Bango - based in Cambridge - is a company I am very familiar with, which after a number of years laying foundations, could be set to deliver.
Back on a dank November day in 2013 I trotted along to meet Ray Anderson, co-founder of Bango at its Cambridge based HQ to take a look at what the company was doing and where it was heading.
Fast track seven years and this developer and provider of payment and data analytic solutions for mobile phones and connected devices has demonstrated an ability to expand, scale up and thus, seek to make its mark in delivering on the all important investor holy grail of solid and growing cash generation.
Having met and spoken with Ray a number of times over the years keeping a close eye on Bango developments, I have today once more had the opportunity for a catch up, where he now resides as Executive Chairman and was joined for the call by other board members.
This time round, the sun shining on a balmy September day is far removed from that early November and in some ways so too, is the Bango business, which now looks set for its own bright period as its Interim results and recent news flow suggests that it is on the cusp of moving to an altogether new level.
Whilst the company has had its fair share of detractors over the years (often dare I say it through a lack of understanding the business) the results today make for positive reading and endorse the view of an increasing number of watchers that the company is now well on its way, as end user spend (EUS) increases substantially and the model benefits from operational gearing kicking in.
The Interim numbers saw an impresive 59% jump in EUS to £743m with Bango's revenue increasing by a similar percentage to £4.8m resulting in EBITDA of £1.1m and net cash increasing to £4.2m.
And, sounding a positive tone on the full year in play Bango looks on course for recording £2bn in that EUS, which should see it also registering £12m in revenue and full year EBITDA of £3.4m.
Ray says “its obviously very welcome and good news that end user spend is growing so fast with more roots and the users continuing to grow.
“If you look at say a two billion number, that may sound a lot, but we are really only scratching the surface with that figure. With more and more data and increasing merchants, there are further roots in what is really a virtual circle”.
Of course, as we touch on, Bango is a whole different beast to that of 2013 with solid foundations laid and now a whole lot more going on to drive the business forward.
Bango Audiences is one such aspect of an expanding model and the services which Ray talks of as being something of a significant revolution.
“It is extremely efficient” he says, adding that it enables merchants to know what people have been buying and what they are likely to buy in the future or even what sort of customer they are providing for, giving a focus on the best return.
He also points out that they have increased their take up from 207 app developers to 1,600 and that has been achieved in 9 months.
Just yesterday the company announced further partnership agreements within this space across Asia which includes amongst others Tec-Do a leading China based performance network, which further underscores the strength of Bango Audiences.
Ray is also delighted with the news earlier this year relating to Korean based NHN as he comments, “we had been doing some work with NHN prior to the investment where it is one of the Internet Goliath's in S.Korea and which is now expanding beyond its base. We are now pushing on with our relationship that has a great future and should bear fruit in the coming years”.
Although Bango's shares are off a bit today at £1.63p, holders will no doubt sit tight, whilst others who have been residing on the sidelines could well now be tempted to bite the bullet and make their entry.
Certainly, the shares on a fundamental basis are highly rated and have often been so over the years, but investors eyeing both near and long term growth who are prepared to pay for that today, may wish to take a closer look at the Cambridge based operation, which looks to be in a very sweet spot.
Back on that November day, much of what Ray Anderson perceived around the area in which he had positioned Bango has since come to fruition and now sees the company mirroring its own offering, being connected with the many, and which given the trends, is likely to drive further significant and quite probably exponential growth.
The recent Covid situation has both followed on and coincided with a number of further positive deals for the company that have clearly assisted and has no doubt contributed to an acceleration of its growth trajectory.
A three year platform deal with a major global telecom player worth £1.5m, along with a digital carrier billing extension for Amazon Japan aligned to further growth via leading online merchants such as the former, alongside both Google and Microsoft all bode well and follow on from previous positives announced during 2019.
Cash generation importantly is now firmly on the agenda with an expectation of a marked increase in EBITDA, although there will still be room for R&D spend as is required.
Revenue is now rising rapidly at Bango, where with what is a platform largely operating on a fixed cost provides for maximising the benefits of operational gearing, which sees broker FinnCap forecasting EBITDA margins of 40% within two years.
It has certainly taken Bango some years to get to where it is today and Ray reminds me of our first meeting when end user spend was he recalled, north of £20m.
Now, having cemented the connections and driven growth, the underlying process platform is already generating cash which finds it in a position where increasing revenue on the back of ever increasing EUS should drop right to the bottom line.
“Driving the growth is really key” says Ray, “whilst we will also continue to manage costs and open up new doors moving forward”.
In relation to acquisitions, this doesn't appear to be a big feature, despite the company having concluded a purchase two years ago, the line being that they are really concentrating on organic growth and anything looked at would really be a strategic move.
That perhaps suggests that whilst it isn't ruled out, nor does it seem very likely in the foreseeable future as Bango appears to have enough to target as it is and looks set for further news and delivery as we move forward.
Without doubt Bango now appears to be coming of age and in an ever evolving digitally connected world that has seen acceleration in the current climate, it looks extremely well placed and ripe for further progress.
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