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XLMedia PLC (XLM)

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Monday 24 September, 2018

XLMedia PLC

Interim results

RNS Number : 6302B
XLMedia PLC
24 September 2018
 

For immediate release

24 September 2018

 

 

 

XLMedia PLC

("XLMedia" or the "Group" or the "Company")

 

Interim results for the six months ended 30 June 2018

 

Acquisitions and further diversification set foundations for the future

 

XLMedia (AIM: XLM), a leading provider of digital performance marketing services, announces its unaudited interim results for the six months ended 30 June 2018.

 

Financial highlights

 

·     Revenues of $59.1 million (H1 2017: $67.9 million)

·     Gross profit of $33.5 million (H1 2017: $35.2 million)

·     Adjusted EBITDA of $20.9 million (H1 2017: $22.8 million)

·     Profit before tax of $16.8 million (H1 2017: $19.5 million)

·     Interim dividend of $6.5 million or 3.0040 cents per share (H1 2017: 4.0226 cents per share); and

·     Strong balance sheet with $51.3 million of cash and short-term investments to be deployed in further acquisitions for future growth

·     On track to meet profit expectations for the full year

 

Operating highlights

 

·     Completed a series of acquisitions in the period totalling $45.8 million, including:

Leading Finnish gambling related informational websites for $18.0 million

WhichBingo.co.uk, one of the leading online informational portals and comparison sites for online bingo games in the UK for $10.5 million

Three US personal finance informational websites for $5.9 million

Shortly after period end, acquired Investorjunkie.com a leading US personal finance website for $5.8 million

·     Solid performance from our Personal Finance assets, growing both in asset base and amount of clients.

·     Preparation for launch into the significant future potential US gambling market  

·     Enhanced the Group's Asia-Pacific presence in the mobile apps vertical and increased revenues from new clients in the region

·     Management have worked hard to mitigate previously reported regulatory headwinds and operating challenges and remain on track to deliver the year end market consensus profit number

 

Ory Weihs, Chief Executive Officer of XLMedia, commented:

 

"The Group produced a solid profit performance in the first half, albeit against a backdrop of regulatory pressures and challenging market conditions in the online gambling sector. However, we are now seeing positive signals and expect to meet profit expectations for the full year.

 

"Since the beginning of this year we have been focusing on implementing our strategy and executing acquisitions in order to accelerate growth, allocating over $45 million of capital for acquisitions. Our newly acquired assets perform as expected and we are confident they will deliver a strong return.

 

A webcast of our results presentation will be available on our website later today:  https://www.xlmedia.com/investor-relations/webcasts/

 

 

XLMedia will be holding a presentation for private and retail investors at 4.00pm on Tuesday 25 September 2018. To register for the event, please contact Vigo Communications on [email protected].

 

For further information, please contact:

 

XLMedia plc

Ory Weihs

www.xlmedia.com

 

Via Vigo Communications

Vigo Communications

Jeremy Garcia / Fiona Henson / Kate Rogucheva

www.vigocomms.com

 

Tel: 020 7390 0230

Cenkos Securities plc (Nomad and Joint Broker)

Mark Connelly / Callum Davidson

www.cenkos.com

 

Tel: 020 7397 8900

Berenberg (Joint Broker)

Chris Bowman / Mark Whitmore 

www.berenberg.com

Tel: 020 3207 7800

 

 

 

Business review

 

The Group delivered a solid performance in H1 despite experiencing disruption in some regions in which we operate, in addition to discontinuing a number of underperforming activities. As a consequence, revenues for the six months ended 30 June 2018 were $59.1 million compared to $67.9 million in H1 2017.

 

Regulatory environment

Regulatory developments in the online gambling sector had an impact on our performance in the first six months of the year, including:  the closure of the Australian online casino market at the end of 2017; uncertainty regarding the regulatory status of certain European markets, specifically Germany, where some operators suspended activity while others lowered marketing spend pending clearer guidelines; as well as changes to gambling advertising regulations in the UK.

 

At the beginning of H1 2018 we saw some decline in marketing campaigns in the UK in order to adjust to the implementation of new, more stringent UK gambling advertising guidelines.

 

Whilst these developments affected our performance, we believe this should lead to a clearer and more functional environment, and to long-term stability in the market and higher quality earnings for the Company. 

