TIDMXLM
RNS Number : 3281H
XLMedia PLC
27 July 2023
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain .
27 July 2023
XLMedia PLC
("XLMedia" or the "Group" or the "Company")
Trading Update
&
Notice of Results
Significant progress on delivering strategy
XLMedia (AIM: XLM), a leading global digital performance
publisher, today provides the following trading update for the six
months ended 30 June 2023 ("H1 2023").
In H1 2023, total revenues were approximately US$29.4 million
(H1 2022: US$44.5 million) and total Adjusted EBITDA was
approximately US$6.5 million (H1 2022: US$10.6 million). Adjusted
EBITDA for the full year remains in line with management's
expectations after adjustment for the sale of the three European
Casino Assets announced on 12 July 2023.
As previously reported, the Group's period-on-period performance
reflects the timing, number and scale of new state launches in the
United States ("US"). In particular, operator marketing activity
around the launch of New York (the fourth most populated state) in
January 2022, was not repeated at the same level with the launch in
January 2023 of online sports betting in Ohio (the seventh most
populated state).
In contrast, the Group has delivered new growth across the core
assets in Europe in both Gaming and Sport, whilst also reducing
cost and simplifying the organisation structure, including reducing
the Group's overall headcount by 14% during the period.
Strategy Update
Momentum is building in line with our stated strategy of
diversifying revenues and expanding the Group's footprint. Key
highlights include:
-- Revenue share deals have been signed with bet365 and Betway
in the US enabling the Group to participate in betting revenues
generated by these operators.
-- To further diversify revenues:
o Daily Fantasy Sports ("DFS") game promotions and offers are
live on the portfolio's sports media sites and we expect audience
adoption to grow rapidly once the new NFL season starts.
o New display media advertising and sponsorship packages have
been launched for the 2023 American football season (for both NFL
and NCAA).
-- The successful partnership with Schneps Media has been
re-signed extending amNY for a further three years.
-- Increased US Gaming casino traffic by 124% (H1 2023) in three
key states growing non-seasonal revenues.
-- HoneyMonkeyPineapple will launch imminently as our premium
Gaming site in the US offering a fun place for customers to find
new casino games.
-- In Europe, Freebets.com has been launched in Ireland
accessing the horse racing market there, and in readiness for new
the Premiership football season.
-- We have launched our Dynamic Offer Engine, a proprietary ad
serving technology, enabling us to automate and optimise conversion
rates from new sports betting promotions and offers while using new
AI tools to enhance content creation.
-- We have exited non-core activities including the sale of the
loss-making Personal Finance business, Reef Media and Blueclaw
which contributed US$0.6 million revenue (H1 2022: US$2.1
million).
-- The sale of three of the Group's European Gaming domains and
associated websites, Casino.se, Casino.gr, and Casino.pt was
completed for a total upfront cash consideration of US $4.0 million
in July 2023, representing a 4.7 times multiple on revenue.
-- Preparations for Kentucky state launch of online sports
betting (28 September 2023) are underway, and the Group is focused
on capitalising on its substantial southeast footprint, with North
Carolina expected to launch in Q1 2024.
In summary, the Group has launched into new markets, developed
new brands, diversified revenue streams, expanded Sports and
Gaming, signed new partnership agreements, and refocused on its
core activities. XLMedia is ready for new state launches when they
come.
Sports
The launch of online sports betting in Ohio provided a strong
start to the year coupled with the growing revenues from
Freebets.com, our premium Europe/UK sports betting site, resulted
in revenue of approximately US$21.4 million (H1 2022: US$34.0
million) in the Group's Sports vertical.
Our EU Sports operations contributed approximately US$5.2
million (H1 2022: US$3.8 million) with notable highlights around
the performance from Freebets.com. Real Money Players ("RMPs") grew
in H1 2023 by 36% period-on-period and revenue grew in by 50%
period-on-period resulting from a strong Cheltenham Festival, the
Grand National meeting at Aintree, Royal Ascot and a good end to
the English Premier League football season.
North America saw several operators limit their marketing spend,
reducing customer acquisition activity around the Superbowl and the
offseason, as they reviewed marketing tactics in the evolving US
market. Together, the Massachusetts and Ohio launches did not reach
the same scale as New York's launch did in 2022. North America
Sports revenues were US$16.2 million (H1 2021: US$30.2
million).
The delay in confirmation of the regulatory regime around the
Massachusetts launch, combined with the launch occurring after the
NFL season had ended resulted in a more muted initial revenue
spike. However, the upcoming NFL season presents a second
opportunity to launch sports betting in Massachusetts.
With the highly anticipated Kentucky launch in September 2023
expanding our operations to 20 states, our North American Sports
business continues to be driven by the Group's high-quality
content, offering audiences both national and local sports coverage
and sports betting content that builds engagement and trust to
connect sports fans with operators when promotions are available.
