TIDMRTHM
RNS Number : 3911L
RhythmOne PLC
19 April 2018
RHYTHMONE PLC
TRADING UPDATE - FINANCIAL YEAR 2018
London, England and San Francisco, CA. - 19 April 2018 -
RhythmOne plc ("RhythmOne" or the "Company") today provides a
preliminary update on its expected performance for the full year
ended 31 March 2018 ("FY2018" or "the Period") that is in-line with
expectations. Note that this update is based on unaudited,
pre-close figures that may be subject to change following audit
review of the Company's accounts.
Financials
During the Period, RhythmOne has successfully executed against
three key objectives it set forth at the start of the financial
year and reiterated during the half year:
-- Growth of on-platform programmatic revenues;
-- Execution and integration of key strategic acquisitions; and
-- Continued profitability on an adjusted EBITDA(1) basis.
Other highlights include:
-- Excellent price performance, indicative of inventory quality;
-- Strong cash flows from operations;
-- Identification of larger synergies than originally anticipated from the YuMe acquisition.
Financial and operating performance for the full year and second
half-year is estimated to be at least:
(Millions) FY2018 FY2017(2) Change
Revenue $255.0 $149.0 71%
Adjusted EBITDA(1) $14.0 $1.4 900%
H22018 H22017(2) Change
Revenue $140.5 $83.0 69%
Adjusted EBITDA(1) $10.9 $3.8 187%
H22018 H12018 Change
Period End
Net Cash(3) $26.0 $39.3 ($13.3)
During the year, the Company reinforced its strategy to provide
one of the most efficient and effective marketplaces for digital
advertising, driven by its unified programmatic platform -
RhythmMax - providing massive scale, cutting edge technology and
unique, high-quality inventory. Growth was led primarily by
on-platform programmatic revenue growth, which saw an increase of
approximately 13% year-on-year.
During the fourth quarter of the Period, the Company completed
its acquisition of YuMe, Inc, ("YuMe") gaining access to premium
video and connected TV inventory, unique audience data,
cross-screen targeting technology and established demand
relationships. We believe the combination of RhythmOne's
supply-side strength and YuMe's demand-side leadership
substantially enhances the Company's long-term growth strategy. It
makes the Company's programmatic platform offering a robust and
meaningful alternative to major online media owners for agencies
and brands to address the online advertising opportunity.
The Company expects net cash on hand to total approximately $26M
as at 31 March 2018. This estimate includes the impact of the $26M
acquisition consideration payment for the YuMe transaction. A cash
bridge for the Period is outlined below:
Cash Bridge (Millions)
Cash Acquisition Ending
Beginning from YuMe Related Platform Cash
Cash Balance Operations Acquisition Costs Investment Balance
-------------- ------------ ------------- ------------ ------------ ---------
$39.3 $21.2 ($26.5) ($4.0) ($4.0) $26.0
-------------- ------------ ------------- ------------ ------------ ---------
Operations
During the Period, the Company successfully completed the
integration of legacy RadiumOne data assets and analytics tools
onto its platform, and continued to focus on building new audience
segments and delivering high-value inventory for advertisers. As a
result of these integration efforts and ongoing platform
enhancements, H2 2018 saw a significant rise in the Company's
operating metrics half-on-half and year-on-year across various
categories.
Platform volume grew by 58% year-on-year, as the Company
integrated additional quality supply sources. Over the last 12
months, the proportion of mobile supply has held steady at
approximately 61%, up from approximately 54% the year prior. Fill
rate decreased by 32% year-on-year, attributable to the increase in
volume, and inventory saw a strong year-on-year increase in pricing
of 61%, driven by monetization of high-value, high-impact and
high-margin video and rich media inventory, and the packaging of
premium supply through turnkey private marketplaces. Key operating
metrics are outlined below:
Metric H1 2017 H2 2017 FY 2017 H1 2018 H2 2018 FY 2018
--------------- -------- ------- -------- -------- -------- -------- --------
Volume Billions 7,469.4 13,099.2 20,568.5 16,750.4 15,845.2 32,595.5
--------------- -------- ------- -------- -------- -------- -------- --------
Desktop(4) % 51.3 42.5 45.7 38.7 38.7 38.7
--------------- -------- ------- -------- -------- -------- -------- --------
Mobile(4) % 48.7 57.5 54.3 61.3 61.3 61.3
--------------- -------- ------- -------- -------- -------- -------- --------
Fill Rate(5) % 0.58 0.31 0.41 0.25 0.30 0.28
--------------- -------- ------- -------- -------- -------- -------- --------
Price(6) $/CPM 1.54 2.00 1.76 2.72 2.96 2.84
--------------- -------- ------- -------- -------- -------- -------- --------
Integration
The integration of the Company's most recent acquisition, YuMe,
is progressing well and in line with expectations. Teams are
currently working to make YuMe supply accessible within the
RhythmOne platform, rationalize redundant systems and consolidate
sales teams - streamlining the delivery of combined capabilities
and furthering operating efficiency. YuMe legacy customers have
reacted very positively to the combination of the demand-side YuMe
business and the strong RhythmOne supply-side capabilities.
The Company has been driving efficiency across the organization
consistent with the rationale underlying the merger and now expects
to realize approximately $15M in annualized synergies versus the
previous view of $10-12M in anticipated savings as a combined
enterprise.
