Snakk narrows first-half loss, fattening margins on rising revenue

Monday 30th November 2015

Snakk Media, which aggregates publishers’ advertising space on mobile devices and matches it to advertisers’ demand, narrowed its first-half loss as it fattened margins on increased revenue, led by faster growth in southeast Asia.

The Auckland based company reported a net loss of $240,000, or 0.9 cents per share, in the six months ended Sept. 30, from a loss of $2.2 million, or 0.83 cents, a year earlier, it said in a statement. Revenue climbed 13 percent to $4.6 million, while direct media costs almost halved to $3.1 million. That widened Snakk's gross margin to 67 percent from 36 percent a year earlier, and helped the company generate positive second quarter earnings before interest, tax, depreciation and amortisation of about $51,000, the first time it's been in the black on that basis in a quarter.

"We see a clear window of opportunity to build a highly valuable APAC (Asia Pacific) mobile advertising business," chief executive Mark Ryan said. "We plan to achieve this via a combination of organic growth and M&A activity, with a strong focus on the southeast Asian market."

Snakk migrated to the NXT market earlier this month, raising $2.2 million in a share offer at the same time, making it the second company to join the stock market's new board for small and medium sized companies with less onerous disclosure obligations. The shares last traded at 4.6 cents.

The company had cash and equivalents of $1.6 million as at Sept. 30, before it completed the share offer, and narrowed its operational cash burn to $1.2 million in the half from $2.5 million a year earlier.

Australian revenue fell 11 percent to $3.2 million in the half, while New Zealand sales climbed 42 percent to $791,000, and Singapore revenue came on stream at about $683,000.

BusinessDesk.co.nz

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