Monitise falls following successful placing

Monitise is down following its successful placing of the first tranche of shares in a 100m pound fundraising.

The total fundraising entails placing 333.3m shares at 30p in two tranches. The first tranche of 114m shares in a 'firm' placing with institutions will now enter the market on December 10th. The second tranche of 219.2m shares, in a 'conditional' placing with institutions, is expected to hit the trading floor on December 27th.

This placing equates to a 22.5% dilution of the current shareholder base of 1.1bn shares.

Monitise, which provides the software for payment systems on mobile phones, will use the proceeds to fund new Mobile Money products for financial institutions and payments companies.

The company, with a market cap of about £340m, has yet to make a profit but house broker Seymour Pierce has a 'Buy' recommendation on it with a price target of 60p.

The broker commented: "Management believes the proceeds from the placings are expected to drive revenue expectations 'substantially higher' over the next 2-5 years and lead to only a slight delay in near-term profitability. Management reiterated its full year 2013 revenue guidance of $110m but has not provided any guidance for full year 2014."

At 15:50 the shares were down 3.5p or 9.85% at 29.75p.

CM