Investors must be feeling a sense of deja vu as Bango (BGO:AIM) once again comes cap in hand to the market for more cash. It's another £6 million that the 'one-click' app store payments specialist wants this time round, roughly split two-thirds, one-third via an institutional placing, and a open offer to all existing shareholders. At least private investors are not being ignored as they often are.

The cash call is 'building on a period of sustained strong operational progress which has resulted in acceleration in end user spend, as outlined in the recent interim results statement,' says chief executive officer (CEO) Ray Anderson.

'It enables Bango to maintain the independence of its platform, and allows Bango to capitalise on the pipeline of existing and future strategic relationships to their full potential whilst maintaining high levels of technological innovation and customer service.'

BANGO - Comparison Line Chart (Rebased to first)

That the announcement was not made alongside interim results of less than a week ago (24 Sep) perhaps implies that convincing City bankers and fund managers to back another fund raise was not so easy. Of course, the modest 4% discount may suggest otherwise.

Those half-year results showed some progress (end user spend looks to be heading for £29 million this year) offset by flimsy 2% to 3% gross margins. That means revenues will have to growth many times current levels before the company is able to chalk up meaningful profits. Net cash was revealed at £2.65 million, having chomped it way through a roughly similar amount since January.

Bango dashboard

'Underlying revenue outlook looks good, with Bango benefiting from its long and expanding list of App Stores and mobile network operators (MNO) agreements,' says Peter Roe, analyst at IT website TechMarketViews. 'Gross margins appear stable, albeit at a low level, and so it comes down to a matter of waiting for the volumes to grow and the bottom line to benefit.'

The term 'jam tomorrow' inevitably springs to mind, as it has done since Bango's 2005 IPO. Since then the company has come cap in hand to investors half-a-dozen times for a total of a little more than £25.5 million, according to my calculations. As Philip Carse, analyst at IT consultancy Megabuyte points out, 'this latest funding at 96p, is at the second lowest price since the IPO, beaten only by the December 2009 raise at 43p.' Carse adds that 'we would not bet against the company asking for more money in the next 12 to 24 months.'

Issue Date: 29 Sep 2014