IT reseller and services provider Morse Plc plans to spin out its secure mobile banking applications operation Monitise as a separate business.
Monitise recently rolled out its mobile banking platform, Monilink, in the UK through a joint venture with ATM network operator Link Group Holdings Ltd. The software allows customers to check bank balances and receive mini-statements through their mobile phones, and is expected to have 440,000 customers by 2007, increasing to about 5 million by 2010.
Morse has an 85% stake in Monitise, with the remaining 15% held by Link. Existing customers include First Direct and HSBC, with the company currently in negotiations with other members of the Link network including Alliance and Leicester, Barclays, Lloyds TSB, and Royal Bank of Scotland.
The announcement of the spin-off came as Morse reported solid results for the year ended June 2006. The company made a net profit of 4.2m pounds ($7.9m), up from 1.2m pounds ($2.3m) the previous year, on revenue from continuing operations that fell 3.9% to 297m pounds ($565.3m). Operating profit excluding exceptional items was 7.4m pounds ($14.1m), up from 5.5m pounds ($10.5m) in the fiscal 2005.
Revenue from continuing operations does not include 70.2m pounds generated by Morse’s units in Germany and Austria, which the company sold to The Becom Group last month.
Morse’s largest business unit, UK technology and integration, suffered a 25.3% fall in sales to 140.7m pounds ($267.9m). The division provides hardware, software and associated services, and has recently been restructured to focus on high margin services work. However, Morse did not reveal how much of the segment’s sales are now derived from services.