(Alliance News) - XLMedia PLC on Tuesday announced the appointment of a new finance chief and said it is working with Google to address issues with the demotion of its online casino sites, including some premium sites.
Shares in XLMedia were down 25% at 25.15 pence in London on Tuesday.
New Chief Financial Officer Iain Balchin, "who has worked as a turnaround specialist in a series of group CFO roles", has been appointed with immediate effect.
Balchin's most recent role was as CFO of Ixaris Group, where he restructured Ixari's finance function. He also held CFO roles at WIZINK Bank and Ascot Lloyd Financial Services.
In addition to Balchin, XLMedia has also appointed Sarah Clark as its chief transformation officer. She was most recently general manager for Europe, Middle East & Africa at Loot Crate Inc.
The Limassol, Cyprus-based digital marketing firm said on January 20 that some of its casino sites had their ranking of Alphabet Inc's search engine demoted, meaning they were no longer as visible on browser searches.
The demotions are likely to cut XLMedia's monthly group revenue by around USD1 million to USD2 million, though this implies only a small reduction in repeat revenue.
Further, a lengthy demotion period might hurt rankings once sites are restored and it may take time for the company's previous high rankings to be restored.
"The company is continuing to work with Google to understand the issues which have led to certain websites being demoted and is working hard to resolve what it believes to be the key issues, with a view to restoring the rankings of these online assets as quickly as possible," said XLMedia.
So far, 107 of XLMedia's sites have been hurt by the demotion since the initial January announcement. Of these, 84 are classified by XLMedia as tier 3 or tier 4 - usually legacy sites or sites with low commercial value to the firm. The other 23 sites afflicted, however, are tier 1 and tier 2 premium sites.
Overall, the demoted sites tend to be online casino vertical while XLMedia's other verticals like personal finance have not been harmed.
At present, XLMedia thinks some of its tier 3 and tier 4 legacy sites might "have had a collective negative impact on the ranking of a broader pool of the Company's sites, including its premium sites".
To this end, the firm is working to either remove or de-index these in the hope "it will assist in the re-ranking of the premium sites". This measure is likely to shrink revenue by between USD3 million and USD5 million in 2020.
Some of these costs were included in its strategic changes, announced on December 19, but "it is expected that these issues will result in a revaluation of the company's assets and incur an impairment charge."
Until this removal and de-indexing is complete, however, and premium sites resubmitted, XLMedia said "it will not be possible to be certain that the issue will have been resolved".
Looking ahead, XLMedia has opted to accelerate some of the strategic changes announced in December. The announced changes were investing into and expanding global publishing activities, reviewing its technology platform, and an organisational restructuring.
The new strategy includes focusing on tier 1 and tier 2, while cutting down on tier 3 and tier 4 sites. The firm intends to "allocate significant resources to" making its tier 1 and 2 sites better and expanding them, as well as " incubating and developing new sites".
By Anna Farley; annafarley@alliancenews.com
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