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XLMedia shares fall after it issues revenue and profit warning

Affiliate marketing network XLMedia has issued a revenue and profits warning, making amendments to its 2018 corporate expectations.

Updating investors, XLMedia outlined that the company has had to adjust to a number of regulatory impacts within Australia and Europe.

In its update the group stated: “Underlying trading in the year to date has been stable with the Group actively deciding to focus on higher margin business and ceasing certain lower margin media buying activities.”

The Group has also felt the impact of regulatory changes, namely the closure of the Australian market at the end of 2017 in addition to uncertainty regarding the regulatory status of certain European markets during 2018. These regulatory changes have triggered a re-alignment in how operators and marketers can work which should lead to a clearer and more functional environment. There has also been some reduction in SEO performance in few specific territories.

The restrictions, see XLMedia indicate lower corporate revenues than anticipated at $130 million, compared to corresponding 2017’s $137 million.

Declaring record-breaking trading for 2017, in which XLMedia reported corporate gross-profits of $71 million combined with a pre-tax profits’ of $39 million.

Adjusting to tougher market conditions, XLMedia has broadened its commercial pipeline expanding its services within the finance and cyber security sectors.

Entering 2018, XLMedia governance conducted a $44 million corporate fundraising round to support the firm’s ongoing growth strategy.

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