Tuesday 03 November 2009
Online video search company reports wider first-half loss.
Online video search engine Blinkx PLC Tuesday said it expects to be profitable in the 2011 fiscal year, despite posting a wider first-half loss.
Earlier Tuesday, Blinkx posted a first-half pretax loss of $7.3 million from $3.4 million on the year, which it said was due to increased spending on research, development and marketing.
Yet sales doubled in the same period, the six months to Sept. 30, and Chief Executive Suranga Chandratillake told Dow Jones Newswires Tuesday:"We incurred a number of one-time costs (and) our pretax loss grew but at a much slower rate than what revenue grew by on the equivalent period. The most recent analyst research suggests we're going to reach profitability in the next fiscal (2011) and we're comfortable with that."
House broker Citigroup wasn't able to publish a note Tuesday due to Blinkx's share placing, but in a note published in September it said it expects Blinkx to post a fiscal 2011 pretax profit of $7.6 million on sales of $58.3 million.
For fiscal 2009, which ended March 31, Blinkx posted a narrowed pretax loss of $9 million from $16 million a year earlier. Sales over fiscal 2009 totaled $13.9 million, increased from $6.5 million a year earlier.
The strong sales performance has continued in to fiscal 2010, as the $13 million of sales made in the six months to Sept. 30, or fiscal 2010 first half, nearly match what Blinkx made throughout the entire fiscal 2009.
CEO Chandratillake said:"It is advertising which generates the revenue. Even before the downturn we were seeing a structural shift towards online advertising and I think the downturn has sped up the process. Our online advertising is very measurable as you can track what happens after a user has watched a video. People want to see what they're getting for their money."
He believes the rest of 2009 and 2010 present a "tremendous opportunity" for Blinkx.
"As the global economic recovery creates a high-velocity upturn in advertising, Blinkx is perfectly positioned to profit from the increasing dominance of online advertising and the continued momentum towards return on investment-driven advertising," he said.
Blinkx also Tuesday announced it will raise around ...GBP5 million before expenses through a placing of 27,927,971 new ordinary shares at 18 pence each. Its shares closed at 19.5 pence each on Monday.
It said the funds will enable it "to seize growth opportunities that will arise as the economy recovers."
Chandratillake said Blinkx doesn't yet have any specific acquisition targets in mind, although he added:"We think there are going to be a number of interesting opportunities that arise, as some companies haven't done as well as us during the downturn."
At 1356 GMT, Blinkx shares were 1 pence, or 5%, lower at 18.5 pence, underperforming a slightly weaker Dow Jones Smaller Companies index, down 1.6%.
from Total Telecom
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