Crossrider’s update for the first half of FY 2017E says that trading has been in line with management expectations and strikes an upbeat tone on future performance. The first half reflects continued delivery on Crossrider’s expansion strategy and the period includes three months’ contribution from CyberGhost. Crossrider expects to report revenues of around U$29.7 million for the period – equivalent to 43% of our current full year estimate of U$68.6 million. It also anticipates adjusted EBITDA for the six months of around U$3 million which compares to our full year estimate of U$8.3 million. Building on the performance in the last financial year, the App Distribution business has performed strongly and the group as a whole has demonstrated good cash conversion again. We note that there will be a full six months contribution from CyberGhost in H2 and make no changes to numbers at present. We shall address estimates when more detail of the first half performance is available with the interim results announcement in September.
The core App Distribution division is expected to report revenues of U$20.6 million for the first half of Crossrider’s current financial year (H1 2016: $18.2 million). This reflects the expansion of Crossrider’s B2C cyber security software business – including the March 2017 acquisition of CyberGhost, a Cyber Security SaaS solution business.
The acquisition of CyberGhost expanded Crossrider’s position in the growing personal privacy and security market. The solution is becoming a key component of personal online security. It protects users' personal information when browsing the internet. It prevents external parties from monitoring activity and personal data and allows users to keep their online activity confined to their mobile and desktop devices.
The trading update notes that CyberGhost continues to perform ahead of expectations, “proving the capability of Crossrider’s distribution platform in driving customer engagement”.
The Media division’s half year revenues are expected to be around U$7.4 million versus U$7.5 million reported in H1 2016.
Cash conversion for the first six months remained good at around 90%. Cash of U$67.9 million as at 30 June 2017 compares to U$72.1 million six months earlier following U$6.4 million of acquisition expenditure during H1 2017. Crossrider has no debt.