The key elements of the H117 figures are the strong growth and margin improvement in the core media branding business and the return to profit at Tradedoubler. The latter’s consolidation has lifted Reworld Media's (PA:ALREW) half-year revenues by 23% over H116. With the consolidation of Sporever, our current year figures are underpinned and our FY18 forecasts are slightly raised. The strong media brand portfolio, combined with the data and monetisation capabilities of Tradedoubler (30% owned) make the group an attractive partner to advertisers. On a lower cost base, this is translating into impressive earnings growth, not yet reflected in the rating.
Improving margin performance
The continuing progress in audience monetisation, leveraged on the strong brand positioning in the chosen segments, is now clearly starting to show through in the financial performance. The digital media brands showed a very strong performance in the period, with revenues up 40% to €6.6m and EBITDA margins growing from 4% in H116 to 17% in H117. Management’s assessment is that this makes it the fastest growing French media portfolio. Print revenues continue to fall broadly in line with the market, 6% below H116, but careful management of costs enabled the EBITDA contribution to remain flat. As expected, Tradedoubler’s first half net sales were down 11% on prior year in local currency. However, the increased holding/ consolidation means that net sales from Media Performance within the Reworld accounts were up by 137%. EBITDA here has improved markedly as cost has been taken out, moving it from a loss of €0.1m in H116 to a profit of €1.1m in H117.
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