With Phase 1 of Monitise Central Platform set to be launched on April 3, BTIG analysts believe the mobile payments provider is finally on the verge of re-acceleration in its business expansion.

In their March 11, 2015 research note, Mark Palmer and Giuliano Bologna of BTIG Research peg Monitise’s 12-month price target at 52 pence from the current market price of 19.75 pence.

MCP due for launch in April

The BTIG analysts point out that a strategic review that Monitise initiated on January 22 enters its eighth week now, and the mobile payments provider is just over three weeks away from an important operational milestone viz.: the launch of the highly anticipated MCP. However, the launch of Phase 1 of MCP has been largely overshadowed by speculation about the outcome of the strategic review.

The analysts draw reference to CEO Alistair Lukies’ emphatic statement during a Capital Markets Day last month wherein he indicated that the mobile-money specialist “absolutely” hasn’t put itself up for sale. As reported by ValueWalk, the CEO indicated that the results of the company’s strategic review thus far had provided validation of the company’s value.

They also note if Monitise is to remain an independent company, then the ability of MCP to steepen the mobile-money specialist’s growth trajectory is crucial to the future performance of the stock.

Significance of MCP to Monitise

Palmer and Bologna point out that MCP, a bank-grade, cloud-based service delivery platform, should help address some of the challenges Monitise Plc encountered with its existing Monitise Enterprise Platform (MEP) and Monitise Vantage Platforms (MVP), with regard to the effort and cost associated with providing customers with incremental services.

They note MCP should provide the mobile payment provider’s clients with a much more user-friendly experience through the use of Application Program Interfaces as well as performed-based pricing. Monitise Plc will also get benefit from MCP’s speed to market and scalability, with MCP sales cycles being much shorter than its erstwhile enterprise IT model.

Apart from banking and payment applications, Palmer and Bologna point out that MCP also has a component devoted to mobile commerce applications. Though banking will remain the mainstay of Monitise Plc’s growth, MCP will facilitate banks that already have their own mobile banking applications to connect to the platform to offer additional m-commerce services to their customers.

The move to a cloud-based approach should also lower Monitise’s capital expenditures and operating expenses. The analysts note with the build-out of MCP coming to an end, capex should be substantially reduced. Moreover on an ongoing basis, MCP would require lower headcount for development and integration services and would feature a more variable-cost approach.

Furthermore, although Monitise Plc’s growth has flattened out in the aftermath of its shift to a subscription-based model a year ago, MCP will likely propel its growth, and accordingly pegged Monitise Plc’s target price at 52 p based on 12x FY 18E EBITDA of GBP 114.79 mm discounted back at 12%:

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