20th Mar 2015 08:26
LONDON (Alliance News) - Digital Globe Services Ltd Friday said it swung to a first-half net loss, citing delays in completion of client mergers and its investment programme.
Digital Globe Services aims to help its clients attract customers through a range of measures, including optimised paid search, search engine optimisation, and social media. It makes money in the form of fees related to the number of customers it directs to its own clients.
In a statement, the company said it made a USD858,844 net loss in the six months ended December 31, 2014, compared with a USD781,552 net profit in the corresponding period of the prior year.
Revenue grew to USD18.4 million from USD17.7 million but an increase in the cost of generating that revenue also increased, meaning that gross profit fell to USD5.6 million from USD6.3 million. Administrative expenses increased to USD6.1 million from USD5.1 million, which also contributed to the swing. Extraordinary items, relating to severance payments to former employees as part of a restructuring, amounted to USD237,948.
Earnings before interest, tax, depreciation and amortisation, a figure which excludes foreign exchange gains or losses, extraordinary items, non-cash employee stock option plan charges, warrants and non-recurring severance costs, fell to USD0.5 million from USD2.3 million.
"While revenue growth and profitability in the first half were impacted by the delays in completion of client mergers and our investment programme, we are encouraged by business volumes in new geographies, activities and verticals in our third quarter," Jeff Cox, chief executive, said in a statement.
"In the second half of 2015, we expect to maintain year over year revenue and deliver gross margin approaching that of the first half of 2014 with EBITDA margin percentage returning to the double digits," Cox said.
Digital Globe shares were down 49% at 67 pence per share early Friday morning, the worst performer in the AIM All-Share.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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