LONDON (ShareCast) - As mobile app stores continue to increasing their sales of digital content using direct carrier billing, Bango has seen end user spend via its technology increase 62% to £25.2m last year and said it expects this to more than double in 2015.
The majority of end user spend growth came from the initial ramp up of Google Play transactions, which are expected to accelerate into 2015, due to the growing adoption of direct carrier billing, which allows mobile users to add the cost of an app or other small mobile purchase to their monthly phone bill.

However the AIM-listed company's annual losses grew to £5.4m from £4.9m due to a strategic switch from asking clients for up-front activation fees to a monthly payment of fees.

Bango's gross profit on end user spend grew by 71% to £0.60m and it made a total gross profit of £1.3m, with its operational cost base stablising at £5.0m from £5.1m the year before.

"In 2014 Bango focused on maximising market presence, and success was demonstrated by the fact that every major app store that has moved to offer direct carrier billing has chosen to work with Bango," said chief executive Ray Anderson.

He said with these agreements and a strengthening market position, the company is now focused on the completion of new activations between mobile network operators (MNOs) and app stores to enable them to benefit from higher conversion rates with Bango. The number of MNO integrations topped 140 in the year and more are anticipated this year.

Looking forward, Bango expects end user spend from activations live in December 2014 to grow by at least 100% to an annualised run rate of over £65m by December 2015.

In addition to this run rate Bango has more than 30 activations already scheduled for launch in 2015 which are expected to contribute further to end user spend growth, and a pipeline of more than 100 further activation opportunities in 2015.

The current guidance on end user spend does not include any impact from these activations, nor from the new app store partnerships announced with Amazon and Samsung towards the end of last year.

House broker Cenkos has re-introduced forecasts to 2017 when it foresees Bango will break even at the pre-tax level, after a £4.3m pre-tax loss in 2015, falling to £2.8m in 2016.

Analyst Ian McInally said he believes that "there are now clear signs Bango is starting to realise the potential for substantial growth", with a strong pipeline of MNO/app store integrations, enduser-spending starting to grow significantly and a stable operating cost base.

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