24th Sep 2019 12:48
(Alliance News) - Video advertising firm Tremor International Ltd warned that its full-year profitability will lag behind expectations despite posting a revenue rise in the first half of 2019.
In the six months to June 30, the company recorded a slight year-on-year revenue rise to USD144.9 million from USD144.0 million but swung to a pretax loss of USD3.3 million from a USD14.2 million profit the year before.
Expenses rose 37% to USD61.1 million from USD44.6 million in the first half of 2018.
Tremor completed the GBP135 million takeover of peer RhythmOne PLC in April and changed its name from Taptica International Ltd. Since the acquisition, the company has been focused on "streamlining operations" and "consolidating teams and resources".
The company generates revenue from its Branding unit and the Performance segment. Branding revenue rose 43% year-on-year to USD102.6 million from USD71.9 million but Performance revenue fell by 41% to USD42.3 million from USD72.1 million.
Tremor expects to continue refocusing the business to the Branding segment and added that the weaker trading from the Performance unit "will have a reduced impact on the company as a whole".
The company did warn however that its profitability will be behind expectations in 2019. Tremor explained that it has "divested" from "non-core and loss-making activities" and is confident of its medium to long-term prospects.
Chief Executive Ofer Druker said: "The merger with RhythmOne has been truly transformational for the company and is central to our vision of creating a robust and innovative video advertising company, now amongst the largest in the US.
"Given the merger, 2019 was always going to be a year of transition for Tremor, and there is still much to be done in completing the integration and in re-energizing parts of RhythmOne. We are however, fast realising the synergies and benefits that the enlarged business has presented and, although much of the heavy lifting is being carried out in the current financial year, we expect the company to feel the full benefit thereafter."
Tremor said it has no plans to pay an interim dividend, instead choosing to focus on "long-term value generation".
The company added: "The board continues to evaluate how best to deploy the company's cash reserves in order to optimise shareholder value."
Shares in Tremor were 3.5% higher at 149.00 pence each in London on Tuesday afternoon.
By Eric Cunha; [email protected]
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