LBG Media expecting strong first half result

Youth-focussed multi-channel digital publisher LBG Media said in a trading update on Thursday that it expected first-half revenue to have risen 8% year-on-year to £24.8m.

The AIM-traded firm said the performance followed strong prior year comparatives, where revenue grew 133% in the first half.

Direct revenue improved 11% to £10.6m in the six months ended 30 June, driven by “strong growth” in the group's international business.

Indirect revenue was ahead 4%, meanwhile, to £13.6m.

LBG said its “significant growth” in the volume of views continued in the period, up 40% year-on-year, reflecting growth in its market share.

However, the board said that was offset by a reduced revenue-per-view across the platforms as a result of the current economic environment.

Cash and cash equivalents at the period end on 30 June totalled £28.6m.

During the period, the group completed the small bolt-on acquisition of the ‘Go Animals’ Facebook pages, with a total of 6.8 million followers, increasing its target audience and bringing a new genre of content to its brand portfolio.

Post-acquisition, the page was rebranded as ‘Furry Tails’.

Looking ahead, LBG said indirect revenues had seen an improving trend towards the end of the first half into early trading in the second half, driven by an increase in revenue-per-view.

That was expected to continue into a seasonally-stronger second half.

Activity in the direct revenue segment had been supported by “significant” marketing in the first half, which had led to a “healthy pipeline” of prospects at the start of the latter half of the year.

The board said it was confident that the group's full year performance would be “at least in line” with market expectations.

Given the investments made in the first half and typical seasonality in digital advertising, profitability was expected to be “heavily” second-half weighted.

“The group continued to perform well both financially and operationally in the first half of the year, despite the challenging macro environment,” said chief executive officer Solly Solomou.

“We remain focused on producing exciting, relevant and socially responsible content to continue to engage our audience and grow our follower base.”

Solomou said that, as outlined at the initial public offering, the company’s growth strategy remained centred around three core growth pillars - geographies, acquisitions and capabilities.

“Included within this core strategy was an ambition to establish a physical presence in the US, one of the largest social media markets in the world and a key growth market.

“We are excited to be in the process of establishing operations in the US, which are expected to commence trading in 2023.”

At 1523 BST, shares in LBG Media were up 2.43% at 105p.

Reporting by Josh White at Sharecast.com.