It's not been a great year for Monitise. Once hailed as a shining example of what Britain's tech sector can offer the world, the mobile payments company's been in dire straights, with losses accelerating and its shareprice sliding more than 75% since peaking in February 2014. Today it's taken another hit as the board announced it had cancelled plans to look for a buyer and that co-CEO Alastair Lukies would step down.
Credit: Yahoo Finance
It's a big blow for Lukies, the former professional rugby player who founded the business back in 2003. He hired Elizabeth Buse, an American former Visa exec, as his co-CEO last June, but now it seems like there's only room for one top dog. He's left his job and the board of the company with immediate effect, though Monitise said he 'remains available to the company' as 'founder and strategic adviser' to Buse.
It was all pleasantries and handshakes on the PR front, of course. 'On behalf of the board, I would like to thank Alastair Lukies as the founder of, and inspiration behind, Monitise,' said chairman Peter Ayliffe. 'His vision, tireless hard work and energy have created a business that has delivered leadership in its space and given us the base from which we can build a long-term successful business.'
The AIM-listed company, which makes the back-end systems supporting mobile phone transactions, has been exploring its options since January after posting a £30m loss on £42m revenues in the six months to December 31. But made the board made it clear a sale was was off the table today despite receiving 'a number of expressions from interested parties', as none of these lived up to what it sees as the 'longer-term value of Monitise'. This morning its shares plunged a further 14.5% to 15.4p.
Buse's task now is to turn the loss-making business back around. The board says it expects to lose £40m-£50m in this full year but that it can break even next year as sales continue to grow. 'I am extremely confident that the business is at a point in its development where the prospects for delivering long-term value are excellent,' said chairman Peter Ayliffe.
It won't be easy though. The company's got some impressive partnerships with the likes of Santander, Telefonica and IBM, but fourth-largest shareholder Visa threatened to dump its stake last September. Buse has certainly got a fight on her hands.