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XLMedia Plc backs its new commercial strategy to return its business to profitability by 2025.
Ahead of its AGM this morning, XLMedia published a statement by CEO David King citing a solid start to year trading in Europe and North America.
The London AIM media group continues its strategic reorganisation, in which the company agreed to sell its European and Canadian assets to Gambling.com Group for $38m, including an additional $5m earnout.
The deal sees XLMedia highlight a capital return for investors, as leadership anticipates “an initial return of capital to shareholders from the net sale proceeds in Q4 2024, further details of which will be announced in due course.”
XLMedia will provide six months of transition support for the assets to Gambling.com. Completing the sale of Europe and Canada properties, XLMedia expects that adjusted EBITDA from continuing operations will be approximately $5m for FY 2024 trading.
Under a new commercial strategy, XLMedia prioritises US growth, in which King stated: “With no further state launches confirmed, the Group is focused on optimising existing legalised sports betting states, monetising its audiences, and preparing the portfolio to maximise revenues from the new NFL season.
This includes daily fantasy sports, advertising and sponsorship, as well as new customer acquisition. The North America business is now in the off-season and will see the normal seasonal dip in sports revenues.”
FY2023 trading saw XLMedia book corporate losses of $57m, primarily attached to the necessary write-downs of its former European media assets and the reorganisation of the US network.
The firm’s new strategy will prioritise organic revenue growth in North America to help balance the Group’s cost base for 2025 to meet business needs, in which King views significant market opportunities in 20 states yet to legalise online sports betting, including California and Texas, and 43 states yet to legalise online casino gaming.
Despite recent Google algorithm changes impacting SEO rankings, media partnerships in the US continue to be viewed favourably as “the Group is working closely with all its Media Partners, the majority of which, to date, have been unaffected by the changes. The Group continues to focus on its Owned and Operated websites which have seen some improvements in rankings.”
King concluded: “Going forward, we will retain our focus on driving organic revenues in the North American market while continuing to prioritise rightsizing the Group’s remaining cost base, allowing it to enter 2025 with an infrastructure commensurate with the requirements of our North America business.
We would like to thank our shareholders for their support and look forward to updating shareholders on our progress going forward.”
