Stop me if you've heard this before but this is a potentially exciting mobile banking app business with... what's that? Oh! OK, this is a well-sung tune but Vipera (VIP:AIM) arguably is an genuinely cutting edge technology developer in the fast-growing mobile financial services space. It's been around for 10 years helping several blue-chips clients set-up smartphone banking apps and revenues are growing fast, albeit from a low base.

For the year to end December 2014 revenues jumped 247% from €1.7 million to €5.9 million, according to today's full year figures. The £10 million minnow also signed up its second big bank in Germany, speculated to be Deutsche Bank.

Mobile Banking and card

Vipera has developed a system that allows bank customers to monitor, analyse and control their bank and credit cards via their smartphones. It also comes with anti-fraud bells and whistles, alerts and usual payments capabilities. Sounds promising so far but...

The trouble is, Vipera is also stubbornly loss-making and is burning through cash like there's no tomorrow. Operating losses jumped €73,121 in 2013 to €744,217 last year, and it chewed its way through another €1.1 million of cash, before financing, taking the net cash pile down to just €1 million.


With plans to significantly hike its sales, marketing and product development efforts this year, no wonder it's had to go back to investors for more funding, raising £2.7 million at 4.5p per share, a rough 12% discount to last night's 5.13p share price close. Unsurprisingly, the stock has slumped today, to 4.75p.

There are no forecasts in the market so we can only guess at what expectations are for 2015 and beyond are but it seems fair to anticipate €10 million to €12 million of revenue will be needed to have any chance of offsetting business investment. Whether that's achievable remains to be seen, as does any chance of a profits breakthrough anytime soon.

There's nothing wrong with investing for the long-term, and gaining access to growth funding is the main reason to be on a public market. But as we have seen many times, investor patience only lasts so long, and meaningful progression towards profits can not be sacrificed for top line dreaming.

Issue Date: 11 May 2015