 

EU GDPR regulation, which became effective in May 2018, is also applicable across a number of our territories. In preparation for this regulation and to ensure our compliance we have conducted a comprehensive preparatory compliance program. The program included mapping and evaluating our information gathering practices in all business segments and processes and an adjustment of our practices as required.  We have implemented internal guidelines, policies and practices and are closely monitoring market developments on an ongoing basis to ensure our continued compliance with the regulation. The Group does not expect GDPR to have a material effect on performance.

 

 

Strategy

 

We continued to execute on our strategy and, during the period, completed a series of acquisitions for an aggregate consideration of $45.8 million. We continue to evaluate potential assets and targets and expect to accelerate this activity.  As with previous acquisitions, our ability to both source and integrate at scale underpins our future aspirations and enables management to further diversify our operations.

 

The acquisitions we completed during the period were identified from a pipeline of opportunities, following a rigorous internal due diligence process. The Group adopts key criteria in identifying potential targets, including:

·     complementary assets, adding diversity in geographies, customers and sectors with specific focus placed on personal finance and regions where gambling is fully regulated;

·     active in additional sub-sectors - for example, in our personal finance arsenal of assets - adding complementary customers with potential cross-sales opportunities between these assets. The recently acquired Investorjunkie.com asset increased our customer base in the personal finance investment sub-sector allowing us to cross sell additional products; and  

·     demonstration of growth potential and benefits of scale for us once migrated onto our Palcon infrastructure and integrated into the Group. Recent Finnish acquisitions are expected to deliver improved profit margins once fully integrated.

 

We continue our strategy to diversify our revenues both geographically and by sector. In H1 2018 North America generated 19% of revenues (H1 2017: 28%), Scandinavia generated 35% of revenues (H1 2017: 26%), the UK generated 11% (H1 2017: 8%), other European countries generated 17% of revenues (H1 2017: 29%) and Asia generated 7% (H1 2017: 5%).

 

In terms of sector diversification: gambling accounted for 70% of H1 2018 revenues (H1 2017: 63%) and Mobile Apps accounted for 20% of H1 revenues (H1 2017: 24%). The increase in the proportion of gambling related revenue was mainly due to the Group's decision to discontinue certain lower margin media buying activities.

 

We believe that we have laid solid foundations and believe the Financial Services sector will be an important growth engine for the Group in the medium term, performing alongside our more traditional end markets.

 

 

Business Segments review

 

($'000)

Publishing

Media

Other

Total

 

 

 

 

 

H1 2018

 

 

 

 

Revenues

32,360

23,446

3,282

59,088

% of revenues

54.8%

39.7%

5.5%

100%

 

 

 

 

 

Direct profit

25,586

7,083

852

33,521

Profit margin

79.1%

30.2%

26.0%

56.7%

 

 

 

 

 

H1 2017

 

 

 

 

Revenues

29,809

33,895

4,225

67,929

% of revenues

43.9%

49.9%

6.2%

100%

 

 

 

 

 

Direct profit

24,863

9,964

346

35,173

Profit margin

83.4%

29.4%

8.2%

51.8%

 

H1 2018 showed increase in the publishing segment but a decrease in the media, which resulted in overall revenues of $59.1 million, a decrease of 13% (H1 2017: $67.9 million).

 

Publishing

 

Publishing revenues grew 9% in the period to $32.4 million (H1 2017: $29.8 million), driven by acquisitions. H1 performance was impacted by a reduction in activity in a number of specific territories, in addition to regulatory changes outlined above. Some of these issues included spamming and other attacks on our websites as well as technical issues. Concurrently, the Group has been focused on recovery steps with the majority of technical and attacks issues having been resolved by now. In addition, we have been developing additional revenue generating activities. In 2018 we acquired websites and domains for an aggregate consideration of $45.8 million and will continue to acquire and develop more assets.

 

Direct profit margins reduced slightly, as previously guided, to $25.6 million or 79% of publishing revenues (H1 2017: $24.9 million, 83%) mainly as a result of increased investment in content and integrating recently acquired websites. We continue to invest and develop our existing assets and optimise recently acquired assets in order to improve performance going forward.

 

Media

 

Media revenues decreased 31% to $23.5 million (H1 2017: $33.9 million). This was primarily driven by proactive measures to cease low margin activities, lower levels of mobile traffic within the gaming segment and previously announced gambling regulatory changes. We are focusing our efforts in other sectors in the mobile division including driving sales across Asia, most notably Korea, as well as in other sectors such as financial apps and e-commerce through our US activities. In the medium term we see growth potential in media activities for fully regulated markets both for gambling as well as for personal financial products.

