26th Sep 2014 07:59
LONDON (Alliance News) - Digital Globe Services Ltd Friday said its pretax profit rose in its last financial year, and it expressed confidence for its future despite warning of challenges ahead as the US cable market experiences continued consolidation.
The online customer acquisition service provider will propose its final dividend when it issues a notice of its annual general meeting.
Digital Globe posted a pretax profit USD3.8 million for the year to end-June, up from USD2.7 million a year before, as revenue rose to USD38.9 million, from USD25.5 million.
The company said it had seen challenging market conditions as three of its largest US cable clients consolidated, and its four largest competitors merged. Additionally, its largest vendor Google Inc adjusted its business practices in a way that led to higher costs for Digital Globe's online advertising.
As a result of this, the company diversified its tactics beyond search engine marketing to include social media, e-mail campaigns, directories and other online advertising. It diversified its customer base, with overall revenues from its top five customers reducing to less than 70% of total revenues, from 90% a year before.
The company expects to increase its capital expenditure and book higher operating expenses in the short term as it invests in entering the European market and expanding its software platform.
The company faces some uncertainty around the short-term impact of its largest clients merging, although it remains confident in meeting its targets. Digital Globe warned that with Time Warner Cable Inc, the second largest cable operator in the US, expected to cease existing "in its current form", it will be challenged to become more important to fewer, but larger, clients.
"Although we anticipate the 2015 financial year will see challenges from key existing customers and from new markets, we are confident in the ability of the group to adapt, to innovate and to maintain its continuing track record of profitable growth," the company said in a statement.
Shares in Digital Globe were trading down 10.6% at 144.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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