XLMedia PLC (LON:XLM) said it has made a solid start to 2021 and expects to continue profitable revenue growth and cost reductions to rebuild profit margins in the medium term.
So far this year, the digital performance publisher said it is seeing good performances in the Personal Finance and European Sport verticals.
“This, alongside our recent acquisitions in US Sports vertical, continues to partially offset the ongoing weakness across our European Casino assets,” said chief executive Stuart Simms in a statement published ahead of the company’s annual shareholder meeting.
Given the robust performance and the increased revenue visibility of the business so far this year, he said revenues for the full year are expected to come in between US$65mln and US$70mln, up from US$54.8mln last year.
Simms said the integration of the US sports assets is progressing well and is expected to add “materially” to revenues for the current financial year and beyond.
However, as disclosed in January, casino revenues are expected to decline further in 2021 and so the company will continue to adjust the cost base accordingly as it looks to further stabilise the vertical, while the decline should also be partially offset by the improving performance of the European Sport and North American Personal Finance verticals.
“As outlined in our 2020 full-year results published in April, we continue to invest in the ongoing transformation of the business, including the systems and technology that underpin performance, to build an infrastructure platform which will support the anticipated growth in future years,” said Simms.
“This investment, and the additional operating costs associated with the recent acquisitions, will hold back profit progression in the current year.
“In the medium term, the company expects to deliver year-on-year profitable revenue growth and to leverage the infrastructure investment to reduce ongoing operating costs, leading to a gradual return to the operating margin levels last experienced in 2019.”