Financial

XLMedia Shares at Record Low due to Earnings Drop

XLMedia stated in its pre-close trading announcement that the overall drop in expectations was due to mid-year issues in the North American market.

XLMedia Shares at Record Low due to Earnings Drop
XLMedia Shares at Record Low due to Earnings Drop

Following Friday's statement, XLMedia shares fell 23% to 5.86 pence each, the lowest since the business went public in 2014. In the same statement, the affiliate group's board stated that it will not pursue the sale of the company after conversations with possible suitors failed.

The group's revenues for the entire year are now forecast to be in the $50m to $52m range, with adjusted EBITDA in the $12m to $14m range. XLMedia reported revenue of $73.7 million in 2022 and $66.5 million in 2021, with EBITDA of $16.7 million and $17.9 million in those years, respectively.

XLMedia stated in its pre-close trading announcement that the overall drop in expectations was due to mid-year issues in the North American market.

When it released its interim results in September, the company stated that it was suffering due to a decrease in client acquisition marketing activities by several operators. The resignation of its major partner, Barstool Sports, in particular, resulted in a dramatic shift in the revenue profile of the group's North American business.

XLMedia stated that the launch of ESPN Bet in mid-November increased revenues and that it expects to have a solid year-end performance in North America. In other good news, the group's European brands Nettikasinot, Whichbingo, and Freebets continue to grow.

“While there is still opportunity to generate significant revenues in the remainder of the year now that December acquisition budgets have been confirmed, it is now unlikely that this will fully compensate for mid-period shortfalls and, consequently, North American revenues will now fall below previous forecasts.”

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