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Programmatic revenues driving growth at engage:BDR

Published 06-MAY-2019 09:31 A.M.


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engage:BDR (ASX:EN1, EN1O) provided a promising update for the month of April, which featured record revenues for the company’s programmatic exchange, indicating that the group is off to a strong start in the June quarter.

As well as achieving robust revenues, gross profit margins were sustained and the group’s consolidated receipts and cash outflows were slightly higher than previously reported.

The result also featured stringent cost management with net cash used in operating activities less or better than previously reported.

Management noted that $250,000 of April’s cash flow was deployed for future revenue, unrelated to April’s operating activities.

Consequently, the benefits of this investment should assist in driving sustained revenue growth.

As a snapshot, the company generated $1.2 million in revenues and received cash of $1.4 million which reflected a gross profit margin of 40%.

EN1 finished the month in a normalised net cash positive position of $240,000.

Investment aimed at activating publishers

Management informed the market in mid-March that it planned to deploy significant capital to activate publishers in order to generate incremental revenue.

The first group was quickly completed, and since then a second group activation has been initiated.

Initial steps to activate these publishers have been completed and EN1 will update the market with regard to the performance of the publishers, once live, against management’s expectations.

Providing further promise was management’s anticipated activation of additional groups of publishers in the near term.

Growth attributed to programmatic products

EN1 shifted its entire business model in 2016 to automate all sales channels to be entirely programmatic, abandoning the lower margin, non-programmatic legacy business.

The first full year of the programmatic business (2017) yielded $8.9 million, from zero to nearly $9 million for a brand-new product and essentially a new company.

Additionally, 2018 yielded nearly $10 million in the group’s second full year of operation.

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This year will be the programmatic business’ third full year, and management is confident of another strong performance based on the results so far and it expects to continue the growth with an amplified trajectory.

It is worth noting that on an annualised basis, April revenues equate to $14.6 million, which would represent year-on-year growth of approximately 40% relative to the group’s 2018 performance.

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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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