 

Direct profit for the media segment decreased 29% to $7.1 million or 30% of revenues (H1 2017: $10.0 million, 29%).

 

Current Trading and Outlook

 

We have started the second half of 2018 well, buoyed by the impact of recent acquisitions and positive signs of recovery in a number of key segments and markets.  Management has worked to continue the diversification of the Group's core operational activities, with continuous focus on setting strong foundations, and adding both scale and product diversity. We believe these measures and the investments made will underpin growth in the medium term.

 

The Board is therefore confident of meeting profit expectations for the full year and as such is declaring an interim dividend of $6.5 million or 3.0040  cents per share , to be paid in Pound Sterling (2.2728 pence per share) 2 November 2018 to shareholders on the register at 5 October 2018  . The ex-dividend date is 4 October 2018.

 

 

 

Financial review

 

 

H1 2018

H1 2017

Change

Revenues

59,088

67,929

-13%

Gross Profit

33,521

35,173

-5%

Operating expenses

16,243

16,028

+1%

Operating income

17,278

19,145

-10%

Adjusted EBITDA

20,883

22,893

-9%

Profit Before Tax

16,790

19,490

-14%

 

The first half of 2018 was impacted by the regulatory trends, a withdrawal from low margin activities and other SEO performance issues which resulted in revenues of $59.1 million, a decrease of 13% compared to the same period last year. 

 

Gross profit was $33.5 million or 57% of revenues, representing a 5% decrease compared to the same period last year (H1 2017: $35.2 million, 52%).

 

Operating expenses during the first six months of the year were $16.2 million, an increase of 1% compared to the same period last year (H1 2017: $16.0 million). The increase in costs was not significant. As we are focused on meeting performance expectations we control expenses but will continue to proportionally increase our operational expenses base in order to support future growth.

 

Operating expenses included $1.0 million of research and development expenses, reflecting a decrease compared to the same period last year (H1 2017: $2.5 million). These expenses are in addition to investments in technology and internal systems developed during the period of $4.3 million (H1 2017: $1.7 million). Total R&D spend together with capitalised costs was $5.3 million compared to $4.2 million in H1 2017. As we progress and enhance our systems a bigger portion of the spend serves for future benefits and less for ongoing support of our systems. We see technology as a key driver to increasing revenues and profit for the coming years.

 

Adjusted EBITDA1 reached $20.8 million or 35% of revenues, reflecting a decrease of 9% relative to the same period last year (H1 2017: $22.9 million, 34%).

 

As a result of the reduced revenues and gross profit as compared to the same period last year, profit before tax decreased by 14% to $16.8 million (H1 2017: $19.5 million). Net income for the period was $14.1 million, reflecting a decrease of 9% (H1 2017: $15.5 million). Net income included non-controlling interest of $0.5 million.

 

As at 30 June 2018 we had $51.3 million of cash and short-term investments compared to $43.3 million as at 31 December 2017.  The increase in cash reflects an increase of $13.4 million provided by operating activity, and an additional increase from share capital issuance of $42.6 million, offset mainly by investing $43.7 million mainly on acquisitions and $8.0 million of dividends paid out during the first half of 2018.   

 

Current assets as at 30 June 2018 were $77.0 million (31 Dec 2017: $67.1 million) and non-current assets were $129.0 million (31 Dec 2017: $87.4 million). The increase in non-current assets is attributed mainly to acquisitions of domains and websites.

 

Total equity as at 30 June 2018 was $166.2 million, or 81% of total assets (2017: 76%). At the end of 2017 and during H1 2018 we drew down bank loans totaling $11 million. With our current pipeline of potential acquisition targets, we expect to have access to larger bank facilities to execute them. The strong balance sheet combined with cash and short-term investments of $51.3 million together with strong banking relationships ensures the Group is well positioned to continue to execute its strategic plan.

