18th May 2015 07:19
LONDON (Alliance News) - Internet media firm Blinkx PLC Monday said it swung to a pretax loss in its last financial year, as it invested heavily in an attempt to address "rapid industry changes" and a decline in revenue was further compounded by pressure on margins.
Blinkx also said that during its current financial year it expects to see further gross margin pressure as a result in the shift in its product mix and higher audience acquisition costs, but expects these costs to be partly offset by the measures it has taken to restructure its operations. It still expects to return to growth this year, accelerating into 2017.
The company posted a pretax loss of USD24.8 million for the year to end-March, compared with a pretax profit of USD17.1 million a year before, as revenue fell to USD215.0 million from USD247.2 million, and operating costs rose to USD222.8 million from USD215.3 million.
Blinkx attributed the decline in revenue to "changing advertiser requirements", a reduction in industry supply, and a trend towards lower margin programmatic trading and mobile usage, which hit its desktop products.
The company saw a shift in product mix towards lower margin products, and an increase in premium inventory costs. It expects this to hit gross margin and profitability in the near-term.
Blinkx has moved to restore its gross margin and profitability through a series of acquisitions, mostly in the mobile space, whilst at the same time cutting operating expenses.
"With the key portfolio acquisitions in place, we intend to redouble our focus on our integration efforts in financial year 2016, which will allow us to be even more responsive to customer demands and industry changes. We remain confident about our prospects in a dynamic industry - one that continues to change rapidly, but is also characterized by underlying growth and significant opportunities," said Chief Executive Officer Subhransu Mukherjee in a statement.
Shares in Blinkx are trading down 13% at 33.95 pence Monday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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