Outlook
Ted Hastings, CEO of RhythmOne, said:
"We are pleased with our results for the year, and the progress
we have made against our targets in terms of revenue growth,
profitability and product integration. We believe we are
well-positioned to deliver a further strong performance in FY2019 -
fully in line with current consensus estimates in market - as we
realize the full contribution of the YuMe acquisition. We
anticipate that our programmatic platform will continue to serve as
the Company's principal strategic growth driver, reinforced by
video and Connected TV leadership, unique audience data and a
commitment to quality and brand safety in our marketplace. Further,
we will maintain strong cost discipline, driving efficiency within
the Company with the aim of sustained profitability and value
generation for shareholders."
The Company intends to publish its full-year results on or about
Monday, 4 June 2018.
The information communicated herein constitutes inside
information.
RhythmOne confirms there is no other information required to be
disclosed pursuant to Schedule 2 paragraph (g) of the AIM
Rules.
Notes:
1. This press release contains references to adjusted EBITDA.
This financial measure does not have any standardized meaning
prescribed by IFRS and is therefore referred to as non-GAAP
measures. This non-GAAP measure used by RhythmOne may not be
comparable to similar measures used by other companies. Adjusted
EBITDA is defined as loss for the period, adjusted to exclude
finance income and expense, taxation, depreciation and
amortization, share based payments and exceptional items in
continuing operations and in discontinued operations, which include
goodwill impairment, change in intangible assets' lives,
acquisition-related costs, restructuring and severance costs,
settlement of litigation, fair value adjustments and unrealized
foreign exchange gain and loss.
2. Revenue from continuing operations for the year ended 31 March 2017.
3. Estimated Net Cash includes Cash and Cash Equivalents, offset
by revolving credit facility debt.
4. Volume of transactions (ad requests) processed through the
platform. Volumes are continuously optimized for performance and
yield.
5. Proportion of the transaction volume monetized, which is
impacted by seasonality and fluctuations in demand and supply.
6. Average price across all ad formats, expressed as Cost per Mille or Thousand Impressions.
About RhythmOne
RhythmOne drives engagement between advertisers and targeted
audiences - resulting in real, measurable business outcomes. We
offer fully integrated, cross-screen solutions that span desktop,
mobile, and connected TV ("CTV") across high-impact video, rich
media, display, social, and native advertising formats - ensuring
advertisers reach high-propensity audiences wherever and however
they consume content. The connections we make are further enhanced
through unique audience data and powered by our unified
programmatic platform, RhythmMax. This end-to-end platform -
coupled with the world-class service of our account teams -
provides more direct, efficient, and effective connections, driving
ROI for advertisers and publishers. Founded in 2004 in the UK,
RhythmOne is headquartered in San Francisco with offices in the US,
UK, Europe, APAC, and Canada. For more information, please visit
www.rhythmone.com.
Analyst and Investor Contact
Dan Slivjanovski
RhythmOne plc
Financial Media Contacts
Edward Bridges / Dwight Burden / Rob Mindell
FTI Consulting LLP
(UK) 020 3727 1000
Nomad and Broker for RhythmOne
Nick Westlake (Nomad) / Michael Wharton / Toby Adcock
Numis Securities Limited
(UK) 020 7260 1000
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
is acting for the Company and no one else as nominated advisor and
UK broker and financial advisor only and will not afford the
protections afforded to clients of Numis to any other person. To
the fullest extent permitted by law Numis expressly disclaims any
liability whatsoever arising out its role and/or of the contents of
this announcement to any person other than the Company.
Forward-Looking Statements
This update contains certain forward-looking statements with
respect to future events and our future financial performances. All
statements other than statements of historical fact are statements
that could be forward-looking statements, including, but not
limited to our Outlook, statements about the YuMe acquisition, the
anticipated benefits and synergies associated with the acquisition,
future opportunities, future expectations, beliefs, plans,
objective, financial conditions, assumptions or future events or
performance and quotations from management.
These forward-looking statements are subject to a number of
risks and uncertainties, assumptions and other factors that could
cause actual results and timing of events to differ materially from
future results that expressed or implied in our forward-looking
statements. Among the key factors that could cause or contribute to
such differences include the growth and prospects of the digital
advertising industry, forecasts regarding internet usage and
advertising spend, projected levels of growth in RhythmOne's
markets, RhythmOne's expectations about the factors that drive
business, RhythmOne's investments in international and emerging
market and sectors, anticipated trends and challenges in
RhythmOne's industry, including but not limited to the increasing
quantity, variety and fragmentation of digital video content,
platforms, distribution channels and technologies, the expansion of
the digital media advertising market in general and the digital
video advertising market in particular, RhythmOne's operating
results, including revenue, cost of revenue, expenses and
liquidity, RhythmOne's strategy and competition, market trends,
including overall opportunities for digital media advertising and
shifting advertising budget, the ongoing improvement and refinement
of RhythmOne's data-science capabilities, developments in the
regulatory framework applicable to RhythmOne's business, and
RhythmOne's intellectual property and proprietary technologies.
These and other risk factors are discussed in "Risk Factors" of the
prospectus/offer to exchange relating to the Offer and in the
documents incorporated by reference into such prospectus/offer to
exchange, including those in the section "Risk Factors" in YuMe's
Annual Report on Form 10-K for the year ended December 31, 2016 and
YuMe's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2017. Each of these referenced documents are on file
with the United States Securities and Exchange Commission and can
be found at www.sec.gov.
All forward-looking statements attributable to RhythmOne or
persons acting on their behalf, are expressly qualified in their
entirety by the cautionary statements set out herein and speak only
as of the date they are made. Subject to compliance with applicable
laws and regulations, RhythmOne disclaims any intention or
obligation to update or revise any forward-looking statements and
undertakes no obligation to release publicly the results of any
future revisions to the forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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