Digital Globe's investments pay off with record high revenues

Digital Globe Services, a provider of digital marketing solutions for large consumer-facing organisations, has recorded its highest ever full-year revenue at $47.8m after investments in both technology and people.

The firm has invested in its optimising technology platform dgSMART and its software as a service (SaaS) integration platform dgsAPI, to drive margin improvement in 2017. It also acquired a US based contact centre to expand satellite verticals and to drive profit growth, increasing contact centre agent staff by 20%.

The group’s revenue rose 19% as a result of continued growth in the firm’s core business as well as from new verticals. Revenue from verticals outside of the company’s core telecoms and media clients grew to $19.2m from $15.3m in 2015.

Revenue from its core customers increased 32% year on year as that segment continued its focus on subscriber acquisition and commercial services.

The firm’s gross margin compressed in the second half to 27.6% from 32.7% in the previous period. The firm attributed this to increased marketing investment in its core business and new verticals. Gross profit was constant at $13.2m.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $2.5m from $3m in the previous period.

The firm recorded a net loss of $4.9m, down from a profit of $2.6m in the previous period. The firm said this was driven primarily by a non-cash goodwill impairment of $4.1m, write down of $3.3m of aging accounts receivables and $0.8m of revenue reversal according to the firm.

Cash on hand at 30 June 2016 was $1.3m, down from $2.2m in the previous period.

The firm also launched 7degrees in the second half, a social media advertising services agency, diversifying group revenue.

Digital Globe won its first major European telecoms customer which the board feel will generate revenue in 2017.

Chief executive Jeff Cox said: "This financial year has been characterised by significant investment in both our technology and our people. We expect the progress made in FY16 to continue into FY17 with a recovery in our margins as our investments bear fruit. We are confident in achieving continued growth and a significant increase in profitability in FY17."

Basic loss per share of $0.18 compared to the earnings per share in the previous period of $0.09.

The board did not recommend paying a final dividend for the period, which resulted in a total dividend of $0.7m at $0.026 per share paid on 7 April 2016 resulting in a trailing dividend yield of about 4%.

The share price fell 21.52% to 36.10p at 0915 BST on Tuesday.