RhythmOne (RTHM) seems to have put the worst of its problems behind it. A major restructuring programme has seen the digital advertising specialist dispose of a number of smaller 'non-core' businesses, invest $5m (£3.9m) in mobile, video and programmatic product development, and acquire a rewards platform, Perk. This helped send adjusted cash profits into positive territory in the second half of the financial year. Broker Numis thinks this return to profitability will continue and has forecast adjusted pre-tax profits of $8.7m and adjusted EPS of 1.8ȼ in the year to March 2018, swinging from losses of $4.7m and 1.1ȼ, respectively, in the reported period.
"It feels like we're back," said chief executive Brian Mukherjee. RhythmOne's core products (which will contribute all of the group's ongoing revenues) reported volumes and prices up 87 per cent and 69 per cent, respectively. Management has also cut $12.8m of costs from these continuing operations, which helped narrow net losses to $14m, from $76m in the year to March 2016. The group is no longer burning through cash, which suggests that more acquisitions could be in the pipeline.
RHYTHMONE (RTHM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47p | MARKET VALUE: | £233m | |
| TOUCH: | 47-47.8p | 12-MONTHHIGH: | 50p | LOW: 16p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 37ȼ* | NET CASH: | $75.2m** | |
| Year to 31 Mar | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 198 | 16.7 | 4.8 | nil |
| 2014 | 247 | 17.6 | 3.2 | nil |
| 2015 | 215 | -24.8 | -5.2 | nil |
| 2016 | 116 | -77.2 | -22.9 | nil |
| 2017 | 149 | -14.9 | -4.5 | nil |
| % change | +28 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of $86.5m, or 17ȼ a share **Includes marketable securities of $55.9m £1=$1.29 | ||||
