Mon 24 Sep 2018 07:16 by ukcitymedia.co.uk about : trading updates - 1 Comments - 3401 words
XLMedia (AIM: XLM), a leading provider of digital performance marketing services, announces its unaudited interim results for the six months ended 30 June 2018.
· Revenues of $59.1 million (H1 2017: $67.9 million)
· Gross profit of $33.5 million (H1 2017: $35.2 million)
· Adjusted EBITDA of $20.9 million (H1 2017: $22.8 million)
· Profit before tax of $16.8 million (H1 2017: $19.5 million)
· Interim dividend of $6.5 million or 3.0040 cents per share (H1 2017: 4.0226 cents per share); and
· Strong balance sheet with $51.3 million of cash and short-term investments to be deployed in further acquisitions for future growth
· On track to meet profit expectations for the full year
· Completed a series of acquisitions in the period totalling $45.8 million, including:
o Leading Finnish gambling related informational websites for $18.0 million
o WhichBingo.co.uk, one of the leading online informational portals and comparison sites for online bingo games in the UK for $10.5 million
o Three US personal finance informational websites for $5.9 million
o Shortly after period end, acquired Investorjunkie.com a leading US personal finance website for $5.8 million
· Solid performance from our Personal Finance assets, growing both in asset base and amount of clients.
· Preparation for launch into the significant future potential US gambling market
· Enhanced the Group's Asia-Pacific presence in the mobile apps vertical and increased revenues from new clients in the region
· Management have worked hard to mitigate previously reported regulatory headwinds and operating challenges and remain on track to deliver the year end market consensus profit number
Ory Weihs, Chief Executive Officer of XLMedia, commented:
"The Group produced a solid profit performance in the first half, albeit against a backdrop of regulatory pressures and challenging market conditions in the online gambling sector. However, we are now seeing positive signals and expect to meet profit expectations for the full year.
"Since the beginning of this year we have been focusing on implementing our strategy and executing acquisitions in order to accelerate growth, allocating over $45 million of capital for acquisitions. Our newly acquired assets perform as expected and we are confident they will deliver a strong return.
A webcast of our results presentation will be available on our website later today: https://www.xlmedia.com/investor-relations/webcasts/
XLMedia will be holding a presentation for private and retail investors at 4.00pm on Tuesday 25 September 2018. To register for the event, please contact Vigo Communications on firstname.lastname@example.org.
For further information, please contact:
Via Vigo Communications
Jeremy Garcia / Fiona Henson / Kate Rogucheva
Tel: 020 7390 0230
Cenkos Securities plc (Nomad and Joint Broker)
Mark Connelly / Callum Davidson
Tel: 020 7397 8900
Berenberg (Joint Broker)
Chris Bowman / Mark Whitmore
Tel: 020 3207 7800
The Group delivered a solid performance in H1 despite experiencing disruption in some regions in which we operate, in addition to discontinuing a number of underperforming activities. As a consequence, revenues for the six months ended 30 June 2018 were $59.1 million compared to $67.9 million in H1 2017.
Regulatory developments in the online gambling sector had an impact on our performance in the first six months of the year, including: the closure of the Australian online casino market at the end of 2017; uncertainty regarding the regulatory status of certain European markets, specifically Germany, where some operators suspended activity while others lowered marketing spend pending clearer guidelines; as well as changes to gambling advertising regulations in the UK.
At the beginning of H1 2018 we saw some decline in marketing campaigns in the UK in order to adjust to the implementation of new, more stringent UK gambling advertising guidelines.
Whilst these developments affected our performance, we believe this should lead to a clearer and more functional environment, and to long-term stability in the market and higher quality earnings for the Company.
EU GDPR regulation, which became effective in May 2018, is also applicable across a number of our territories. In preparation for this regulation and to ensure our compliance we have conducted a comprehensive preparatory compliance program. The program included mapping and evaluating our information gathering practices in all business segments and processes and an adjustment of our practices as required. We have implemented internal guidelines, policies and practices and are closely monitoring market developments on an ongoing basis to ensure our continued compliance with the regulation. The Group does not expect GDPR to have a material effect on performance.
We continued to execute on our strategy and, during the period, completed a series of acquisitions for an aggregate consideration of $45.8 million. We continue to evaluate potential assets and targets and expect to accelerate this activity. As with previous acquisitions, our ability to both source and integrate at scale underpins our future aspirations and enables management to further diversify our operations.
The acquisitions we completed during the period were identified from a pipeline of opportunities, following a rigorous internal due diligence process. The Group adopts key criteria in identifying potential targets, including:
· complementary assets, adding diversity in geographies, customers and sectors with specific focus placed on personal finance and regions where gambling is fully regulated;
· active in additional sub-sectors - for example, in our personal finance arsenal of assets - adding complementary customers with potential cross-sales opportunities between these assets. The recently acquired Investorjunkie.com asset increased our customer base in the personal finance investment sub-sector allowing us to cross sell additional products; and
· demonstration of growth potential and benefits of scale for us once migrated onto our Palcon infrastructure and integrated into the Group. Recent Finnish acquisitions are expected to deliver improved profit margins once fully integrated.
We continue our strategy to diversify our revenues both geographically and by sector. In H1 2018 North America generated 19% of revenues (H1 2017: 28%), Scandinavia generated 35% of revenues (H1 2017: 26%), the UK generated 11% (H1 2017: 8%), other European countries generated 17% of revenues (H1 2017: 29%) and Asia generated 7% (H1 2017: 5%).
In terms of sector diversification: gambling accounted for 70% of H1 2018 revenues (H1 2017: 63%) and Mobile Apps accounted for 20% of H1 revenues (H1 2017: 24%). The increase in the proportion of gambling related revenue was mainly due to the Group's decision to discontinue certain lower margin media buying activities.
We believe that we have laid solid foundations and believe the Financial Services sector will be an important growth engine for the Group in the medium term, performing alongside our more traditional end markets.
24/09/18 11 words
Date Broker Recommendation Price Old target price New target price Notes
25 Jul 18 Berenberg Buy 109.00 220.00 225.00 Reiterates
07 Dec 17 Berenberg Buy 109.00 220.00 220.00 Reiterates
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