REG - XLMedia PLC - Trading Update & Notice of Results

XLMediaAnnouncement

30/07/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240730:nRSd2712Ya&default-theme=true

RNS Number : 2712Y  XLMedia PLC  30 July 2024

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014. Upon the publication of this announcement, this
information is now considered to be in the public domain.

 

30 July 2024

 

XLMedia PLC

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

 

Trading Update & Notice of Results

Remaining North America business continues to trade in line with management
expectations

 

XLMedia (AIM: XLM), a sports and gaming digital media company, today provides
the following trading update for the six months ended 30 June 2024 ("H1
2024").

 

The Group completed the sale of its Europe and Canada assets to
Gambling.com Group Limited ("GAMB") for a fixed consideration of $37.5
million ("Fixed Consideration") and a potential earnout consideration of up
to a further $5.0 million based on revenue performance ("Transaction") on 1
April 2024.

 

Following the Transaction, the remaining business ("Continuing Business")
consists of the North America business and a small residual income ("Other")
from Europe, principally from the legacy network business that was not sold to
GAMB. The Europe and Canada assets which have been disposed of ("Discontinued
Business") and associated costs will be reported against the Discontinued
Business line until the remaining costs are removed in Q4 2024.

 

Financial Summary

 

For H1 2024 reporting, the Discontinued Business revenue reflects only the
first three months of trading in 2024 prior to the Transaction, versus H1 2023
which includes revenue for the full six months in the period.

 

Revenue H1 2024

                             H1 2024 Revenue ($m)  H1 2023 Revenue ($m)
 Group Total Revenue         15.6                  29.4
 Discontinued Business(1)    (5.2)                 (12.5)
 Continuing Business(2)      10.4                  16.9
 North America               9.8                   16.2
 Other                       0.6                   0.7
 Continuing Business Total   10.4                  16.9

(1) For 2024 reporting, the Group classifies the Europe and Canada assets sold
to Gambling.com Group Limited as discontinued.

(2) The Group now classifies the remaining business which consists of the
North America business and a small residual income from the legacy network
business as continuing.

 

The Continuing Business contributed unaudited revenue of $10.4 million in H1
2024, in line with management expectations. The Discontinued Business
contributed unaudited revenue of $5.2 million in Q1 2024, in line with
management expectations.

 

The Group saw a solid start to the year in North America, supported by North
Carolina launching online sports betting on 11 March 2024. Although this
launch occurred after the end of the NFL season, the Company saw good growth
in customer registrations while offering the prospect of a further revenue
uplift when the new NFL season launches in September 2024. North America
revenues in H1 2024 were below the same period in 2023, primarily due to the
major launch of online sports betting in Ohio in January 2023 during the
NFL season and subsequently Massachusetts' launch in March 2023, after the
season had finished.

 

Cash

 

The initial payment of $20.0 million of the Fixed Consideration was received
with the next payment of $10.0 million due in October 2024. As previously
announced, the Company anticipates an initial return of capital to
shareholders from the net sale proceeds in Q4 2024, further details of which
will be announced in due course.

 

Cash at the end of June was $19.4 million after payment of $3.5 million in
respect of the final tranche of the CBWG acquisition. The Group will make its
final deferred acquisition payment of $4.0 million in respect of the
acquisition of Saturday Down South in September 2024. Following this, there
are no outstanding deferred acquisition payments due.

 

The Group continues to incur transition and restructuring costs including the
costs of the Discontinued Business.

 

Outlook

 

The North America business is seasonal, and the Company is seeing the normal
seasonal dip in sports revenues during the NFL off-season. With no further
state launches confirmed, the Group is focused on preparing for the new NFL
season and optimising performance in existing legalised sport and gaming
states. The Group continues to diversify revenue with daily fantasy sports,
paid media, advertising and sponsorship, as well as building its Gaming
presence for longer term growth.

 

Following Google actions in May 2024 which reduced visibility of some
publishers' sports betting and gaming content, the Group is working closely
with all its Media Partners, the majority of which, to date, have not been
negatively affected by the actions, while successfully relaunching content
with a small number of those that were temporarily impacted, while the Group's
Owned and Operated sport affiliate websites are currently benefiting from
improvements in their rankings.

 

Adjusted EBITDA(3) for the Continuing Business, excluding revenues and ongoing
costs of the Discontinued Business, is estimated at some $5.0 million for the
full year, benefiting from four months of the NFL season and reductions in the
central cost base serving the Continuing Business in H2 2024.

 

XLMedia's Board will continue to execute the Continuing Business strategy
whilst also evaluating ways to maximise shareholder value.

 

(3) Adjusted EBITDA is defined as the operating profit after adding back
depreciation, amortisation, impairment, share based payments, final
exceptional minimum guarantee cost and group restructuring costs, and
remaining costs associated with the discontinued business prior to their
removal.

 

Notice of H1 2024 Results

 

The Group's interim results will be announced in September, with full details
to follow nearer the time.

 

For more information on the sale of the Europe and Canada assets, please
visit: https://www.xlmedia.com/investors/regulatory-news/
(https://www.xlmedia.com/investors/regulatory-news/)

 

For further information, please contact:

 XLMedia plc                                              ir@xlmedia.com

 David King, Chief Executive Officer                      via Vigo Consulting

 www.xlmedia.com (http://www.xlmedia.com)

 Vigo Consulting                                          Tel: 020 7390 0233

 Jeremy Garcia / Fiona Hetherington / Kendall Hill

 www.vigoconsulting.com (http://www.vigoconsulting.com)

 Cavendish Capital Markets Limited (Nomad and Broker)     Tel: 020 7220 0500

 Giles Balleny / Callum Davidson (Corporate Finance)

 Charlie Combe (Corporate Broking)

 www.cavendish.com (http://www.cavendish.com)

 

About XLMedia

 

XLMedia (AIM: XLM) is a sports and gaming digital media company that creates
compelling content for highly engaged audiences and connects them to relevant
advertisers.

 

The Group manages a portfolio of premium brands in regulated markets which are
designed to reach passionate people with the right content at the right time.

 

Forward Looking Statements

 

This announcement contains forward-looking statements. Forward-looking
statements are neither historical facts nor assurances of future performance.
They are based only on our current beliefs, expectations and assumptions
regarding the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the future, they are
subject to inherent uncertainties, risks and changes in circumstances that are
difficult to predict and many of which are outside of our control. Our actual
results and financial condition may differ materially from those indicated in
the forward-looking statements. Therefore, you should not rely on any of these
forward-looking statements.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTEKLFLZDLZBBD