Blinkx shares shed more than a third on profit warning
Shares in internet media company Blinkx lost more than a third early on Monday after the company issued a profit warning.
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At 0943BST the AIM listed company had shed 33.96% to 17.15p, making it one of the worst performers in the index.
Blinkx said in a trading update that while first quarter trading had been strong, early second quarter trading was below expectations and the company now anticipated a loss for the first half of the year.
The online advertising specialist said it now expected first half revenue to be between $85-95m, and an earnings loss between $5-8m.
“Management has taken decisive steps to manage the group's cost structure to reflect the changing revenue and profitability profile of its product mix, and expects a return to profitability, as its core products continue to ramp and offset declines in non-core products,” Blinkx said.
The company, which was transitioning to shift to the core activities of mobile, video and programmatic buying, said core revenues were forecast to grow by 75% while non-core were expected to decline by 60%.
Numis, which had an ‘add’ rating on the stock, put its recommendation under review.
Analyst Paul Richards said in a note to clients it suspended its rating due to uncertainty until interim results in November.
Shore Capital, which does not have a rating on the stock, said it appeared the company is feeling further traffic clean-up efforts in the industry that we have seen so far.
“There is a chance that this has a further knock on effect to others in the industry, however it is difficult to determine at this stage,” analyst Peter McNally said.