The Group is on target to reach consensus' Adjusted EBITDA forecast of £16m, up from last year's £1.4m.
Companies: Rhythmone
RhythmOne's (LON: RTHM) has released a trading update for H1 18 which has reassured investors the Group's recent acquisitions and swing to profit are on track.
Management of the cross-device advertising platform has said performance for H1 18 is line with its expectations, with Revenues of £112-£114 expected to be reported in the interim results.
This figure includes Revenues from the Group's recently acquired Perk, Inc and RadiumOne, while the Group is expected to finalise its purchase of YuMe in early 2018, which was announced in September.
Management has focused on building a scalable and profitable business, reporting a "significant rise in volume of 124% year-on-year" and an increase in Gross Profit margins to 38% compared to 35% in H1 17.
Shares were trading up 3% to 317p immediately after the release.
The Adtech industry is one that has been highly fragmented outside the likes of Google and Facebook, with RhythmOne and Taptica leading the way as companies who are making acquisitions to help consolidate its operations.
READ: 3 UK stocks exposed to the shifting Adtech landscape.
Both Singers and Panmure put out research notes off the back of the Group's announcement, with Singers note saying:
"The shares have been drifting off during the YUME acquisition process. We expect the shares to recover as the process nears completion (due early 2018) and investors get confirmation the Company is tracking towards the delivery of the critical leap in profitability this year."
Panmure stated:
"There are a lot of moving parts in the numbers this year due to the 3 meaningful acquisitions they have made in CY2017. YuME is expected to close in CYQ1 2018. We are not changing any of our forecasts at this stage. The market will want to see the cash flow and the company delivering on its acquisitions.
We retain our BUY and 770p price target."
RhythmOne is a clear industry leader, ranking #1 internationally and #2 in the US in the Global Seller Trust Index (GSTI) run by Pixalate, a data intelligence platform. Comscore rank them number four behind Google, Facebook, and Verizon/AOL for volume.
