Controversial online media platform,Blinkx (LSE: BLNX) announced its results for the six months to the end of September this morning, and the figures made for depressing reading.
Year-on-year Blinkxs headline revenue dropped 14% to $91m from $106m as reported in the same period a year ago.Adjusted EBITDA (profit attributable to equity holders of the parent before interest, taxes, depreciation and amortisation,share-basedpayment expense, and acquisition and exceptional costs) for the period was negative $6.8m, down from a positive performance of $1m last year.
The groups adjusted loss for the period widened to $13.4m, from $5.6m and Blinkxs unadjusted loss for theperiod rose to a staggering $79.5m, up from a loss of $11.9m as reported last year.
Not as bad as it looks
Still, while Blinkxs results may seem terrible at first, after combing through the numbers the companys position is not as dire as it first appears.
Indeed, although Blinkx reported a loss of $79.5m for the six months to the end of September, acquisition and exceptional costs accounted for $61m of this total. If we use operating cash flow, which strips out non-cash impairment charges as a proxy for profit, Blinkxs loss falls to $8.8m for the period.
At the end of the half, Blinkx had cash andmarketable securities of $82.3m,compared with $95.7 million at 31 March 2015. So the company can afford to remain loss-making for the time being as it has plenty of cash to fund operations.
But Blinkx is making progress in other areas in an attempt to return to profitability.
For example, the company reported today that transformation strategy is progressing well with core mobile, video and programmatic revenues up 37% year-on-year to $62.9m. Core revenues now account for 69% of revenues, up from only 43% in the same period last year.
Furthermore, during the half Blinkx completed a $1m company-wide restructuring programme, which is expected to reduce fixed annualised operating expenses by over $15m. While revenues are shrinking, reducing costs seems to be a very prudent strategy and should help Blinkx preserve its cash balance.
Time to buy?
So, what should investors do following todays results release from Blinkx?
Well, its clear that the company is struggling to keep up with the competition. Blinkx reported a top-line of $215m last year, and a repeat of the companys performance to the end of Septemberwill see the company clock up only $180m in revenue this year. Thats down from a peak of $250m as reported for fiscal 2014.
Whats more, its difficult to value Blinkx at present. City analysts dont expect the company to report a profit for the next two years, and Blinkxs cash balance only amounts to 15.7p per share.
All in all, Blinkx is certainly not a stock for widows and orphans.
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