It's been a rough year for shareholders of Montise Plc (OTCMKTS:MONIF). A series of management departures left many wondering if MONIF was a sinking ship. Visa announcing last summer that they would be selling off their stake in the company did not help. Add in a series of negative articles on Seeking Alpha and you get a depressing situation. However, we think shares have now fallen too far, too fast and are do for a turnaround.Montise bills itself as the largest mobile money specialist in the world with a single-minded and realistic vision: to make money totally mobile across the globe. MONIF is working with over 300 of the world’s leading businesses and financial institutions across global territories to make the most of the opportunities this creates.The company offers a strong mobile banking platform through its Bank Anywhere, Pay Anyone, Buy Anything, and Engage Anytime services and has developed strong partnerships with Visa and MasterCard that connect it with millions of users around the world.Already 28 million consumers benefit from Monitise’s patented technology to ‘bank anywhere’, ‘pay anyone’ and ‘buy anything’, accounting for $71bn of payments, purchases and transfers annually.
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The problem at the current price level of $.03 per share is that investors are pricing MONIF for bankruptcy. This shouldn't be the case as the company is trading at a discount to its cash position. Gross cash of £88.8m as at 30 June 2015 provides balance sheet strength to see Monitise through to break-even and beyond. While the company is currently burning cash, management forecasts that MONIF will see positive EBITDA starting this year.The reality is that MONIF is everywhere. Consumers can buy and sell online, pay bills, move money around, book tickets and accommodations, and perform everyday tasks all using Monitise technology. Monitise provides specialized technology and associated services that help clients, particularly financial institutions, deliver innovative digital experiences to their customers.The Company is transitioning to become a cloud business to meet the evolving needs of the industries and clients it serves. Going forward the company will focus on Europe, the Middle East and North America. Monitise's new cloud platform is at the core of its strategy. The platform provides 'ready-made' products (Software as a Service/SaaS) as well as a 'build your own' (Platform as a Service/PaaS) capability, with bank-grade security and compliance for financial institutions and beyond. This is complemented by a dedicated on-premise platform that supports businesses that want to leverage Monitise products behind their firewall, together with the digital agency based in London, Istanbul and San Francisco, and the London-based content business.Monitise's cloud platform launched in April 2015. It is a private cloud running on IBM's Bluemix scalable infrastructure. It provides API-based delivery of Monitise SaaS products, as well as through the Company's new PaaS offering, giving financial institutions a secure environment where they or other fintech developers can develop and operate their own applications.For this year, MONIF will most likely see no revenue growth. Operating costs are likely to decline on the back of layoffs, lower IT costs, and exiting non-core regions. MONIF expects to end 2016 with £45m in cash.Chairman Peter Ayliffe pretty much summed up MONIF's situation.
"Monitise has made substantial progress during the year in moving the business to the cloud. We are well aware that our transformation of the business, while absolutely necessary, has been slower and more challenging than expected and has significantly impacted our financial performance, which we recognise has been disappointing and led to us having to revise some of the financial targets we had set for the year. We have improved our cost disciplines and the fundamental drivers underlying our business remain strong. The Board and leadership team continue to take the necessary tough decisions and we are confident that Monitise is well placed to deliver value for shareholders as we serve our clients and partners."
We Have A Monster Pick Coming Soon!
Currently trading at a $71 million market cap, MONIF is a likely turnaround candidate in 2016. We feel that the worst is already baked into the share price and that the worst is behind the company. At just $.03 per share, there's the potential to make several times your money with minimal downside risk. We will be updating Insider Financial with the latest on MONIF as soon as more details emerge. Be sure to sign up and get our latest updates.
Disclosure: We have no position in MONIF either long or short. We have not been compensated for this article.
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