GrowthOps reports $48m loss as Asia-Pacific Digital writedowns bite
Marketing and technology group GrowthOps has reported a $48m loss as write downs from its acquisition of fellow ASX listed company Asia-Pacific Digital hit the business’ bottom line.
Along with the loss, the company also announced founding managing director Phillip Kingston would be stepping down, with CEO Paul Mansfield taking the role.
Kingston served as the company’s managing director since its IPO last year and will remain on the board as an executive director from March 18.
The operating company, which bought together creative agency AJF Partnership and a number of marketing and technology outfits including Khemistry and Voodoo Creative, renamed itself as GrowthOps in November.
In its half year report to the ASX, the listed company reported a statutory EBITDA loss of $20.0m on revenues of $34.4m included a $22.3m write down of Asia-Pacific Digital acquired in August last year.
On a pro-forma basis, the group claimed revenues had fallen 9.5% from the previous year from $40.1m to $36.3m with like-for-like EBITDA falling from $5.0m to 2.6m.
The group put the revenue fall down to the non-renewal of some APD and technology services clients’ agreements as well as a re-valuation of other service contracts held by the two operating arms.
In its half yearly report to the ASX, GrowthOps revealed APD had incurred a $200,000 EBITDA loss before acquisition and contributed $3.145m to the group’s losses over the period. The group also revealed it had refinanced $14.0m of debt inherited from APD following the purchase.
The company, which raised $70m in its float last year, finished the half year with $15.4m cash and equivalent assets.
GrowthOps CEO, Paul Mansfield, said about the results: “FY19 has really been a foundation year for GrowthOps.
“The launch of our ‘growth services’ offering, combined with our expanded Asia Pacific footprint following the APD acquisition, has generated a high level of interest among both existing and new clients.
“To support expected revenues over the medium term and ensure we continue to generate the best possible client outcomes, we have invested, and will continue to invest, in increasing staff capacity across our delivery, client relationship and project management functions.”
The group increased its full year 2019 income guidance from the $80-85m range to $82-87m, putting the increase to higher anticipated spending this financial year from certain existing clients and new client wins, both in the public and private sectors.
This surprises no one in Singapore. APD has never been a strong network or even a real agency. They’ve tried their best but it’s been a revolving door of talent at senior levels and those who have stayed aren’t the good ones. This is a real shame for AJF.
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Looks like about a year to burn through the remaining cash….
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As I predicted 12mths ago, the only people who would make money out of this is those who were smart enough to short it on the ASX.
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You should really learn how to read a financial statement.
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AJF is a fine agency. Its’ owners deserve much better than to be associated with what in my humble opinion is fast looking like a train wreck. I wish them well.
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