful, with six potentially
transformative deals in the pipeline. Realising this potential
needs global supply from non-US carriers on which we are expecting
to make further progress in 2020.
"We look forward to reporting on progress with both divisions,
along with our audited results, at the end of March 2020."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/ 2014. For the purposes of
MAR and Article 2 of Commission Implementing Regulation (EU)
2016/1055, this announcement is being made on behalf of Boku by
Keith Butcher, Chief Financial Officer of Boku.
Enquiries:
Boku, Inc.
Jon Prideaux, Chief Executive Officer +44 (0)20 3934
Keith Butcher, Chief Financial Officer 6630
Peel Hunt LLP (Nominated Adviser and Broker)
Edward Knight / Nick Prowting / Christopher +44 (0)20 7418
Golden 8900
IFC Advisory Limited (Financial PR & IR)
Tim Metcalfe / Graham Herring / Florence +44 (0)20 3934
Chandler 6630
Notes to Editors
Incorporated in 2008, Boku is the world's leading independent
carrier commerce company. Boku's Platform, which is linked to
billing, identity and sales systems of more than 190 mobile network
operators, simplifies transacting on mobile devices.
Boku's Payment products enable mobile phone users, of which
there are more than five billion worldwide, to buy goods and
services and charge them to their mobile phone bill or pre-pay
balance. Its Identity Products are used to verify user details.
Companies like Apple, Google, Facebook, Microsoft, PayPal, Spotify,
Square, Sony and Netflix use Boku to simplify sign-up, acquire new
paying users and prevent fraud.
This information is provided by RNS, the news service of the
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END
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