Isentia shares smoked

Philipp Guelland/Getty Images

Shares in Isentia fell hard after the media monitoring company warned of weak first half earnings due to problems with its content marketing arm.

At the close, the shares were down more than 26% to $2.38.

The company told the AGM today that EBITDA (earnings before interest, tax, depreciation and amortisation) for the first six months of 2017 will be below the first half of 2016.

However, full year revenue and earnings growth will be in the high single digit range.

Part of the problem is the company’s content marketing business, King Content, which it bought last year 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 this year the business lost revenue momentum due to poor decisions on strategy, business development and client retention.

CEO John Croll says the decisions will see content marketing report an EBITDA (earnings before interest, tax, depreciation and amortisation) loss of about $2 million in the first half of 2017.

He says a new organisational structure has been put in place, integrating the King Content sales team with Isentia, and a new chief executive for King Content will be appointed.

The company posted a 23% increase in revenue to $156 million for 2016. Underlying net profit after tax was up 16% to $33 million.

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