Crossrider (AIM: CROS), the creator of digital advertising platforms specialising in monetising web and mobile media through the use of big data, today provided DirectorsTalk with the following year-end trading update and announcement of a Directorate Change.
Trading Update
Trading in the period since the release of the Company’s interim results in September 2015 has been in line with market expectations. The Company expects that Adjusted EBITDA* for the full year to be in the region of c.US$10 million. Reflecting the strategy set out in the interim results to deliver increased margins rather than low margin revenue growth, revenue is expected to be c. US$85 million. The balance sheet remains strong, with cash of c. US$71 million at the period end.
Pleasingly, 2015 revenues from the targeted high volume lower margin Mobile marketplace increased by c. 130% from H1 2015 to H2 2015 and now represent c. 26% of the Company’s revenues. As outlined at the time of IPO, this is in line with the Company’s organic growth strategy for its Mobile business.
Similarly, revenues from the higher margin but lower growth Web business declined by c. 1% year on year and by 17% from H1 2015 to H2 2015 reflecting the decrease in volume of average daily new installations of Web applications which fell, as expected, from 1.4 billion in June 2015 to 0.4 billion in December 2015. Within the Web business, the Desktop applications distribution platform continued to perform well throughout 2015.
Considering the expected decline in the Web applications marketplace and the Company’s focus on the fast growing Mobile sector, whilst the Board expects FY2016 revenue and earnings to be ahead of FY2015 its current expectation is that any such increase will be modest.
Directorate Change
The Board also announces that it has accepted the resignation of Chief Executive Officer (“CEO”) Koby Menachemi. Mr Menachemi was one of the founders of the Company and following the achievement of 2014’s successful Initial Public Offering, Mr Menachemi will be leaving at the end of March 2016 to pursue other opportunities. A search process is already underway for a new CEO and, pending this appointment, Don Elgie has been appointed as Executive Chairman. Mr Elgie is a respected industry figurehead having founded Creston plc, a digitally focussed communications company, and served as CEO until March 2014.
Don Elgie said, “The Board would like to take this opportunity to thank Koby for his contribution to Crossrider since the founding of the Company nearly five years ago and we look forward to selecting a new CEO to lead Crossrider.
We continue to pursue our stated strategy of evaluating and pursuing M&A opportunities to best leverage the Group’s technology and expertise.”