Additionally, the XLMedia teams continue to deliver exclusive
sports betting content for media partners that offers targeted,
relevant and engaging information for sports fans in those markets
where it is permitted.
Gaming
The Group's Gaming vertical as a whole generated revenue of
US$7.4 million (H1 2022: US$8.4 million). The trading performance
of the three sold EU gaming assets is included in the results up to
the point of sale.
Following its restructuring in 2022, the Group's European Gaming
vertical (casino and bingo) is trading marginally ahead of
management expectations, generating revenue of US$7.0 million (H1
2022: US$8.0 million). RMPs grew 9% year-on-year in the period as
the rebuilding of the gaming business continued while creating
future tail revenues. In the short-term, the decline in historical
tail revenues continues to impact period-on-period growth, however
the business expects to return to overall growth over time.
-- WhichBingo grew revenue in H1 2023 by 38% period-on-period
and grew RMPs by 28% period-on-period. H1 2023 was the strongest
performing half year ever.
-- Nettikasinot grew revenue in H1 2023 by 5% period-on-period
and grew RMPs 16% period-on-period.
North American Gaming revenues in H1 2023 were US$0.4 million
(H1 2022: US$0.4 million). During the period, we rebuilt the casino
offering across the owned and operated portfolio, extending the
offering to a number of partner sites. This increase in operational
activity will culminate in the launch of HoneyMonkeyPineapple, a
premium branded gaming site serving the North American market.
Disposals
In December 2022, the Group announced the intention to sell the
loss-making Personal Finance business, announcing the completion of
the sale of these assets in H1 2023 for a total cash consideration
of US$2.05 million. Revenues for the Personal Finance business in
the period prior to sale were US$0.5 million (H1 2022: US$0.8
million) at a US$0.3 million loss.
Post period end, on 12 July 2023, we announced the disposal of
three of the Group's European Gaming domains and associated
websites, Casino.se, Casino.gr and Casino.pt, for a total upfront
cash consideration of US$4.0 million, representing a 4.7 times
multiple on revenue. The Group will continue to operate its Gaming
business in the Swedish and other European markets and has launched
Kasino.se, a new site focused on the Swedish market.
These sales generated gross sale proceeds of approximately
US$6.0 million and provides the Group with additional working
capital and funds further investment to drive the expansion of the
North American Sports and Gaming footprint and advance its EU
portfolio.
Cash
Cash balances (including short-term deposits) at the end of June
2023 were approximately US$7.4 million (FY 2022: US$10.8 million,
H1 2022: US$17.7 million) with the subsequent proceeds of the sale
of the three gaming assets in July 2023 increasing the balance by
approximately US$4.0 million.
The Group's acquisition program between Q4 2020 and 2021
resulted in it committing to future acquisition and earn out
payments as part of the acquisition consideration, to be
substantially funded from the Group's free cashflow. During the
period, the Group made earnout payments of US$3.4 million (H1 2022:
US$3.0 million). The Group did not pay any deferred acquisition
payments in the period (H1 2022: US$10.0 million) but expects to
pay a further deferred acquisition payment of US$4.0 million in H2
2023.
The Group also made tax payments relating to settlements of
historical agreements with local tax authorities of US$2.1 million
and paid US$0.7 million to tax authorities in the jurisdictions it
operates in during the period.
Board Changes
In March 2023, the Board agreed to implement a reduction of 15%
in the level of fees paid to Non-Executive Directors (including the
Chair) with effect from 1 April 2023, as well as streamlining its
panel of advisors and agreeing fee reductions with a number of
them. Additionally, Richard Rosenberg and Jonas Mårtensson both
indicated their intention to step down as Directors of the Group
and have ensured a smooth transition of their responsibilities. Mr.
Mårtensson stepped down from the Board at the end of June while Mr.
Rosenberg will remain on the Board until the end of September 2023
both having successfully served the Company for many years.
Notice of H1 Results
XLMedia expects to report unaudited interim results for the six
months ending 30 June 2023, in the week commencing 25 September
2023. The Group will hold a webcast for shareholders and will
provide details of the facility nearer the time.
For further information, please contact:
XLMedia plc
David King, Chief Executive Officer ir@xlmedia.com
Caroline Ackroyd, Chief Financial Officer via Vigo Consulting
www.xlmedia.com
Vigo Consulting Tel: 020 7390 0233
Jeremy Garcia / Fiona Hetherington /
Kendall Hill
www.vigoconsulting.com
Cenkos Securities plc (Nomad and Broker) Tel: 020 7397 8900
Giles Balleny / Max Gould
www.cenkos.com
About XLMedia:
XLMedia (AIM: XLM) is a leading global digital media company
that creates compelling content for highly engaged audiences and
connects them to relevant advertisers.
The Group manages a portfolio of premium brands with a primary
emphasis on Sports and Gaming in regulated markets. XLMedia brands
are designed to reach passionate people with the right content at
the right time.
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END
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