Monstermob sends warning

A CUT-THROAT market in polyphonic ringtones, java games and smutty wallpaper for downloading on to mobile phones forced Monstermob to warn today that this year's profits will not hit expectations. The shares nosedived 36p or 24% to their lifetime low of 114 1/2p.

The shares were floated at 135p last November and rushed up to a peak of 190p. Electrical giant Dixons paid 165p a share for a 1.3% stake in February and has an option to raise that to 9% at the same price.

Chief executive Martin Higginson said the group has had to double its monthly marketing spend from £250,000 to £500,000 in a bid to build up subscribers. It had 120,000 at the end of last year and has grown that to 220,000.

Higginson warned that the company had a lot of competitors and claimed that many were appearing to sell cheap one-off downloads but were actually forcing people into subscriptions.

Monstermob, chaired by former Tory Cabinet minister Lord Baker, is to write off the £650,000 cost of developing three new services. Brokers were expected to slash their forecasts for currentyear pre-tax profits from around £3.8m to about £2.6. The group made £1.5m last year.