Mirriad Advertising shares tumbled 41.6% to 8.6p in late afternoon trading on Friday after its HY1 revenue was almost halved to £577,000 from £1.1 million year-on-year.
The company attributed its lower revenues to the “seasonal nature of key advertising markets” and its present sales pipeline, with higher revenues projected for HY2.
Mirriad Advertising reported an 85% drop in its China revenues to £123,000 against £820,000, linked to Covid-19 lockdowns and contractual changes removing guaranteed income from the region.
The marketing firm said it aimed to wind down its Chinese operations by the end of its Tencent contract in March 2023, targeting annual cost savings of £1 million after the board decided it was not prudent to budget for the awaited rebound in the country’s market.
However, its US revenues climbed 57% to £418,000 compared to £266,000 in HY1 2021, currently accounting for 72% of total revenue.
Mirriad Advertising confirmed cash of £17.7 million at the end of June 2022 from £29.8 million year-on-year, with year-end cash expected to exceed market expectations on the back of cost savings and lower than expected budgeted bonus provisions.
The company highlighted improvements recorded across all KPIs on supply and demand sides, and its cost control programme, which is set to deliver £2.5 million of total annualised costs savings, with the majority to be achieved in FY 2023.
It added the firm would be leaning into digital advertising in the EU and APAC to reflect initial progress made on the digital front in North America.
“Our positive US momentum is diluted by the disappointing results of our operations in China, stemming from the unexpected length of stringent lockdowns and a challenging macro environment overall,” said Mirriad Advertising CEO Stephan Beringer.
“The decision to make an orderly wind down of our operations at the end of the Tencent contract does not impact our overall route to scale, which is rooted in standardisation and integration with the wider advertising ecosystem and enhancing our advanced programmatic capabilities.”
Mirriad Advertising commented it expected far stronger revenue in HY2 2022 on the assumption of a significantly backloaded revenue profile.
“In our priority markets we are seeing a clear in-content interest surge – moving it from novel consideration to must-have and we expect our revenue-generating activity to be backloaded towards the end of the year, as per industry norms,” said Beringer.
“We are also within the Company’s expectations of cash consumption and cash balance as the whole Mirriad team works to convert our high-quality and varied pipeline at pace.”
