Mirriad Advertising PLC (AIM:MIRI, OTCQX:MMDDF) said today that it expects to generate £2mln of revenue in 2022, in line with last year, as it refocuses spending away from the Chinese market.
The digital advertising company plans to double down on the US market, where turnover grew 57% in the first half of the year, and away from China following the country's stringent Covid-19 lockdowns.
"Mirriad is extending its lead in the in-content advertising market with an augmented focus and position in North America," said Stephan Beringer, chief executive of Mirriad.
“We are at the forefront of the industry, with steadily rising adoption and ever-growing evidence that our format delivers better results for advertisers and new revenue streams to content owners.”
Mirriad estimates the move will deliver approximately £1mln in annual cost savings after its board took the decision that it was no longer prudent to budget for a “strong bounce-back in China”.
The advertiser has guided for approximately £2mln of sales for the year as a whole, in line with the £2mln of revenue that it posted for 2021 in its audited yearly accounts.
In the first half of the year, it grew US revenue, which now accounts for 72% of total turnover, by 57% to £418,000, it said in a trading update today.
In May, it signed a contract with Los Angeles-based sell-side ad platform Magnite to bring automation to in-content advertising and began a campaign to roll out its dynamic insertion advertising with a “leading global food and beverage company in the US”.
Global turnover was £577,000 in the first half, down from £1.14mln in the same period of last year, but Mirriad said it expects higher revenues in the second half of the year.
Beringer said the company is “seeing a clear in-content interest surge” and that it expects revenue to be “backloaded towards the end of the year”. Last year, for example, 70% of its revenues from the US market were recorded in the second half of the year.
Mirriad will wind down its Chinese operations by March 2023, when its existing contract with Tencent Holdings (HKG:0700, OTC:TCEHY) ends, due to “weaker than expected market conditions in China”.
This is part of a cost-control programme to deliver £2.5mln of annual savings much of which it said will be achieved next year.
The company said it had £17.7mln of cash at the end of June and expects year-end cash to be better than market expectations partly due to lower than budgeted bonus provisions.