Crossrider shares tank after board warns on earnings

Digital advertising platform creator Crossrider watched its shares nosedive on Tuesday, after the company issued a stark profit warning affecting its core products.

The AIM-traded company said that since its last trading update on 15 March, structural changes in its markets have negatively impacted on the outlook for future trading.

“Mobile revenue growth rates have declined significantly, particularly within mobile subscription campaigns which have been negatively impacted by increased regulation in certain countries,” Crossrider’s board said in a statement.

Additionally, revenue from monetising web apps through advertising was continuing to decline as the company had previously indicated.

“The rate of decline is significant and notably faster than previously expected, which will impact the group’s revenue and earnings for FY16.”

Crossrider’s board said it now expects group revenue and EBITDA to be around 25% lower than in 2015.

“Despite these challenging headwinds, the business remains operationally cash generative, the balance sheet remains strong with $70m of cash, and the board is confident in the group’s ability to execute accretive acquisitions,” the statement explained.

The market wasn’t quite so optimistic, however - at 1215 BST, shares in Crossrider were down more than 28% at 26.5p.