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RhythmOne expands its footprint

The digital advertising specialist is broadening its commercial offering
June 15, 2018

When we covered RhythmOne’s (RTHM) half-year figures in December, we highlighted the importance of RhythmMax, its programmatic platform, designed for the marketing of digital advertising in real time. Two months later, the group announced a $163m (£122m) deal to acquire California-based YuMe Inc. That's accelerated its digital strategy, providing access to a data-driven platform with premium video/TV inventory, and cross-screen targeting technology.

IC TIP: Hold at 220p

The deal has enhanced its ability to exploit the trend among consumers to access media across diverse devices and formats, while deepening its footprint in a rapidly expanding addressable market. Market projections from eMarketer show spending of $46.6bn in programmatic digital display through 2018, accounting for four out of every five dollars of digital spend in the US.

Naturally, the deals have had a bearing on full-year figures, but it’s worth noting that historical on-platform revenue grew 14 per cent. Reported earnings were constricted by $16.2m in exceptional items, the bulk of which related to the acquisitions, although the cost of revenue fell proportionately. 

RHYTHMONE (RTHM)   
ORD PRICE:220pMARKET VALUE:£171m
TOUCH:220-222p12-MONTH HIGH:448pLOW: 157p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:361ȼ*NET CASH:$27m**
Year to 31 MarTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (ȼ)
201424717.63.2nil
2015215-24.8-5.2nil
2016116-77.2-22.9nil
2017149-14.9-33.2nil
2018255-22.9-25.6nil
% change+71---
Ex-div:-   
Payment:-   

£1=$1.33 *Includes intangible assets of $210m, or 270ȼ a share

**Includes $43m of restricted cash