Marketers abandoned display advertising en masse in the first half of 2016, but hefty investments in mobile, video and automated ad technology tempered the impact on Matomy Media (MTMY). Still, the costs of enacting the new strategy pushed adjusted cash profits down 41 per cent to $5.8m (£4.5m).
Technology improvements fuelled strong demand for both mobile in-app and video advertising, sending revenues from each up 144 per cent and 95 per cent respectively. Matomy generated 38 per cent of its sales from mobile-related offerings, up from 28 per cent a year earlier, and more than three-quarters of its revenues stemmed from automated advertising. And although the display division's sales slumped 70 per cent, it accounted for just 9 per cent of group turnover.
Matomy has also benefited from past acquisitions, including mobile in-app outfit MobFox and video specialist Optiomatic. It also rolled out a self-serve advertising platform for media buyers, and opened offices in China and South Korea to establish a foothold in the Asia Pacific region. Broker Canaccord Genuity expects adjusted pre-tax profits of $14m, giving EPS of 10.1¢, rallying to $18.5m and 13.7¢ in 2017 as display sales become negligible ($22.3m and 20.3¢ in 2015).
| MATOMY MEDIA (MTMY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 110p | MARKET VALUE: | £103m | |
| TOUCH: | 108-110p | 12-MONTH HIGH: | 122p | LOW: 64p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 111¢* | NET CASH: | $9m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 125 | 2.5 | 1.0 | nil |
| 2016 | 124 | -5.1 | -6.0 | nil |
| % change | - | - | - | - |
*Includes intangible assets of $144m, or 153¢ a share £1=$1.30 | ||||
