Photon Group confirms $87.5m loss

Photon Group has moved from a reported profit of $38m last year to a loss of $87.5m for the 2010 financial year, the company has announced.  

Setting aside one-off costs, the company’s EBITDA (earnings before interest tax depreciation and amortisation) profits fell from $89.3m to $46.7m.

Much of yesterday’s announcement had already been flagged up in market updates.

Photon’s shares have fallen around 30% since last Wednesday when they briefly rallied to 14c. They are now trading at just below 10c. Before the company left the ASX for the fund raising its share price had been above $1.

Photon owns some of Australia’s best known agencies including BWM, BMF and Naked Communications. It ran into trouble when it became apparent that it would struggle to pay the full earnout payments to the founders of the agencies it had bought. It led to the departure of founder Tim Hughes.

The company is currently in the final stages of a recapitalisation.

Photon said the drop was “primarily driven by the decline of the Internet and Ecommerce division.” Its international internet division fell from an EBITDA profit of $19.7m to a loss of $6.5m.

However, Photon’s figures show that every division did worse than in the previous financial year. Australian field marketing fell from an EBITDA profit of $25m to $19.3m. Australian agencies fell slightly from $28.9m to $28.1m and international agencies fell from $24.6m to $24.3m.

The company’s profit margins fell from 20.3% to 12.3%


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