Fonix Mobile : Interim Report 2022

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

Fonix Mobile plc

1. Adjusted EBITDA excludes share-based payment charges and AIM admission costs along with depreciation, amortisa- tion, interest and tax from the measure of profit.
2. Adjusted PBT is profit before tax excluding share-based payment charges and AIM admission costs.
3. Adjusted EPS is earnings per share excluding share-based payment charges and AIM admission costs.
4. Underlying cash is actual cash excluding cash held on behalf of customers.

Operational highlights

• Total payment value ("TPV") of mobile payments grew strongly by 12% to £138m (H1 FY21: £123m)

• 12 new customer contracts signed in period, including BOTB and The Ruth Strauss Foundation, as well as several gaming clients connected to our new partnership with a global payments platform provider. The active customer count also continued to grow strongly by 10% YoY to 116 active customers at the period end5

• Double-digit growth in gross profits from existing customers

• Record levels of business were achieved in November and December, including 84m SMS Messages processed in a single month

• Doubled the size of the commercial team in the period, with focus on the transport & ticketing sector

• Fonix continues to maintain high client retention, with over 99% of income of a repeating nature

• Several innovative new product features added including multi-currency reporting in Campaign Manager to support overseas clients, as well as direct-to-consumer refunds, a market first for UK carrier billing

• 100% platform uptime in the period

• Fonix's three service lines of payments, messaging and managed services have each grown in the Period and the business retains a growing pipeline of significant prospects going into H2 FY22

• The business continues to make good progress on international expansion and broadening its product suite to enhance its competitive advantage and increase its serviceable addressable market

Notes

5 Active customers are those generating more than £500 in gross profit in the previous 12 months.

Rob Weisz, CEO:

"We have continued to make excellent progress on our strategic goals in the period and decisions taken in the last financial year have, as expected, started to deliver improved margins for us.

As planned, we have invested more in sales and marketing, and we will be scaling our product team in the second half of the year as we look to continue to deliver sustainable, highly profitable growth for our shareholders, expand into new markets, continue to evolve our product set and further advance our competitive advantage."

Dividend

We are pleased to declare an increased interim dividend of 2.00p per share (FY21: 1.70p), in line with the company's policy to pay out 75% of adjusted earnings over the year to shareholders in the form of an ordinary dividend. The interim dividend will be paid on 31 March 2022 to shareholders on the register on 25 March 2022, with an ex-dividend date of 24 March 2022.

Outlook

We have continued to make great progress on our strategic goals in the period, with growth ahead of management's initial expectations and the business is showing strong momentum going into the second half of the year. As was the case last year, we're expecting the first half of the financial year to be slightly larger due to some seasonality in the trade of our customers, however the underlying run-rate remains strong.

In line with our growth strategy, we continue to invest more in future growth, with increased spend on sales and marketing, along with further investment in both product and international reach, as we look to deliver sustainable, highly profitable growth for our shareholders.

The company's new business pipeline continues to grow strongly, including several significant enterprise deals in the UK and internationally, which provide the Board with confidence in the ongoing success of the business.

Eastern European conflict

Having assessed the economic sanctions emerging from the conflict in Ukraine, we do not foresee any risk of the business being directly impacted either now or in the future, other than the potential for impacts on the UK economy.

About Fonix

Founded in 2006, Fonix provides mobile payments and messaging services for clients across media, telecoms, entertainment, enterprise and commerce.

When consumers make payments, they are charged to their mobile phone bill. This service can be used for ticketing, content, cash deposits and donations. Fonix's service works by charging digital payments to the mobile phone bill, either via carrier billing or SMS billing. Fonix also offers messaging solutions.

Based in London, Fonix is a fast growth business used by blue chip clients such as ITV, Bauer Media, BT, Global Media, Comic Relief and Children in Need to name a few.