XL Media swings to H1 reported pre-tax loss despite improved revenues

XLMedia stated revenues had grown from $27.7m to $32.2m and gross profits had increased to $18.3m from $16.6m and underlying earnings had improved to $6.6m from $5.1m a year earlier.

However, on a reported pre-tax basis, XLMedia swung from a $200,000 profit in 2020 to a $400,000 loss and posted a $573,000 operating loss, a marked turnaround when compared to the $279,000 operating profit reported at the same time twelve months prior.

The AIM-listed group's first-half loss was principally a result of an increase in expenses from $16.33m to $18.83m and transformation costs of $1.0m following the continuation of its restructuring plan.

Chief executive Stuart Simms said: "We continued to make further organisational progress in the first six months of the year, as we expanded our portfolio of high-quality branded sites, whilst also laying the foundations to improve the use of our first-party data.

"I have challenged the business to accelerate the acquisition of new assets, reorganise and re-build our capability and to develop a new data and technology platform."

Separately, XLMedia revealed it had acquired Leeds-based agency BlueClaw in a deal worth as much as £1.8m, proving it with a UK hub for its European sports business.

The acquisition will be funded through existing cash resources, with XL paying £600,000 on completion, with an additional £600,000 payable at the end of year one and a further £600,000 to be paid as earnouts, contingent on certain performance targets being met.

XLMedia expects the acquisition to be earnings accretive in the first full year of ownership.

As of 1120 BST, XLMedia shares were up 0.75% at 53.40p.