Crossrider expects only modest improvement in 2016

Crossrider shares were under pressure after the digital advertising platform said it expects 2016 results to be only modestly ahead of the previous year and announced the resignation of its chief executive officer.

The company said trading in the period since the interim results has been in line with market expectations. It expects adjusted earnings before interest, taxes, depreciation and amortisation for the full year of around $10m (£7m). This is down from $13.3m the previous year.

Meanwhile, revenue is expected to be around $85m, and Crossrider said it has cash of approximately $71m at the period end.

The company said revenue from the high-volume lower margin Mobile marketplace rose by around 130% from the first half to the second half of 2015 and now represents approximately 26% of its revenues.

Revenues from the higher margin but lower growth Web business, however, declined around 1% year-on-year and 17% from the first half to the second, reflecting the drop in volume of average daily new installations of Web applications.

“Considering the expected decline in the Web applications marketplace and the company's focus on the fast growing Mobile sector, whilst the board expects FY2016 revenue and earnings to be ahead of FY2015 its current expectation is that any such increase will be modest,” it said.

In addition, Crossrider said it had accepted the resignation of chief executive officer Koby Menachemi, who will be leaving the company at the end of March to pursue other opportunities.

The group said the search process for a new CEO was already underway and until then, Don Elgie – the founder of Creston – has been appointed as executive chairman.

At 0925 GMT, shares were down 27% to 39p.