 

 

 

[1] Earnings Before interest, Taxes, Depreciation and Amortization and adjusted to exclude share based payments

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

 

30 June

 

31 December

 

 

2018

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

 

 

 

 

 

Assets

 

 

 

 

   Current assets:

 

 

 

 

Cash and cash equivalents

 

41,976

 

38,416

Short-term investments

 

9,335

 

4,861

Trade receivables

 

17,776

 

18,950

Other receivables

 

6,769

 

4,665

Financial derivatives

 

1,128

 

200

 

 

 

 

 

 

 

76,984

 

67,092

 

 

 

 

 

Non-current assets:

 

 

 

 

Long-term investments

 

649

 

681

Property and equipment

 

1,419

 

1,230

Goodwill

 

30,052

 

30,052

Domains and websites

 

84,682

 

45,762

Other intangible assets

 

11,119

 

8,585

Deferred taxes

 

621

 

862

Other assets

 

455

 

244

 

 

 

 

 

 

 

128,997

 

87,416

 

 

 

 

 

 

 

205,981

 

154,508

 

 

 

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

 

30 June

 

31 December

 

 

2018

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

   Liabilities and equity

 

 

 

 

   Current liabilities:

 

 

 

 

Trade payables

 

9,926

 

9,813

Other liabilities and accounts payable

 

8,705

 

10,972

Income tax payable

 

10,708

 

8,573

Financial derivatives

 

162

 

1,425

Current maturity of long-term bank loans

 

5,475

 

2,500

 

 

 

 

 

 

 

34,976

 

33,283

 

 

 

 

 

   Non-current liabilities:

 

 

 

 

 

 

 

 

 

Long- term bank loans

 

4,243

 

2,500

Income tax payable

 

252

 

1,825

Deferred taxes

 

42

 

42

Other liabilities

 

225

 

201

 

 

 

 

 

 

 

4,762

 

4,568

 

 

 

 

 

   Equity:

 

 

 

 

Share capital

 

(*

 

*)

Share premium

 

111,911

 

68,417

Capital reserve from share-based transactions

 

1,766

 

1,227

Capital reserve from transactions with non-controlling interests

 

(2,445)

 

(2,445)

Retained earnings

 

54,720

 

49,167

 

 

 

 

 

Equity attributable to equity holders of the Company

 

165,952

 

116,366

 

 

 

 

 

Non-controlling interests

 

291

 

291

 

 

 

 

 

   Total equity

 

166,243

 

116,657

 

 

 

 

 

 

 

205,981

 

154,508

 

*) Lower than USD 1 thousand.

 

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

 

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

Six months ended

30 June

 

Year ended

31 December

 

 

2018

 

2017

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

(except per share data)

 

 

 

 

 

 

 

Revenues

 

59,088

 

67,929

 

137,632

Cost of revenues

 

25,567

 

32,756

 

64,487

 

 

 

 

 

 

 

Gross profit

 

33,521

 

35,173

 

73,145

 

 

 

 

 

 

 

Research and development expenses

 

966

 

2,518

 

4,474

Selling and marketing expenses

 

3,724

 

2,742

 

6,263

General and administrative expenses

 

11,553

 

10,768

 

21,639

 

 

 

 

 

 

 

 

 

16,243

 

16,028

 

32,376

 

 

 

 

 

 

 

Operating income

 

17,278

 

19,145

 

40,769

 

 

 

 

 

 

 

Finance expenses

 

(589)

 

(148)

 

(2,113)

Finance income

 

101

 

493

 

689

 

 

 

 

 

 

 

Finance income (expenses), net 

 

(488)

 

345

 

(1,424)

 

 

 

 

 

 

 

Profit before taxes on income

 

16,790

 

19,490

 

39,345

Taxes on income

 

2,738

 

3,981

 

7,474

 

 

 

 

 

 

 

Net income and other comprehensive income

 

14,052

 

15,509

 

31,871

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 Equity holders of the Company

 

13,553

 

14,587

 

30,323

 Non-controlling interests

 

499

 

922

 

1,548

 

 

 

 

 

 

 

 

 

14,052

 

15,509

 

31,871

 

 

 

 

 

 

 

Earnings per share attributable to equity holders of the Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted earnings per share (in USD)

 

0.06

 

0.07

 

0.15

Weighted average number of shares used in computing basic earnings per share (in thousands)

 

214,466

 

198,357

 

198,739

Weighted average number of shares used in computing diluted earnings per share (in thousands)

 

217,854

 

201,004

 

202,331

 

 

 

 

 

 

 

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Six months ended

30 June

 

Year ended

31 December

 

 

2018

 

2017

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

14,052

 

15,509

 

31,871

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to the profit or loss items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, amortisation and impairment

 

2,788

 

3,353

 

5,932

Finance (income) expense, net

 

(1,584)

 

1,350

 

2,813

Cost of share-based payment

 

774

 

338

 

419

Taxes on income

 

2,738

 

3,981

 

7,474

Exchange differences on balances of cash and cash equivalents

 

329

 

(1,313)

