Online research platform and digital advertising company Pure Profile has written down its digital agency, Cohort, according to an explanatory note posted to shareholders on Friday.
As a result, Cohort’s existing technology will be decommissioned, and “all digital assets and campaign management functionality [will be] transitioned into Pure Profile’s internal management platform.”
The note to shareholders was posted in order to explain the nearly $14 million difference between the loss figures disclosed in its preliminary August results and in its 2018 annual report.
The preliminary financials disclosed a net loss of $12.1 million, while the annual report disclosed a loss of $26 million.
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“The difference is predominantly due to further impairment of goodwill in the Cohort business and Cohort platform, which was recognised and disclosed in the annual report,” said the note.
Pure Profile’s 2018 annual report saw a 2% slide in revenues to $52.0m, a 7% fall in gross profit to $24.2m and an EBITDA decline from $1.7m to $0.4m.
The company’s $12.1m net loss after tax was a fall from 2017’s $2.0m.
Pure Profile will now impair the remaining goodwill allocated to the Cohort business.
The acquisition of digital agency Cohort has been fraught with issues, including a dispute with shareholders Oceania Capital Partners – who sold digital agency Cohort to Pure Profile in late 2016 – over “poor financial stewardship”.
Oceania Capital Partners unsuccessfully attempted to replace executive chairman Andrew Edwards’ place on the board with Cohort founder Marcelo Ulvert.
During the tussle, Pure Profile hit back by suggesting it was misled during the $25 million acquisition of Cohort.
Pure Profile claimed that “based on feedback from shareholders and investors, the board considers that the erosion of share value is predominantly a result of the market’s dissatisfaction with the Cohort acquisition.”
A truce was eventually called after Oceania was granted a seat on the board.
Pure Profile has seen a series of senior management changes over the past year, with Nic Jones appointed CEO last December, shortly followed by founder Paul Chan leaving the business in February.
In June, former AdRoll Australia boss, Ben Sharp, was appointed head of revenue and operations after his brief stint heading industry body, ADMA.
Pure Profile have been approached for comment.