ASX-listed media intelligence provider Isentia has produced a trading update for its shareholders that will make them question why they invested in the company in the first place.
Following its decision to axe the King Content brand in August due to its poor financial performance of late, the trading update signalled that Isentia will exit the content marketing space entirely and refocus on its core business.
“Our decision regarding King Content has been resolved and management will ensure a smooth and orderly transition for clients and employees,” Isentia CEO and managing director John Croll said.
“Going forward, our focus remains on the core operating business of Isentia.”
Isentia saw profits fall 24 per cent to $24.7 million last financial year, largely due to a $39.4 million write-down of King Content.
Speaking at a media briefing in August following Isentia’s announcement to axe King Content, Croll said the acquisition of the business was more a question of bad luck than poor due diligence.
Isentia also revealed in its latest trading update that it has reached a settlement with Meltwater after taking it to court for allegedly breaching print monitoring contracts.
As part of otherwise confidential settlement terms, Meltwater, without admitting any further liability, has agreed to permanent orders to restrain them from engaging in conduct which was the subject of Isentia’s claims, according to the trading update.
“Today’s settlement is a good outcome and we are pleased that this matter has been successfully concluded,” Croll said.
Isentia informed the market that due to soft first quarter results for the 2017-18 financial year, the company’s revenue guidance is between $133 million and $138 million for FY18 – down between 11 per cent and 14 per cent from FY17.
Expenses before interest, tax, depreciation and amortisation are expected total between $32 million and $36 million for the current financial year – down 13 per cent to 23 per cent from FY17.
To address revenue growth and churn, Isentia noted it has reorganised its sales team to concentrate on customer retention and growth, and placed a renewed focus on its premium products.
“The decisions by board and management today have been made with the key objective of supporting the core operating business that continues to generate strong recurring cash flows servicing a deep pool of high-quality subscription clients across our markets,” Croll said.