engage: BDR Ltd Reported EBITDA Uptick by 85% In April 2019; Q2 Outlook Bullish

engage: BDR Ltd Reported EBITDA Uptick by 85% In April 2019; Q2 Outlook Bullish

A digital media and advertising company, engage:BDR Limited (ASX: EN1) on 13 May 2019 updated the market with its preliminary April 2019 financial results. In April 2019, the Company reported an improvement in the EBITDA by 85% as compared to its previous corresponding period.

The core business of the Company reported an EBITDA of A$56,000 in April 2019. The management of the Company noted that there was an additional improvement at the end of April 2019 to reduce the operating expenses for better performance in May 2019 and onwards.

The net income includes other expenses like interest expense, tax and non-cash items depreciation, amortization and intangible asset impairment.

Non-Recurring Costs USA Company 

The management of the Company made reductions in several expenses for the core business by April 2019 end. The reduction was specifically in the areas of technology and payroll costs. The engineering team of EN1 was able to provide a resolution to do away with the 3rd party infrastructure provider. Thus, the Company will be able to save A$20,000 on a monthly basis. Other than this, the Company also reduced the payroll expenses by A$25,000 through cost-saving exercises.

The Company has plans to reduce the expenses across most categories throughout the year.

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Non-Recurring Costs AU Listed Company

In April 2019, the management of the Company witnessed several one-time expenses due to specific corporate development activities during the period. However, the management does not expect the one-off costs to repeat as witnessed in April 2019. Hence, the Company expects an expense reduction of A$21,000 in May 2019.

AdCel:

Throughout this year, the StartApp and numerous other integrations are expected to go onstream. With the ram up of revenue the company expects its cost-base to remain flat as higher revenue would deliver profitability and robust operating margins. The Company acquired AdCel in July 2018. However, it was not consolidated in the Company’s financials before July 2018.

Consolidated Cashflows in April 2019:

In April 2019, the preliminary consolidated receipts and cash outflows were about A$1.41 million. There was a net cash outflow of A$1.42 million through the operating activities of the Company. Around A$250,000 was deployed for the publisher reactivations in April 2019.

Q2 Outlook:

Based on the preliminary financial results of April 2019, the management is positive about the Q2 outlook and the management expects it to be the most successful quarter the Company has delivered in many years. For the balance of the year, the cost reduction is in effect. As the Company has a fixed cost structure, it expects that when the revenue scales up, the operating expenses will remain consistent.

The Company expects that the revenue from the second group of publisher activations to be around A$10.7k per day. The second group consist of 6 publishers and will go live within a week and within a month, the entire list will go live.

In May 2019, EN1 reported three new customers who joined its IconicReach platform. The company now has plans to integrate YouTube influencers as a part of their marketing strategy.

The EN1 stock has generated an outstanding YTD return of 126.67%. The shares of EN1 closed the day’s trade at A$0.032 (as on 13 May 2019), down by 5.882% as compared to its previous closing price. EN1 holds a market capitalization of 17.4 million and approximately 511.76 million outstanding shares.


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