LBG Media (LBG) H1 2026 earnings summary

Executive summary

• Revenue grew 22% year-over-year to £53.6m, driven by a 97% surge in direct revenues, now 72% of total revenue, with significant growth in the U.S. and among blue-chip clients.

• Indirect revenues (web and social) declined 40–41% due to structural market shifts, platform algorithm changes, and lower search traffic.

• Adjusted EBITDA fell 34% to £8.0m, reflecting investment in direct sales, original content, and a lower-margin revenue mix.

• Direct business now represents 72% of group revenue, up from 44% year-over-year, with strategic partnerships and proprietary products enhancing client retention.

• Strategic investments in IP, AI tools, and operational efficiency are central to the long-term strategy.

Financial highlights

• Adjusted revenue grew 22% year-over-year to £53.6m; direct revenue up 97%, indirect revenue down 40%.

• Adjusted EBITDA declined 34% to £8.0m; margin fell to 15.4% from 27.8%.

• Payroll costs rose 11%, content costs increased 121%, and total costs rose 40% to £44.3m, mainly from scaling direct business and content investment.

• Cash balance at period end was £28.4m, with no external debt.

• Cash conversion was 63%, impacted by timing of a large client payment; normalized rate over 90%.

Outlook and guidance

• Guidance range widened and revised downward for revenue and adjusted EBITDA due to ongoing indirect revenue declines and low visibility.

• FY26 revenue guidance set at £100m–£107m, Adjusted EBITDA at £15m–£20m.

• H2 expected to see typical cash conversion (80–100%) and continued investment in growth areas.

• Long-term strategy focuses on predictable, repeatable revenues and mitigating indirect revenue headwinds.

• Cost controls, new leadership, and AI-driven process improvements underway to address indirect challenges.