XLMedia PLC PLC (LON:XLM) said its business performed relatively well in 2020 and expects to see a big improvement in revenues this year.
The digital marketing group, which uses proprietary tools and methodologies to generate high-value users for customers in return for performance-based payment models, said revenues fell to US$54.8mln in 2020 from US$79.7mln in 2019. It blamed a Google search ranking penalty in January and an estimated US$2mln a month hit from March onwards as Coronavirus (COVID-19) hit sports events and reduced activity in financial services.
Adjusted underlying earnings (EBITDA) contracted to US$12.2mln from US$33.5mln in 2019 while adjusted profit before tax fell to US$4.5mln from US$25.3mln the year before.
Reported profit before tax was US$1.1mln versus a loss in 2019 of US$57.7mln.
Cash and short-term investments stood at US$13.9mln at the end of the year, compared to US$29.9mln at the end of 2019.
The company said it is regaining its equilibrium with revenue in January 2021 almost at the same level as a year earlier, and the board continues to expect a material improvement in revenues this year.
"We entered 2020 with strategic and operational clarity, only to find ourselves knocked off track in the short term by the unforeseen challenges of a Google penalty and the Covid-19 global pandemic. Even against this backdrop the business performed relatively well, and we made significant progress on the priorities of upgrading the asset portfolio and restructuring the organisation, which will drive performance over the longer term,” said Stuart Simms, the chief executive officer of XLMedia.
"Over the last few months, the company completed two significant acquisitions in the US Sports market. This is a very positive and material step in rebalancing the group, providing immediate scale in an attractive and high-growth, regulated market.
"Completing the transformation of the business, including the overhaul of the systems supporting it and delivering the long-term operating structure to maximise growth will involve further significant investment in 2021. Notwithstanding this, our level of confidence in the business performance and recovery continues to grow and we have entered 2021 with positive momentum, which we expect to lead to revenue materially ahead of the previous year,” he added.