XLMedia plc (lon:xlm)
XL Media – No News On The Google Ranking Issue

XLMedia plc Financials

ItemCurrent PeriodPrevious Period
Period12 Months12 Months
Adjusted Earnings
Adjusted EBITDA£33m£43m
Statutory Profit(£60m)£32m
Adjusted Profit
Total Debt
Net Debt

Commentary History
No ticker supplied in the url so commentary history can not be collected.
XLMedia plc Share Price
Grade:The Pink Grade - A Pure Slightly Informed Gamble, The Market Doesn't Like The Company But I Think That I Understand Why.
Title: XL Media – No News On The Google Ranking Issue
Company: XLM - XLMedia plc
Share Price Then: 23p
Author: Ian Smith
Date: Thu 02 Jul 2020
Comments: I understand that anything to do with search engine ranking will take time, especially where they may be conflicts between Google and the site owners.

In this case the site owner’s ideal is to provide as little as new content as possible at the lowest price whilst convincing site visitors to visit and click advertising links whilst Google doesn’t want to rank this type of site highly.

This is a tricky balance as you only need to do a Google search and see how many link site have top ranking, all advertising at the top and “content” below.

On the 11th of June the company called an EGM to seek Shareholder's approval to the adoption of the XLMedia 2020 Global Share Incentive Plan following feedback from certain Shareholders.

So I would be concerned that the board wants to pay itself bonuses that the shareholders have concerns over whilst the core aspect of the business appears to be in trouble.

In 2019 they took an £81m impairment charge, I talked about these in a previous commentary and being simplistic this means that money they spent in the past is effectively wasted, having written that money off, they are now looking to allow for bonuses for any future recovery.

Add to this a noticeable decrease in gross profits and with a market cap of around £45m are the management in this for the long term?

2019 2018
Revenues $79m $93m
Cost of revenues $26m $30m
Gross profit $53m $63m
Operating expenses $27m $26m

The average share volume is around 1.2 million shares a day or £280,000 so there is going to be some volatility in the share price but if the company says it can fix its Google issue then surely we have to look at the future for the business.
Read Count: 250/13149

Buy/No Buy In A Nutshell
NegativesGoogle manually deranked a lot of their sites apparently because of a quality issue in Jan 2020 and no fix has been announced, suggesting that there is a real risk that there may never be a fix.
PositivesThey can fix the Google ranking issue.
Initial Review Price24p
Last Review Price24p
Last Review Date14-Jul-2020
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