XLMedia plc (lon:xlm)
XLM Media – A Company Whose Time IS Coming To An End?

XLMedia plc Financials

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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: XLM Media – A Company Whose Time IS Coming To An End?
Company: XLM - XLMedia plc
Share Price Then: 50p
Author: Ian Smith
Date: Wed 01 May 2019
Comments: XLM Media owns more than 2,300 informational websites in 18 languages which it uses to offer advertising links both for its own benefit as well for clients, in addition it generates further traffic acting as media buying for clients.

The company has stated an intention to reduce low margin activities so there is expected to be a drop in revenue but an increase in profitably, initially the higher margin lower volume activity may show a reduced total profit.

They describe the future as Going forward, the Group's focus will be on regulated markets across the gambling sector globally and personal finance sector, particularly in North America.

Looking at two headline numbers we see Profit before Tax $25 million (2018) and $39 million in (2017) on turnovers of 117 million (2018) and $137 million (2017)

A few years ago this was a great business peaking at over 200p per share in 2018, today it is trading at 49p which is about 20% off its all time low in 2015 roughly when it listed.

When a company has 2,300 websites it is reasonable to question the quality of such sites, how can you provide useful content for so many?

Looking at those sites highlighted on the XLM website I see sites lacking in the sort of content that would make you a regular visitor, instead they seem to be link and after link with a bit of content that is pretty generic.

It may be that this type of site can continue to generate new readers who follow links or it may be the search rankings issues that the company reported as website ranking issues impacted by spamming and other attacks on key publishing assets are going to become more of an issue as search engines evolve to prefer more original content.

My own personal experience is that users are getting more and more annoyed by “click bait” sites along with more mobile phone use there is less space for advertising, although tablets have screen resolutions similar to PCs.

As gambling sites are a key focus for the company regulation of online gambling and advertising gambling is an area of real concern.

Finally XLM is an AIM listed company but its contact page says Get in touch with XLMedia’s Head Office in Cyprus, Israel operations (WebPals) and our registered office in Jersey using the details below.

It is also worth noting that the company is buying back shares, but they are being kept in treasury rather than being cancelled so they could be back on the open market again.

Despite there being no news yesterday (Apr 30) there was a £2 million trade I am too small an investor to get access to the reason for this.
Read Count: 312/7057

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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