Investors could be forgiven if they've lost count of the number of AIM-listed growth companies that have seen revenue delays on bigger contracts due to various issues of timing, scale and complexity. Crowd funding professional services platformer Blur Group (BLUR:AIM) is among those that spring to mind.

Today's it's the turn of mobile commerce network Monitise (MONI:AIM) to take the jam out of investor doughnuts. In a trading update this morning the company revealed a revenue miss for the year to end June, which will mean bigger losses too. To put meat on the bones, Monitise revised down its revenue growth guidance to between 31% and 33% from previous 40% expectations. As analysts at Berenberg point out, this is the second downgrade his year from initial guidance for 50% growth.

MONITISE - Comparison Line Chart (Rebased to first)

According to Canaccord's number crunching, that means about £96 million rather than the £102 million predcited by the broker, so no disaster. Yet this readjustment to expectations has swiped 16% of the shares to 41.25p, or in other words, slashing almost £150 million off the market value.

At the heart of the issue is Monitise's switch in business model away from licences and upfront fees to a user-based subscriptions. Shares explained the potential threat of this move when it was first unveiled in March, alongside the company's £109 million cash call. Net cash currently sits at £144 million.

'The short-term effect of that will be Monitise carrying more of the infrastructure set-up expenses as new clients sign-on.' However, we also pointed out that there was a positive flip-side, flagging that such a transition should also make switching on to Monitise’s network faster, easier and cheaper for new banking, retail and mobile network operator (MNO) clients.

Monitise goes on to claim that its original £102 million revenue guidance would have been beaten had these several contracts remained upfront licences. But remenmber, Monitise has become a dab hand at moving the goalposts, previously delaying a profits breakthrough due to what Monitise saw as a landgrab opportunity in a rapidly growing space.

There's nothing necessarily wrong with changing tack, management would be remiss to sit on its hands just to keep old promises. Much better to stay ahead of emerging trends and lead from the front. And the market dynamics are undeniable. In a neat bit of timing, new findings from market researcher Juniper reveal estimates that more than 1.75 billion mobile phone users will have used their devices for banking purposes by the end of 2019, compared to 800 million this year.

For Monitise's part, it currently has 30 million registered users, up from 28 million in February, and manges around four billion transactions. The equivalent number was 2.4 billion a year ago, while value of those transactions is up 120% to £88 billion. Yet that still leaves Monitise with an awful lot of work to do to hit its current target of 200 million registered users by full year 2018 on which it hopes to earn 250p in annual revenue per user (ARPU). Targeted earnings before interest, tax, depreciation and amortisation (EBITDA) margins of 30% would mean £135 million EBITDA. But five years is a long time in the life of Monitise.

Issue Date: 08 Jul 2014