LBG Media reports strong full-year financial performance
By Josh White
Date: Wednesday 22 Jan 2025
(Sharecast News) - LBG Media reported a strong financial performance for the nine months ended 30 September on Wednesday, exceeding market expectations and positioning the company for further growth in 2025.
The AIM-traded digital content specialist, which was reporting a nine-month financial year after changing its year-end to September, said it achieved total revenue of £86.2m for the unaudited 12-month period, representing a 22% increase, driven by both organic growth and the acquisition of US-based Betches in October 2023.
Direct revenue rose 39% to £43.9m, while indirect revenue grew 6% to £40.7m.
The revenue mix continued to reflect a balanced business model, the board said, with direct contributing 51% and indirect accounting for 47% of total revenue.
LBG Media noted a significant shift in its revenue sources, with Facebook now contributing 23% of total revenue, down from 37% at the time of its initial public offering.
Adjusted EBITDA increased 16% to £24.5m, although the margin declined by two percentage points to 28% due to £3.4m in growth investments focused on direct and web operations.
The investments had already started to deliver positive results.
Profit before tax rose 32% to £14.5m, as the company reported cash and cash equivalents of £27.2m at the end of the period, reflecting strong cash conversion of 105%.
The firm highlighted deeper brand relationships and an increasing role in clients' corporate marketing strategies as key drivers of performance.
Integration of its US operations yielded significant wins, with major clients such as Netflix, L'Oreal, and White Castle.
The alignment of commercial teams had contributed to a robust pipeline and confidence in further expansion in the world's largest advertising market.
Despite a temporary impact from changes to Facebook's commercial model in the third quarter, LBG Media said it adapted quickly and saw a return to normalised revenue levels by the end of the first quarter of the 2025 financial year.
The company said it expected continued revenue diversification, with web-based revenues providing additional growth opportunities.
Looking ahead, LBG Media said it entered 2025 with strong momentum across its key growth areas of direct, indirect, and US expansion.
It said it was optimistic about achieving 10% revenue growth for the full year, adding that it was considering further investment to accelerate its US growth strategy.
"2024 was a transformational year for LBG Media," said chief executive officer Solly Solomou.
"We are running more campaigns for more blue-chip brands, particularly in the US, the largest advertising market in the world.
"We have been able to drive this momentum for two reasons."
Solomou said that firstly, the company's acquisition of Betches had extended its already-strong reach with US social audiences, with the combined business performing well.
"Secondly, LBG Media has a unique model - more than half a billion people globally, including gen Z and millennials, see us as the go-to destination for digital content.
"The biggest brands and the biggest celebrities therefore want to partner with us to access the growing buying power and influence of this hard-to-reach demographic.
"The strength of our model, our progress in the US, and our fantastic team, explain why our results are ahead of calendar year expectations and give us confidence of further progress in 2025."
At 1248 GMT, shares in LBG Media were up 0.8% at 126p.
Reporting by Josh White for Sharecast.com.
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