26 Jul 2016 07:00
Crossrider plc
("Crossrider," the "Company" or the "Group")
Half Year Trading Update
Notice of Results
Trading update
Crossrider (AIM:CROS) announces that for the six months ended 30 June 2016 it expects to report revenues of approximately US$29 million. This is a 29% decrease compared with US$41 million for the six months ended 30 June 2015. In line with the Board's expectations, this is primarily due to the reduction in revenues from the web extensions platform. The Group expects to report EBITDA for the six months ended 30 June 2016 of between US$3.3 million and US$3.5 million. Net cash at 30 June 2016 was $70.0 million.
As expected, the Web business has continued to generate strong gross margins, albeit at lower revenues than the prior year. Following a review of existing operations by new Chief Executive Officer Ido Erlichman, management has taken the strategic decision to protect these gross margins and invest more in the long term profitability of the app distribution platform. In order to consolidate margins and distribute additional apps, the Board has approved the decision to invest in development, sales resource and customer service in the second half of the year.
The Mobile business has seen year-on-year revenue growth lower than expected, although gross margins remain stable. As a result of the review in July 2016, the Directors took action to reduce headcount resulting in an annualised cash cost reduction associated with the Group's mobile platforms of approximately $1.2 million per annum.
The net result of the above actions of lowering the cost base and tightening working capital will improve cash-flow. However, both Revenue and EBITDA will be below current expectations for the full year by approximately 15%. The Group's balance sheet is strong, the business is cash generative and the Board is confident in the Group's ability to execute strategic acquisitions.
Ido Erlichman, Chief Executive Officer of Crossrider, said:
"The immediate actions following management's review are designed to increase the long term prospects and profitability of the Group. I am pleased to report our actions have improved our cash-flow and set the foundations for sustainable growth. The Group's balance sheet remains strong affording Crossrider the strategic platform to realise acquisitive growth.
"In my review I have found that Crossrider possesses a culture of operational excellence, as well as quality talent which has strength in depth. I look to the future with confidence, as does everyone at Crossrider. I look forward to updating shareholders with Crossrider's new strategic plan in September."
Notice of Results
The Company will announce its unaudited interim results for the six month period ended 30 June 2016 on 20 September 2016.
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For more information contact
Crossrider plc Ido Erlichman, Chief Executive Officer Mark Carlisle, Chief Financial Officer c/o Bell Pottinger
| +44 (0) 20 3772 2496 |
Shore Capital Bidhi Bhoma Toby Gibbs
| +44 (0) 20 7408 4090 |
Bell Pottinger David Rydell James Newman Sam Cartwright Vrudhi Patel | +44 (0) 20 3772 2496 |
About Crossrider
Crossrider is a creator of digital advertising platforms specialising in monetising web and mobile media through the use of big data. The Company's web and mobile platforms power ad networks, agencies and direct publishers and enable the delivery of relevant digital advertising through the analysis of big data: making online marketing significantly more efficient and cost effective.
The Group operates web and mobile platforms which generate big data, enabling the development of a proprietary ad serving algorithm and engine that can extract value from this data to deliver relevant advertising to targeted users.
Crossrider's vision is to become the de facto standard platform for delivering relevant web and mobile adverts to billions of people, powering the next generation of digital advertising.
www.crossrider.com