Audioboom: Profitability In A Podcast Epidemic
a major global podcasting platform, remains at the heart of a massively growing industry, the so-called podcast ‘epidemic’. Podcast’s sheer popularity, establishing them as a growing cultural phenomena, provides a certain level of reassurance to the adventurous investor.
Director’s Holdings
Since September 2018, directors of Audioboom have made several share purchases increasing their stake in the company.
On 25 October, Non-Executive Director, Roger Maddock, purchased a total of 553,110 shares. Maddock now holds 21,500,000 shares, representing approximately 1.83 % of the Company's issued share capital. The same day saw Michael Tobin, current chairman and former ‘maverick’ CEO of former Telecity Group PLC, increase his position by 544,881 shares.
The most recent transaction took place on 21 November, where Tobin again increased his position by 1,600,000 shares. His overall hold now stands at 4,659,900 shares.
Why is this important?
Director holdings are significant to how institutional investors interpret the next stages of a company’s development. The director’s shareholdings reflect a key alignment tool between the company and its investors.
In BOOM’s case, the recent share purchases are being considered a promising investment pointer. The significance of the holdings further suggests that the company remains on target to be cash-flow positive in 2019.
The director’s acquisitions coincide with a critical shift in the company’s position from earlier this year, following an abortive transaction with Triton Digital. By contrast, the board’s financial development in the past few months seems indicative of a steady growth curve.
“Moving Forward”
BOOM’s trading update on 4th October showed record revenue for Q3 2018 in excess of $2.4m in spite of stating that revenue and EBITDA for the 13 months ending 31 December 2018 would be below current market expectations.
In the past months, what the company has lost in inventory it has made up for in advertising, distributions and membership - all of which have collectively demonstrated an increasingly higher yield. The report showed further impressive growth demonstrated across all existing KPIs, with a Total H1 2018 unique file requests of 372 million compared to its previous total of 325 million in H1 2017.
Furthermore, BOOM stated that: “The Company now believes that it has put the challenges associated with the abortive Triton Digital transaction behind it and continues to grow the business at significant rates on all metrics.”
Alongside this, their recent high profile signings with Formula 1® and Jonathan Ross, as well as original content publications such as crime story “Dead Man Talking” is reflective of the rapid turnaround period of the company’s resources since the first half of 2018.
Latest Update
BOOM’s latest progress report, released this morning, reflects a consistency with the October 4 report. It positions the company in line with management expectations with full year results for the 13 months to 31 December 2018.
The report revealed that Audioboom Originals Network’s, “Dead Man Talking” has received nearly 1 million downloads since its launch in October, making it the company’s fastest growing show and generating a record return on investment.
Rob Proctor, Chief Executive Officer of BOOM commented, “We have been delighted by the listeners’ and industry’s response to the AON titles, especially Dead Man Talking, which has received almost 1 million downloads in seven weeks since its launch on 2 October.”
The response to DMT has prompted the company to announce three more shows to be added to the slate in Q1 2019. The launch will be part of the Company’s strategy for expanding and sustaining AON further.
Looking ahead, Proctor stated:
“AON and co-production shows are a key focus for next year, which we anticipate will allow us to further grow gross margins, and potentially develop valuable IP which we may be able to expand into TV and film production in conjunction with our partners into 2019 and beyond."
Essentially, it is a waiting game as we come into 2019. For now, future profitability has been forecasted in light of the company’s ongoing director holdings and latest progress report. There is an underlying message to investors: BOOM is on track to surpass its rehabilitation period.
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