LBG Media reports solid first-half growth

18th Sep 2024 10:54

(Sharecast News) - Young adult-focussed digital entertainment company LBG Media reported a 55% increase in total first-half group revenue on Wednesday, to £42.3m, up from £27.3m in the same period last year.

The AIM-traded firm said adjusted EBITDA surged 240% to £10.2m, compared to £3m in the first half of 2023.

Profit before tax reached £7.1m, marking a significant turnaround from a £1.2m loss in the prior year.

The company also reported a strong cash position, with cash and equivalents rising to £26.6m from £15.8m at the end of December.

It said its growth was driven by a 29% organic increase in revenue and significant strategic developments across its direct and indirect revenue streams, as well as expansion in the United States.

For the first time since its inception, direct revenue accounted for more than half of the total group revenue, reflecting deeper relationships with blue-chip brands and a high rate of repeat client business.

LBG Media said its global audience reached a record 494 million, including 141 million in the US, highlighting its extensive reach among young adult audiences.

The company said its focus on high-quality content and platform enhancements led to a 90% increase in web advertising yields, indicating strong demand for its advertising inventory.

Notable campaigns during the period included Uber Eats sponsoring Euros-themed editions of the popular original series 'Snack Wars', which achieved viewership surpassing that of the Euros final on the BBC.

Other significant partnerships were formed with Costa Coffee, Wilkinson Sword, and GetYourGuide.

In the US, the company consolidated its operations into the Betches headquarters and reorganised sales teams to promote cross-portfolio selling.

Significant client wins in the US market included Boston Beer Co, NYX, and White Castle, demonstrating strong momentum and the complementary nature of its businesses.

Looking ahead, LBG Media said it was confident in its trajectory toward achieving £200m in revenue.

The board remained optimistic about meeting market expectations for the full year ending 31 December, citing strong financial performance and positive momentum across all areas of the business.

It also announced a change in its accounting reference date and financial year-end to better align with business planning and market dynamics.

Going forward, interim accounts would cover the six months ending 31 March, and annual accounts would encompass the 12 months ending 30 September.

Audited results for the nine-month period ending 30 September 2024 were expected to be released in January.

"Our strong first-half performance demonstrates excellent progress along our line of sight to £200m of revenue and showcases our team's success in diversifying income and strengthening our operating model," said chief executive officer Solly Solomou.

"Key sporting event activations and rising audience numbers confirm our position as the number one digital entertainment brand for young adults, a highly sought-after but challenging demographic for marketers.

"I am more excited than ever by the opportunity that lies ahead, particularly in the US, where we are going from strength to strength and where the complementary nature of our combined businesses is already demonstrating success."

Solomou said the company's "thoughtful and engaging" campaigns, which he said frequently deployed "messages of social responsibility", remained "central" to the firm's mission.

"In the complex digital media landscape, the detailed understanding we have of our audience and our propensity to be agile in such a dynamic market provide a strong foundation for long-term growth and the delivery of shareholder value."

At 1024 BST, shares in LBG Media were up 1.18% at 137.6p.

Reporting by Josh White for Sharecast.com.