XLM predicts strong full year trading despite European Casino hurdles
XLMedia (XLM) expects 2021 to be a year of successful trading ahead of the publishing of its trading results for the 12 months ending 31 December, driven by several sports acquisitions and partnerships.
Overall, the digital performance publishing group expects full year results to be ‘in line with expectations’ with revenue of $66.6 million (2020: $54.8 million) and adjusted EBITDA of around $17.2 million (2020: $12.2 million).
Meanwhile, the firm’s cash balances – including short and long-term deposits – are predicted to stand at $24.7 million (2020: $15.4 million). From an operational perspective, the company has particularly lauded the performance of its sports unit.
XLM anticipates sports revenue of approximately US$25.2 million (2020: US$11.3 million), assisted by two US sports acquisitions and several publishing partnerships. The group’s European operations were similarly bolstered via its M&A strategy – by acquiring BlueClawMedia, XLM aims to enhance its European Sports business by gaining a UK-based operations hub.
However, XLM has acknowledged ‘trading pressures’ on its European Casio assets, anticipating further revenue declines, with total turnover for this vertical estimated at $23.2 million (2020: $31.7 million). Finland in particular was highlighted as a difficult market due to “negative regulatory change which will significantly impact revenue performance in the coming year’.
These difficulties in casino are expected to partially offset XLM’s performance in North America, where the firm has secured coverage across 15 states and detailed ‘an increasing market opportunity’ as more states legalise online sports betting.
The predictions fall in line with the XLM’s expectations detailed in its H1 2021 trading report, in which the group acknowledged heavier short-term investments of $36.9 million coupled with transformative costs.
XLM detailed: “Continued progress has been made rationalising and reorganising the Company to further capitalise on the North American market opportunity and to materially reduce risk from legacy areas of the business. This initiative is well advanced, with additional costs to be incurred until mid 2022 as expected.”
This reorganisation has included the Personal Finance division, which has been in ‘a state of transition’ – a process which the group expects will also negatively impact its full year trading – with the unit’s revenues predicted to reach $8.8 million (2020: $8.4 million).
XLM full year trading predictions come as the firm began 2022 by initiating a search for a new Chair, after incumbent Christopher Bell vacated the position to join ‘Nueva Codere‘, the business identity of Grupo Codere SA.