Regaining investors’ trust will be a tough ask for XLMedia
Our December 2018 Premium Research note on XLMedia considered whether the seemingly modest valuation of this performance marketing company presented a buying opportunity or if there where further problems lurking; the latest update has unfortunately confirmed it was the latter. We are puzzled by this bizarre company’s equally bizarre way of conducting itself and think it will take a lot to regain investor’s trust.
In the 2018 interim accounts, XLMedia (AIM: XLM) reported two core operating segments known as publishing and media buying. That structure has been torn up by the latest announcement in which management confirmed a reduction of what now is being referred to as ‘non-core’ media activities.
Media operations – which includes click-bait style advertising to drive traffic to either company owned or customer websites – represented 40% of group revenue and 22% of gross profit in…
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