Ladbrokes and 888.com aren't the only ones who profit from luckless punters. Digital marketer XLMedia (XLM), which funnels players to gambling websites in return for a cut of the operators' winnings, grew its adjusted cash profits by 28 per cent to $17m (£11.5m) last year.
Strong demand sent sales up 27 per cent at the key publishing division, which is home to 2,000-odd websites. Revenues surged to about $21m at the media business - which runs advertising campaigns - as $6m in sales from recently acquired US social marketer EDM supplemented robust organic growth.
Several sizeable acquisitions also helped XLMedia enter new markets and diversify its client base. It now earns 21 per cent of revenues in the US, up from 1 per cent in 2013. And its largest customer accounts for 11 per cent of revenues, down from a quarter in 2013.
XLMedia invested nearly $38m as it acquired EDM and splurged on new websites and domains. It also bolstered its ranks and upgraded its systems, sending operating costs up 54 per cent to $13m. Management is planning further platform investments this year.
Broker Cenkos expects EPS of 9¢ this year (from 6.4¢ in 2014). It also forecasts a dividend per share of 4.2¢, giving a 4.1 per cent yield at the current share price.
| XLMEDIA (XLM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 69p | MARKET VALUE: | £138m | |
| TOUCH: | 68-70p | 12-MONTH HIGH: | 85p | LOW: 34p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 38¢* | NET CASH: | $44.1m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 11.2 | 3.9 | na | na |
| 2011 | 20.9 | 8.4 | na | na |
| 2012 | 26.1 | 13.5 | na | na |
| 2013 | 34.5 | 11.7 | 9.0 | 2.77 |
| 2014† | 50.7 | 13.2 | 6.0 | 3.16 |
| % change | +47 | +14 | -33 | +14 |
Ex-div: 9 Apr Payment: 8 May *Includes intangible assets of $40.3m, or 20¢ a share †XLMedia floated in March 2014 £1=$1.48 | ||||
