Isentia earnings fall after ‘disappointing’ performance from King Content
Media monitoring company Isentia’s revenue has climbed slightly – increasing 5% from $75.8 million in the first half of the 2016 financial year to $79.6 million – but revenue for its content marketing arm, King Content has declined 11% year-on-year after the loss of a number of clients, contributing to an overall decline in earnings for the group.
In releasing the company’s financials for the six months to December 2016, managing director and CEO John Croll noted there had been mixed results across the different arms of the business after challenging market conditions.
“Our SaaS [software as a service] and VAS [value-added services] businesses in ANZ and Asia delivered pleasing revenue growth of 7%. In ANZ, VAS growth was strong, increasing 15%, supported by higher demand for our Insights products.
“The marginal decline in ANZ Saas/VAS EBITDA [earnings before interest, tax, depreciation and amortisation] in the first half reflected a more challenging than expected environment for SaaS revenue in November and December and the increase in copyright fees.”
Croll reaffirmed that the performance of King Content – the content marketing agency it acquired in 2015 for $48m – was disappointing and would have knock-on effects for the business’ future performance.
“As previously disclosed, Content Marketing’s performance was disappointing and the 11% revenue decline resulted in an EBITDA loss of $2 million for FY17 H1. We have made a number of improvements to the content marketing business including appointing Matt Stanton as the new CEO. However our previous guidance for EBITDA breakeven for FY17 will not be achieved.
“In finalising the first half result, we have reviewed the full FY17 outlook and now expect the ANZ and Asia SaaS/VAS business to deliver mid to high single digit revenue growth and low single digit range EBITDA growth. We expect to deliver a full year FY17 EBITDA loss in Content Marketing While I am disappointed in the result, importantly we have a number of initiatives underway to improve execution and grow the business.”
In its presentation to investors, Isentia noted the King Content’s “execution needs to improve” and that even though the sales pipeline is improving, lead times to conversion are longer than expected.
The presentation also broke down the management initiative to improve performance of King Content, including: the implementation of a new organisational structure, the integration of the content marketing sales team with Isentia and the appointment of Stanton as CEO, who commenced on 7 February.
Craig is a f***ing genius!
User ID not verified.
What Anonymous said. Haw, haw, haw! Well played, old boy! $uperb $ale$man$hip!
User ID not verified.
Isn’t King Content “Australia’s most awarded digital content marketing agency”? Seems like fair reason to question what such accolades actually represent.
User ID not verified.