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Takeover target Audioboom’s roaring first half

Revenues almost doubled in the six months ended in June
July 21, 2021
  • Podcast company posted significant top-line growth 
  • Pre-tax losses narrowed as business edges closer toward profitability

Audioboom (BOOM) reported a maiden adjusted cash profit of $0.2m this week, days after asset manager All Active Asset (‘AAA’) Capital announced that it was in talks to take the podcast company private.

AAA approached Audioboom’s board about a possible offer last Friday, which would see it acquire 26.4 per cent of its issued share capital. The bid, if it were made, would value Audioboom at 1,200p per share. That represents a premium of 36 per cent, based on the company’s closing price on the last business day before talks were disclosed. 

While AAA described “constructive discussions”, Audioboom said on Monday that it had not engaged in "any material dialogue” regarding the possible offer. So far the shares have not risen above AAA's proposed price, which suggests that the market does not expect a competing bid to emerge. But a promising set of interim results released on Tuesday make Audioboom look all the more enticing. 

The company makes most of its sales through advertising on third-party and original podcast shows. And even as the audio streaming industry boomed over the past year, management reported that its revenue growth rate had outperformed the wider US podcast advertising market by 55 per cent. 

The group also hinted at a sharper focus on its own-IP, having launched its own production team in the UK. That should help Audioboom build its own moat, as well as avoid typically unfavourable revenue splits with third-party content creators. It looks like management has a robust vision for the business - and AAA Capital has recognised its capacity for growth. Await documents. 

Last IC view: na

AUDIOBOOM (BOOM)   
ORD PRICE:930pMARKET VALUE:£ 146m
TOUCH:920-940p12-MONTH HIGH:1,033pLOW: 145p
DIVIDEND YIELD:NILPE RATIO:NA
NET ASSET VALUE:39¢NET CASH:$1m
Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
202011.8-2.00-14.0nil
202122.8-0.46-3.00nil
% change+93---
Ex-div:na   
Payment:na