Shares of Monitise PLC (OTCPK:MONIF) have soared over the last week as I feel investors have finally started to realize the potential within this company. If your not yet familiar with the name your not alone, the company trades primarily in London under the ticker symbol MONI.L but also on the over the counter market here in the United States under the ticker symbol MONIF.PK. Monitise is a mobile banking, payments and commerce technology company with a global reach. Many of the world's most powerful financial institutions, including 1/3 of the top 50 banks in North America, choose Monitise's proprietary platform solution to power their mobile banking divisions.
A couple months ago I wrote an in depth article analyzing the company's products, platforms, and potential growth in the years ahead. You can find "Monitise: A Pure Financial Services Play" here! Since that article was released shares have moved from $0.53 to $0.73 at the time of this writing. A 37.5% gain in a matter of months is tempting, however, in this article I would like to reaffirm my growth thesis with an updated look at the company's recent performance and news since last time.
Monitise announced an unaudited trading update following the end of its fiscal year on June 30th. The company nearly doubled its revenues to £70m, compared to £36m in full year of 2012. At the end of the year the company held £85.6 million in cash, £23 million registered users, and generated £2.4 billion in live transactions on an annualized basis. The company is expected to release its full results in the beginning of September.
North American Expansion
Earlier in the week it was announced Monitise was chosen by the Desjardins Group to offer its customer a mobile payment platform. The Desjardins Group is the largest association of credit unions in North America. The agreement with Monitise will allow Desjardins to offer its members and clients a simple and secure contactless mobile payment application. Monitise will develop the mobile payment application for Desjardins in collaboration with their trusted service manager, EnStream, a joint venture between Canada's major mobile network operators. The application will allow Desjardins members and clients to make purchases at Canadian retailers securely and conveniently using their smartphone. I really love this partnership for a couple big reasons.
The first, this partnership fits well with Monitise's partnership with Blackhawk Network Holdings earlier in the year. Through Blackhawk Network holdings, users will be able to purchase gift cards and credit for merchants directly though their application. Desjardins Group customers will hopefully have the ability to purchase gift cards within the application, then directly use these credits at their favorite retailers all while leaving the wallet at home. Think Starbucks (NASDAQ:SBUX) Mobile Payments...
Second, Monitise could possibly leverage its platform to integrate direct merchant advertising. The company has stated it has the ability to advertise to customers through its platform but should it decide to leverage this technology with mobile payments itself, cha-ching. The mobile application is set to be release in 2014 and will of course meet the Canadian mobile payment guidelines set forth last year.
In the short term I think shares will continue to perform well as the company offers investors easy exposure to the mobile financial services space. Revenues are growing nearly 100% on a yearly basis as its partnerships offer sustainable growth over the long term. If you are looking to start a position in the company today please keep Monitise in the speculative portion of your portfolio.
Disclosure: I am long OTCPK:MONIF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.