Monitise shares fall as Visa considers stake sale

London: Shares in Monitise lost a quarter of their value on Thursday morning after Visa said it was “considering its options” on its 5.5 per cent holding in the high-profile UK tech group.

The global card payments group took a near 15 per cent stake in Monitise in 2009 and established a commercial partnership with the Aim-quoted mobile banking software group, under which it would provide Visa with platform development services until the end of 2016.

But the Californian company has gradually sold its Monitise stake down to 5.5 per cent and Visa is seeking to bring more of its mobile development resources in-house. Visa said on Thursday morning it had appointed JPMorgan to advise on its options regarding the Monitise stake.

The news caps a difficult few days for Monitise, set up in 2003 by former Saracens and London Irish rugby player Alastair Lukies. Results for the year to the end of June this week showed a 30 per cent increase in full-year sales, but losses before interest, tax, depreciation and amortisation grew at double the rate — widening by 62.5 per cent to £31.4 million.

Considered one of the high-flyers of the UK tech scene, Monitise is attempting to revolutionise the evolving mobile payments industry and bring big banks into the digital age.

As well as its partnership with Visa, it has also signed a strategic agreements with Santander — the largest bank in the Eurozone by market capitalisation — and Visa’s rival, MasterCard.

Monitise, which floated on London’s junior market in 2007, is considering a move to the main London market. It has overhauled its board in recent months, recruiting two Visa executives — Elizabeth Buse, who joined as co-chief executive in June, and Mike Dreyer, Visa’s global head of technology, who was appointed president for the Americas this month.

Monitise’s shares were down 29 per cent at 30p in early Thursday trading. The shares have fallen more than 60 per cent since reaching an all-time peak of 81p in January.

The company has been knocked this year by global nervousness over tech stocks, as well as two profit warnings. The company announced in March that it would shift from a licence business model, which required its customers to pay a large upfront fee, to a subscription-based model that would reduce costs.

At the time of publication, the company had yet to respond to a request for comment.

— Financial Times