Dowgate view2 Mar 2026 07:11
Audioboom plc (BOOM LN) - Date of First Investment November 2024 - +444.9% IRR as at 31 December 2025
Audioboom finished the year as the largest position in the portfolio at 12.7%, with a disclosed holding value of £5.47m and 148.8% total return. The very high IRR achieved thus far was achieved by nimble profit taking and reinvestment into the company by the manager during a period in which performance has been very strong. The investment has been held twice with the company trading from below 300p to in excess of 600p, the current holding significantly, so as takeover speculation looms.
Audioboom first entered the nursery in 2024 at 250-300p and went on to deliver a series of profit upgrades that transformed the profitability and future cash generation potential of the company. The shares subsequently rallied strongly to around 600p in Q1 25 when we took profits as trade war uncertainty grew. Following the market volatility of that year we have been able to significantly reinvest in Audioboom, but this time as a core holding because:
1) the value on offer was even greater (the profits this year are higher than last year for the same price);
2) the business is now exiting the last of its onerous contracts, unlocking cash generation at the business for the first time;
3) M&A activity in the podcast sector has ticked up noticeably, with serial acquirers such as Lemonada, Netflix, Spotify and others paying valuations which are at a large premium to Audioboom's; and
4) (most importantly) our understanding of the real value of Audioboom's business model has grown substantially.
Audioboom's business model is to help podcasters produce their shows and distribute them for monetisation. In this we observe a number of attractive qualities versus an entry valuation of 0.7x sales at the point of investment. Most significantly the end markets are in structural growth, with both the volume of listeners growing each year and the amount of advertising budget committed to this growing listener count growing at an even faster rate, creating a structural tailwind for revenues for Audioboom. Within these sales, the company has an emboldening competitive advantage to advertisers; it can provide them with the same, if not more, high-quality eyeballs and earlobes for their campaigns and products at a much lower cost than, say, a TV production house or broadcaster and still make a much better margin.
This is because the cost to produce a podcast for an hour is single digit percentages of the cost of making an hour of TV. To exaggerate for effect, a podcast is three people in a room with some basic recording equipment versus a series of production sets, high paid actors, camera crews and equipment etc in TV. This is why Audioboom's margins are starting to expand and their unit economics are likely to increase further. They can charge advertisers much less than their competition and deliver the same result, whilst making a higher profit margin. Tra
Sign In
Follow the stocks
