Isentia posts a loss, its shares get crushed

A melting ice cream made by US pop sculptor Desire Obtain Cherish. Sam Yeh/AFP/Getty Images

Shares in Isentia fell hard after the media monitoring company posted a full year loss of $13.52 million after writing down the value of its content marketing arm.

A short time ago, the shares were down more than 10% to $1.55, a long way from the 12 months high of $4.14.

The King Content business was fully written down by $39.4 million. Without that, underlying profit was $24.7 million, a fall of 24% on last year.

Revenue was flat at $155.13 million, down just 0.6%.

On content marketing, revenue fell 30% to $14.4 million with an EBITDA (earnings before interest, tax, depreciation and amortisation) loss of $4.4 million compared with a profit of $3.6 million in 2016.

The company bought King Content in 2015 from founder and CEO Craig Hodges. The deal was worth $48 million, depending on hitting a number of targets over five years.

In 2016, content marketing represented 7% of iSentia’s earnings but the business lost revenue momentum due to poor decisions on strategy, business development and client retention.

Today the company declared a final dividend of 3.08 cents a share, 50% franked, bringing the full year payout to 6.18 cents a share.

“FY17 was a disappointing year with the business performing below expectations, particularly at King Content,” says CEO John Croll.

“The board and management remain confident in the market positioning of Isentia and we have implemented initiatives to improve performance across the business.”

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