 

(1,545)

 

 

 

 

 

 

 

 

 

5,045

 

7,709

 

15,093

Changes in asset and liability items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease (increase) in trade receivables

 

1,174

 

(1,762)

 

(1,875)

Decrease (increase) in other receivables

 

(2,789)

 

1,047

 

(982)

Increase in trade payables

 

113

 

3,072

 

539

Increase (decrease) in other accounts payable

 

(2,459)

 

(72)

 

286

Increase (decrease) in other long-term liabilities

 

24

 

(5)

 

(27)

 

 

 

 

 

 

 

 

 

(3,937)

 

2,280

 

(2,059)

Cash paid and received during the period for:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

(215)

 

-

 

-

Interest received

 

99

 

15

 

17

Taxes paid

 

(2,195)

 

(2,214)

 

(4,154)

Taxes received

 

556

 

305

 

305

 

 

 

 

 

 

 

 

 

(1,755)

 

(1,894)

 

(3,832)

 

 

 

 

 

 

 

Net cash provided by operating activities

 

13,405

 

23,604

 

41,073

 

 

 

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

 

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)

 

 

 

 

 

 

 

Six months ended

30 June

 

Year ended

31 December

 

 

2018

 

2017

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

(421)

 

(120)

 

(388)

Payment for acquired business

 

-

 

(4,597)

 

(5,100)

Acquisition of and additions to domains, websites, technologies and other intangible assets

 

(43,756)

 

(4,825)

 

(16,160)

Proceeds and collection of receivable from sale of assets

 

150

 

150

 

300

Short- term and long-term investments, net

 

(4,964)

 

41

 

(1,595)

 

 

 

 

 

 

 

Net cash used in investing activities

 

(48,991)

 

(9,351)

 

(22,943)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Share capital issuance, net of issuance costs

 

42,618

 

-

 

-

Dividend paid to equity holders of the Company

 

(8,000)

 

(7,504)

 

(15,505)

Acquisition of non-controlling interests

 

-

 

-

 

(2,250)

Dividend paid to non-controlling interests

 

(499)

 

(881)

 

(1,804)

Proceeds from exercise of options

 

641

 

605

 

1,205

Repayment of long-term loan from bank

 

(1,250)

 

-

 

-

Receipt of long-term loan from bank

 

5,965

 

-

 

5,000

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

39,475

 

(7,780)

 

(13,354)

 

 

 

 

 

 

 

Exchange differences on balances of cash and cash equivalents

 

(329)

 

1,313

 

1,545

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

3,560

 

7,786

 

6,321

Cash and cash equivalents at the beginning of the period

 

38,416

 

32,095

 

32,095

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

41,976

 

39,881

 

38,416

 

 

 

 

 

 

 

 

Significant non-cash transactions:

 

 

 

 

 

 

Payable for acquisition of business

 

-

 

503

 

-

 

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

 

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1:                GENERAL

 

XLMEDIA PLC and its subsidiaries (The Group) are an online performance marketing companies. The Group attracts paying users from multiple online and mobile channels and directs them to online businesses.

 

The Group attracts users through online marketing techniques (such as publications and advertisements) which are then directed, by the Group, to its customers in return for a share of the revenue generated by such user, a fee generated per user acquired, fixed fees or a hybrid of any of these three models.

 

For further information regarding online marketing and the Group's business segments, see Note 3.

 

 

NOTE 2:                SUPPLEMENTARY INFORMATION

 

(a)       In January 2018, the Company issued 16,000,000 Ordinary shares in a placing to institutional investors at a price of 198 pence per Ordinary share. The total gross funds raised were approximately GBP 31.7 million (USD 44.2 million) and the related costs amounted to approximately GBP 1.1 million (USD 1.6 million).

   

(b)      During the period the Group acquired additional assets for the publishing segment for total cash consideration of approximately USD 40 million.

 

(c)       On March 13, 2018, the Company declared a dividend to its shareholders of USD 8 million ($0.04 per share).

 

(d)      In January 2018, the Company granted 3,000,000 options to employees (including to the Company's CEO and other key management personnel), exercisable to 3,000,000 ordinary shares in an exercise price of GBP 2.0 per share. The options vest over a period of 4 years from the grant date and are exercisable for a period of up to 8 years.

