Shares in XLMedia (XLM) climbed by a tenth on the day the digital advertising specialist reported a significant uplift in first-half revenues and pre-tax profits (see table). While this was partly driven by acquisitions, both the publishing and media divisions saw double-digit organic sales growth. And the purchase of Securethoughts.com represented a first step into the fast-growing cyber security market.
Within publishing, revenues rose 40 per cent, with organic growth of 32 per cent – and management has further acquisitions planned. In the media segment, sales rose by 40 per cent, 12 percentage points of which was organically generated. Most of this growth was led by Clicksmob, the mobile marketing platform acquired in February. It specialises in acquiring customers for e-commerce, travel, entertainment and finance apps, and gives XLMedia greater exposure to the Asian market.
After the period-end, the company announced its acquisition of Moneyunder30.com, a US-focused price comparison website, for $7m (£5.4m), accelerating its move into financial services. Meanwhile, XLMedia began operating in Romania after receiving a licence from authorities there to act as an online gambling affiliate.
Overall operating expenses increased by 43 per cent to $16.0m, mostly staff-related and due to an increase in research and development costs. As a result, the operating margin fell from 30.8 per cent to 28.2 per cent.
Analysts at Berenberg forecast full-year pre-tax profits of $35m and EPS of 13.9¢, up from $31m and 12.0¢ in 2016.
| XLMEDIA (XLM) | ||||
| ORD PRICE: | 140p | MARKET VALUE: | £285m | |
| TOUCH: | 139-140p | 12-MONTH HIGH: | 142p | LOW: 84p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 54p* | NET CASH: | $43m† | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 51.2 | 15.8 | 6.5 | 3.82 |
| 2017 | 67.9 | 19.5 | 7.0 | 4.02 |
| % change | +33 | +23 | +8 | +5 |
| Ex-div: | 21 Sep | |||
| Payment: | 13 Oct | |||
| *Includes intangible assets of $75m, or 37¢ a share †Includes short-term investments of $3.2m£1 = $1.32 | ||||
