Tremor issues profit warning

Tremor, which is the result of an April merger between the companies formerly-known as Taptica (renamed Tremor in June) and RhythmOne, cited “continuing weakness” in its performance advertising arm. Performance revenues, which made up 29 per cent of overall turnover, fell 41 per cent from $72.1m (£57.8m) at last year’s midway point to $42.3m, although RhythmOne’s estimated second-quarter contribution of around $50m helped to offset performance’s woes.

While measures are being taken to stabilise the high-margin performance wing, management is taking steps to reduce the overall business’s exposure to performance advertising, and is focusing the group on video and branding. It is also imposing “stringent accounting policies” to RhythmOne - this, combined with performance’s troubles, will see the group fail to match full-year 2019 expectations for profitability, according to the company. 

The group is also having to deal with litigation brought by Uber (US:UBER) against Taptica in June in relation to the promotion of the taxi platform’s mobile app. Taptica had been retained by advertising agency Fetch Media to promote the app – Tremor says that revenues here are immaterial, and it considers Uber’s claims to be without merit.

House broker FinnCap lowered its forecasts, and now expects full-year 2019 pre-tax profits and earnings per share of $52.6m and 42.2¢, respectively, which it expects to rise to $69.3m and 49.1¢ in 2020.