 

The following table specifies the inputs used for the fair value measurement of the grant:

 

 

 

 

Option pricing model

 

 

Black-Scholes-Merton formula

Exercise price GBP (USD)

 

 

2.0 (2.85)

Dividend yield (%)

 

 

0

Expected volatility of the share price (%)

 

 

47.3%

Risk- free interest rate (GBP curve)

 

 

1.13%

Expected life of share options (years)

 

 

5.2

Share price GBP (USD)

 

 

1.9 (2.71)

 

The total fair value of the options granted was calculated at USD 3,413 thousands at the grant date (USD 1.14 per option)

 

 

 

 

 

 

NOTE 3:         OPERATING SEGMENTS

 

(a) General:

The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes, the Group is organised into operating segments based on the products and services of the business units and has operating segments as follows:

 

Publishing

-

The Group owns over 2,300 informational websites in 18 languages. These websites refer potential customers to online businesses. The sites' content, written by professional writers, is designed to attract online traffic which the Group then directs to its customers online businesses.

 

Media                           

-

The Group's Media division acquires online advertising targeted at potential online traffic with the objective of directing it to the Group's users. The Group buys advertising space on search engines, websites, mobile and social networks and places adverts referring potential users to the Group's customers' websites or to its own websites.

            

 

 

 

 

 

 

Segment performance (segment profit) is evaluated based on revenues less direct operating costs.

 

Items that were not allocated are managed on a group basis.

 

 

(b) Reporting on operating segments:

 

 

 

Publishing

 

Media

 

Others

 

Total

 

 

 

USD in thousands

Six months ended 30 June 2018 (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

32,360

 

23,446

 

3,282

 

59,088

 

 

 

 

 

 

 

 

 

 

 

Segment profit

 

25,586

 

7,083

 

852

 

33,521

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate expenses

 

 

 

 

 

 

 

(16,243)

 

 

 

 

 

 

 

 

 

 

 

Finance expenses, net

 

 

 

 

 

 

 

(488)

 

 

 

 

 

 

 

 

 

 

 

Profit before taxes on income

 

 

 

 

 

 

 

16,790

 

 

 

 

NOTE 3:         OPERATING SEGMENTS (Cont.)

 

 

 

 

Publishing

 

Media

 

Others

 

Total

 

 

 

USD in thousands

Six months ended 30 June 2017 (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

29,809

 

33,895

 

4,225

 

67,929

 

 

 

 

 

 

 

 

 

 

 

Segment profit

 

24,863

 

9,964

 

346

 

35,173

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate expenses

 

 

 

 

 

 

 

(16,028)

 

 

 

 

 

 

 

 

 

 

 

Finance income, net

 

 

 

 

 

 

 

345

 

 

 

 

 

 

 

 

 

 

 

Profit before taxes on income

 

 

 

 

 

 

 

19,490

 

 

 

 

 

 

Publishing

 

Media

 

Others

 

Total

 

 

 

USD in thousands

Year ended 31 December 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

62,894

 

66,428

 

8,310

 

137,632

 

 

 

 

 

 

 

 

 

 

 

Segment profit

 

50,309

 

19,982

 

1,423

 

71,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate expenses

 

 

 

 

 

 

 

(30,945)

 

Finance expenses, net

 

 

 

 

 

 

 

(1,424)

 

 

 

 

 

 

 

 

 

 

 

Profit before taxes on income

 

 

 

 

 

 

 

39,345

 

 

 

 

 

 

 

 

 

 

 

 

 (c)                Geographic information:

 

Revenues classified by geographical areas based on internet user location:

 

 

 

Six months ended

30 June

 

Year ended

31 December

 

 

2018

 

2017

 

2017

 

 

Unaudited

 

Audited

 

 

USD in thousands

 

 

 

 

 

 

 

Scandinavia 

 

20,594

 

17,910

 

38,250

Other European countries

 

16,380

 

19,407

 

41,621

North America

 

11,337

 

18,887

 

29,665

Oceania

 

1,039

 

2,145

 

3,493

Asia

 

3,856

 

3,395

 

10,940

Other countries

 

2,600

 

922

 

3,766

 

 

 

 

 

 

 

Total revenues from identified locations 

 

55,806

 

62,666

 

127,735

Revenues from unidentified locations

 

3,282

 

5,263

 

9,897

 

 

 

 

 

 

 

Total revenues

 

59,088

 

67,929

 

137,632

 

 

NOTE 4:         SUBSEQUENT EVENTS

 

On September 23, 2018 the Company announced a dividend distribution to its shareholders of USD 6.5 million (USD 0.03 per share).

 

 

 


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