"Challenging year" leads to profit and revenue decreases for XLMedia

XLMedia saw revenues, gross profit and EBITDA decline for the year ended 31 December 2018, with the digital marketing performance provider attributing this to ‘operational challenges’.
Revenues decreased 14.4% to $117.9 million (2017: $137.6 million), impacted by operational challenges in 2018, with a proactive shift to higher margin activities and sustainable revenue growth going forward. Publishing revenues grew 4.6%, while media revenues decreased 29% and ‘other revenues’ decreased 41%.
Gross profit also saw a decrease, down 7.1% to $67.9 million (2017: $73.1 million), but there was improved gross profit in H2 2018 versus H1 2018, with gross profit up 2.7% to $34.4 million.
Adjusted EBITDA decreased 6.9% to $43.9 million (2017: $47.1 million), while there was an improvement in H2 2018 versus H1 2018 – up 9.8% to $23 million, with a greater proportion of revenues generated from higher margin publishing activity.
The business continues to recover from the ‘adverse impact of gambling regulation uncertainty in specific territories, website ranking issues impacted by spamming and other attacks on key publishing assets’, which impacted performance in 2018.
Meanwhile, the group’s nascent personal finance business continues to grow and has increased its presence in the North American markets, with 6% of overall revenues now derived from this vertical (2017: 2%).
The firm’s CEO Ory Weihs commented: “2018 has been a challenging year but our business is built on strong foundations giving us the confidence to cease low margin activities and concentrate on the higher margin Publishing division, returning the business to growth.
“Looking ahead, the Group will be prioritising internal investment across its publishing activity to further build its asset base organically, in particular, in the North American gambling and personal finance verticals. Whist we continue to assess strategic acquisition opportunities, we anticipate the bulk of our mid to long-term asset growth to come from organic asset development.
“Our focus remains firmly on improving operational excellence and further developing assets organically to maximise shareholder value.”

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