Visa mobilises its money out of mobile money firm Monitise

Once a stock market darling, mobile money expert Monitise is to lose Visa Europe as a major shareholder. The finance multinational has announced that it will “reduce its shareholding over time”.

Visa Europe has steadily bought into Monitise, spending £2.1m in August 2012 when shares were around 30p, £15.6m in August 2013 when shares were similarly priced, and £24.7m in October 2011 at 35p a share.

Today, following dilution, Visa Europe has a shareholding of 5.3 per cent, which values the shareholding at a little over £9m based on a current share price of under 8p.

Monetise, which has a mobile money platform aimed at allowing the banks to exploit both developed and developing markets, has not made a profit since it was founded in 2003. It has consistently claimed that profitability – if only in terms of EBITA, rather than return on the initial investment – is a year or two away.

Monitise told us: “Our primary focus is on achieving EBITDA profitability in FY 2016. That will be driven by aligning the business to the differing growth and profitability profiles of our two areas of focus – standardised and customised platforms.”

This week, the company downgraded its revenue forecast. Revenue is expected to be £88-90m, against a guidance of £90-100m, but profits and margins won’t be revealed until results in September.

It seems that Visa Europe has decided it doesn’t want or need to be involved with Monitise anymore, but the companies issued an announcement saying: “Monitise and Visa Europe will continue to work together on a number of projects and services under the three-year commercial agreement which runs until 31 March 2016. Both parties look forward to working together for the duration of this commercial agreement and will assess on an ongoing basis opportunities to work together in future.”

Monitise has, historically, been very good at brokering partnership deals with major financial institutions and raising funds. In March, website The Motley Fool recommended buying in. The shares were at 19.25p.

It seems, however, that the company which once revelled in a share price of 80p is no longer the one the financial institutions love. ®