XLMedia has continued to feel the impact on its corporate trading of Google’s “manual ranking penalty,” but remains positive about its goal of achieving “a material recovery in financial performance in 2021.”
The affiliate marketing publisher released its 2020 interim statement (period ending 30 June), outlining that the cumulative effects of COVID-19 and Google ranking penalties resulted in monthly sales running “approximately $2 million behind expectations.”
XLMedia reported revenue of $27.7 million during H1, down 35 percent from $42.5 million in the same period last year, which was largely in line with July ‘s estimates. XLMedia clarified that both the aforementioned effects and the closure of its remaining media company’ were behind this.
Stuart Simms, XLMedia’s chief executive officer, commented: “Our business has endured a number of unforeseen challenges during 2020 but, as we enter the second half of the year, I believe we are seeing signs of recovery in some key areas.
“These green shoots, coupled with a detailed and diverse plan to mitigate the impact of the Google manual ranking penalty, give me and the Executive team confidence we can enter 2021 with significant positive momentum and enhanced levels of control.”
Operating headwinds saw the gross income of XLMedia’s H1 2020 drop by 42 percent to $16.1 million , down from $28.8 million.
Meanwhile, adjusted EBITDA was $5.1 million in the first half of 2020, reflecting 73 percent of the $18.6 million amount for 2019, which XLMedia completely attributed to its drastic decline in sales.
XLMedia clarified that the January Google deranking, unlike some of its rivals, stopped the casino division of the company from being able to take full advantage of the online casino and gaming industry-wide uptick.
XLMedia expressed concern about the strong indications of Covid-19 ‘s second waves across its core territories in its findings, which may lead to more constraints on its personal finance and sports divisions.
Simms added: “The second half of the year has started positively with much of the global sports programme being reopened and compressed into a couple of months, an uptick in Personal Finance activity and the stabilisation of the Casino vertical.
“However, there are clear signs of second waves of Covid-19 across the territories we operate in, and any tightening of restrictions could impact the recovery in our Personal Finance and Sports verticals; the very recent second lockdown in Israel could also delay elements of the transformation programme.”
However, looking to the future, XLMedia has highlighted its confidence in the organisational improvements that have been introduced over the last year.
XLMedia aims to create a suite of websites fit for the future with the addition of Iain Balchin as Chief Financial Officer, Sarah Clark as Chief Operating Officer and Ken Dorward as President, North America, which will then drive material financial recovery in 2021.