LBG Media (LBG) H2 2024 earnings summary

Executive summary

• Pro forma revenue reached £86.2m, up 22% year-over-year to September 2024, with performance 6% ahead of market consensus and strong momentum toward the £200m target.

• Strategic investments in the U.S. and audience growth have paid off, with notable progress in integrating Betches and expanding blue-chip client relationships, including Google, Uber Eats, and Betches.

• The business is well-diversified across direct, indirect, and U.S. segments, reducing reliance on Facebook from 37% to 23% of revenue.

• Global audience reached 503m, up 19% year-over-year, including 143m in the U.S.

Financial highlights

• Direct revenue grew 39% year-over-year to £43.9m, now representing 51% of total revenue, driven by strong client retention and acquisition.

• Indirect revenue increased 6% to £40.7m, with web revenue up 77% year-over-year and now accounting for 45% of indirect revenue.

• Adjusted EBITDA rose 16% to £24.5m, maintaining a 28% margin despite £3.4m in investments.

• Cash conversion improved to 105%, with closing cash at £30.5m and significant improvement in receivables.

• Profit before tax rose 32% to £14.5m on a pro forma basis.

Outlook and guidance

• Double-digit growth achieved in Q1 of the new financial year; full-year 2025 revenue expected to be up 10%.

• Confidence maintained in achieving £200m revenue target.

• Continued focus on expanding U.S. operations, investing in Gen Z engagement, and developing unique IP and technology.

• Operating margins expected to dip to 26% with further U.S. investment, then recover as scale increases.

• U.S. integration progressing well, with a strong pipeline and further strategic M&A opportunities.