Fierce competition for gamers and gamblers fuelled strong first-half growth at XLMedia (XLM), which uses digital advertising, informational websites and marketing partners to funnel internet users to websites in exchange for a cut of the proceeds. Record revenues drove adjusted cash profits up 37 per cent to $17.7m (£13.6m) in the reported period.
Sales surged 48 per cent in the lucrative publishing business as the group fine-tuned its websites using its Palcon management platform. They also leapt 39 per cent in the media division, although management warned that weaker demand from a few customers could weigh on second-half growth. And although the partner network division grew revenues by 16 per cent, an ongoing review of members and the introduction of stricter criteria could temper short-term progress.
XLMedia established a US subsidiary to strengthen its ties to clients across the pond, bolster its presence in the fast-growing mobile app market and diversify the company away from gambling, which generated 71 per cent of revenues in the period.
Broker Liberum expects adjusted pre-tax profits of $30.1m for the full year, giving EPS of 11.9¢, up from $26.4m and 10.6¢ in 2015.
XLMEDIA (XLM) | ||||
---|---|---|---|---|
ORD PRICE: | 89.5p | MARKET VALUE: | £179m | |
TOUCH: | 89-90p | 12-MONTH HIGH: | 98p | LOW: 59p |
DIVIDEND YIELD: | 5.4% | PE RATIO: | 11 | |
NET ASSET VALUE: | 48¢* | NET CASH: | $42.9m† |
Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2015 | 36.8 | 13.2 | 5.8 | 2.60 |
2016 | 51.2 | 15.8 | 6.5 | 3.82 |
% change | +39 | +20 | +12 | +47 |
Ex-div: 6 Oct Payment: 4 Nov *Includes intangible assets of $57.6m, or 29¢ a share †Includes short-term investments of $20.2m £1=$1.30 |