Digital performance publisher XLMedia has cited continued progress in its efforts to transform the business in its H1 results for the six months ended 30 June 2021. It warned, however, that full-year revenue could be impacted by the cost of executing those changes.
Updating investors, the firm noted gains in revenue, gross profit and adjusted EBITDA, although there was a reported loss before tax of $0.4m versus a profit of $0.2m year-on-year.
Looking in more detail at those key metrics, XLMedia reported revenues of $32.2m (H1 2020: $27.7m) and a gross profit of $18.3m (H1 2020: $16.6m). Adjusted EBITDA came in at $6.6m (H1 2020: $5.1m).
The company further noted cash and short-term investments of $36.9m (31 December 2020: $13.9m) and H1 recorded transformation costs of $1m following the continuation of the group’s restructuring plan (H1 2020: $1.5m)
CEO Stuart Simms commented: “We continued to make further organizational progress in the first six months of the year, as we expanded our portfolio of high-quality branded sites, whilst also laying the foundations to improve the use of our first party data.
“The combined positive impact resulted in a strengthened US Sports division, increase of regulated market and new money revenue, as well as the development of a significantly improved data architecture and infrastructure to serve the group’s long-term ambitions.
“The equity raise proved to be a pivotal point in my tenure, having weathered the storm of the first 18 months, we could finally accelerate and execute plans to realise the ambition I set out when joining the business. Namely to build a platform (data, technology and operations) which powers a portfolio of branded assets operating across a number of verticals, offering an enhanced, content-rich consumer experience and improved advertiser performance.
“To achieve this ambition, during 2021, I have challenged the business to accelerate the acquisition of new assets, reorganise and re-build our capability and to develop a new data and technology platform. I am proud of the team and our achievements, and have confidence that the necessary changes will result in improved focus, productivity and growth in H2 2022 and beyond.”
On the outlook, the company has maintained guidance of revenue for full year 2021 of between $65m and $70m. It cautioned, however, that the impact of transformational activities (including M&A and fundraising) is likely to suppress operating profit across FY 2021 and FY 2022.
The firm does expect to see continued improved productivity across business units as it enters H2 2021, supported by US sports and a reinvigorated casino business. But as Covid-19 restrictions ease, it is accelerating organisational changes and will incur more costs in FY 2021 than previously budgeted.
It concluded: “Across the medium term, the group expects to benefit from more diverse revenue streams, with a focus on new money growth, greater operational efficiency and a built-for-purpose platform and data architecture, positioning XLMedia well for operational and financial progress.”