Interim results from LadBible owner LBG Media PLC (AIM:LBG) were praised by analysts on Wednesday, who said the growth in its global audience shows why its content "resonates" with its core young adult audience and attracts ever more brand partners.
Berenberg hiked its share price target to 170p from 140p off the back of the numbers, which showed organic revenue growth of 29%, the strongest first half since the company listed in 2021, with 190% organic growth of underlying earnings.
As revenue and EBITDA growth were already known since a July trading update, Berenberg analyst Ciarán Donnelly said the key new information in the results was the increase in the revenue contribution from its web programmatic business, now accounting for 45% of indirect revenue and supporting increasing advertising yields to help LBG reduce its dependency on Facebook.
Shore Capital analyst Roddy Davidson noted that direct revenues accounted for over 50% of group total for the first time, growing by 92% on last year, with indirect revenue growth was "a still very pleasing 28%".
Davidson pointed out that the group’s indirect global audience grew 20% to 494 million, including a reach of 141 million in the US, where operations were consolidated into Betches’ HQ and sales teams reorganised to encourage cross-selling and drive growth.
Berenberg's Donnelly said US expansion "remains a key lever for growth over the medium term" following the Betches acquisition last year.
He said the growth in profitability demonstrated operating leverage in the company.
With management reiterating the calendar-year outlook and changing the year-end to September, Donnelly noted that the previous two financial years averaged an 86% weighting of adjusted-EBITDA to the second half.
"This means that LBG’s biggest quarter will now fall in Q1, which will in theory enable management to guide for the year ahead more accurately. There should be relatively more confidence in this outlook statement and the expected in-line performance following the H124 performance," he said, highlighting that that the weighting is going to be considerably lower relative to previous years.