XLMedia rules out dividends and buybacks after annual loss

XLMedia ruled out dividends and share buybacks for the foreseeable future after the online marketing group swung to an annual loss of almost $58m (£47m).

The company reported a pretax loss of $57.7m in the year to the end of December compared with a profit of $36.1m a year earlier as revenue dropped to $79.7m from $93.5m.

XL's results were hit by an $81.3m impairment loss - up from just $300,000 a year earlier. The impairment was triggered by the reduced value of its assets after Google demoted many of XL's websites in January.

The company said the Covid-19 crisis had affected all its business streams with sports betting and personal finance hit by the cancellation of events and tighter marketing budgets. Online gambling and cyber security should reap slight benefits from the crisis, it said.

XL said in February that it would not pay a dividend for 2019 after revealing that Google's demotion of more than 100 casino websites would cost it up to $2m a month. It updated this guidance on Monday to tell investors not to expect a dividend or any repurchases of shares any time soon.

"We remain committed to investing in the core business alongside additional organic investment initiatives and as a result the board will not be recommending a dividend or share buyback programme for the foreseeable future," XL said.

The company's shares fell more than 10% in morning trading and were down 6.9% to 22.9p at 11:08 BST. The shares have halved in value from 46.5p at the start of 2020.

XL paid out $5.8m of dividends for the first half of 2019 and bought back $10.8m of shares between December 2018 and September 2019. It also bought 19.7m shares for £15.7m in a tender offer in August 2019.

The size of some companies' dividend payments and share buybacks are being called into question as the Covid-19 crisis saps their cash resources. XL said the impact of the Google downgrades and Covid-19 would not be more than its previous guidance over the year.

"Covid-19 will continue to create uncertainty in the short to medium-term, impacting a number of our end customers and verticals," XL said.

"As with many other companies, Q2 2020 looks likely to be a very challenging period, one during which significant change is being delivered against a background of increasing one-time costs as we further embed our transformation plans."