Friday 25 May 2012

18 May 2012 blinkx BLNX (FTSE AIM All Share) 43p BUY (TP - 200p)

blinkx reported FY’12 revenues +73%YoY to US$114.4m. Adjusted PBT rose +28%YoY to $10.8m. Reported PAT was $3.9m inclusive of acquired amortisation ($4.1m) and restructuring costs ($4.74m). EBITDA (DSCE) was $18.1m (inclusive of Depreciation and Amortisation of $6.4m and share-based payments of $1.5m) compared to DSCE of $14.1m. The year end cash balance was $38.4m compared to $52.8m at 31 March 2011, following acquisition activity.
blinkx highlighted a significant number of developments: new content partnerships with PERFORM, Future Publishing, the Bleacher Report, Cinesport, Rooftop Comedy and FashionTV; distribution agreements with Sony, Roku, Orb Networks and Aurasma (the Autonomy enhanced reality project); the video search syndication agreement with AOL; and Disney, IBM, JP Morgan and Lucozade added as brand advertising clients.
CEO Suranga Chandratillake commented: “This year we have continued to see strong momentum in the online video market, and, in this young and constantly evolving Internet industry, we have also experienced unexpected growth in new and related arenas, such as the soaring popularity of smartphones and tablet devices, including the iPad … We remain confident in our position in the market and the progress we have made this year, and are excited about the opportunities that lie before us.”
blinkx previewed today’s earnings announcement in its April 10th announcement. The acquisition of Burst Media and of PVMG introduced an element of confusion to the (Ad Hoc) search-based targeted advertising model despite being positioned to extend the company’s web presence and reach. Subsequently blinkx has continued to add both content partners and brand advertising clients, the mainspring of its business model. The impending flotation of Facebook and gathering momentum of both the Connected TV and smartphone phenomena serve as a timely reminder of the pace of change to which blinkx refers, which is still in its infancy.
blinkx remains “in the right space” at the confluence of online viewing and a shift in advertising media and behaviour. Our rating is “Buy”. 

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