Brave Bison PLC (LON:BBSN) shares plunged as the social media company warned that it expects full-year results to be “significantly below” market expectations, after new publishing guidelines on Facebook caused some of its largest pages to be de-monetised in April.
The AIM-listed company, which helps brands create videos for social media, said that it expects to post sales of £16mln for the calendar year compared to last year’s £21mln.
This had a knock-on effect on earnings, with the group posting an adjusted loss before interest, tax, depreciation and amortisation of £0.7mln, compared to a £0.8mln profit last year.
In April, Brave Bison warned that profits Facebook’s new content policy had hit profits, no longer allowing advertising on the company’s four largest Facebook pages, VTRND, Bluntly, Supercrafty and Daily Viral Stories. Of these four, only VTRND is still de-monetised.
The company rebranded the other three pages, and advertising began again, but the company warned that “it is taking much longer than expected for the pages that were de-monetised to grow their reach and views, and the costs of complying with the new content policy have adversely impacted expected margins”.
Nevertheless, the group has had over 30% growth in non-Facebook revenues during the year from branded content, YouTube and Snapchat, with Kate Burns, the chief executive officer saying that the company’s previous “over reliance on Facebook” led it to invest in more original production across platforms.
Brave Bison also reviewed its costs, closing its studio facility and restructuring the UK commercial and creative teams.
“These are ultimately positive business decisions as we now own more content IP than ever before,” Burns explained.
Shares dropped 10% to 1.3p in early trading on Friday.