Bango shares surge as first-half earnings jump

(Sharecast News) - Shares in Bango jumped over 10% on Friday morning after the subscription bundling and payments platform impressed with its interim results, which showed a strong increase in profits despite relatively subdued revenue growth.

Subscriptions revenues rose 13% year-on-year to $12.3m over the six months to 30 June, with active subscriptions up 33% at 25.6m.

However, revenues in the payments division, which is undergoing a restructuring, were down 5% at $13.6m. Bango is deliberately exiting or restructuring lower-margin legacy payment routes, and said the year-on-year decline was "as anticipated".

As a result, overall first-half revenues were up just 3% at $25.9m.

Nevertheless, the group saw a 310-basis point jump in the gross margin across the business to 87%, "reflecting the increasing contribution of higher-margin recurring subscription revenues and continued improvement in Payments revenue quality".

This saw adjusted EBITDA surge 34% to $9.0m, with subscriptions adjusted EBITDA more than trebling to $3.2m. Actions being taken in the payments business saw adjusted EBITDA at the unit improve 1% to $5.8m.

"The combination of growing recurring revenue and the operating efficiencies delivered last year is translating into increasing profitability across the group," said chief executive Paul Larbey.

"We entered the second half with growing recurring revenue, an improving cash generation profile and a clear focus on disciplined execution. The board remains confident in Bango's growth prospects, underpinned by expansion from within the existing customer base and a strong pipeline of new opportunities."

Bango shares were up 10.6% at 68p by 0910 BST.

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