Shares of Ladbible parent LBG Media plc fell as much as 5% on Wednesday morning after it said its 2022 profit before tax fell 10% to £7.3 million and that chief financial 0fficer (CFO) Tim Croston is to retire.
Manchester-based LBG Media said 2022 revenue increased 15% to £62.8 million, boosted by a strong performance in the second half of the year. The firm’s shares recovered towards lunchtime.
LBG Media is the digital media and youth content publisher of Ladbible and other news brands including Sportbible and Tyla.
The Manchester firm went public on the Alternative Investment Market (AIM) of the London Stock Exchange in December 2021 at £1.75 a share, but the stock has since fallen more than 55% to around 77p, giving it a stock market value of about £159 million.
LBG Media said its “global audience” grew 39% in 2022 to 366 million “with 98 billion content views in the period” — up 56% — following “the successful pivot to short form video and further content diversification.”
It said its followers on TikTok grew 72% and it is now the number one “news publisher” on TikTok.
“The group made the difficult decision to reduce its staffing costs in H2,” said LBG.
“This involved restructuring the business, including the redundancy of 43 employees. We continue to be well placed to continue to deliver on our strategy in the future.”
LBG Media said CFO Croston will step down with immediate effect but will remain in the business for a number of months to facilitate a smooth handover to his successor Richard Jarvis, who joins LBG from GB Group plc, the AIM-listed digital location, identity and fraud prevention software experts, where he was group commercial finance director.
In its outlook, LBG said: “2023 year to date performance has been positive, continuing the strong momentum seen in Q4 2022, and the group remains on track to deliver external expectations for the full year.”
AJ Bell investment director Russ Mould said: “It might not want to present it in these terms but the online publisher of LADbible specialises in clickbait and it is very good at what it does.
“The company is heavily focused on social media and video streaming platforms and has an agreement with Facebook to share revenue from in-video adverts on the platform.
“It is still waiting for other platforms like TikTok, Instagram and Snapchat to develop a monetisation model for third parties.
“Offering advertisers access to the hard-to-reach 18-34 demographic helps drive advertising revenue. However, the company is not immune to wider economic trends and earnings fell in 2022 as advertising spend dropped.
“Whether the laddish brand will remain relevant for the next generation is open to question and the company may have to adapt to survive.
“Opportunities for the business include building out the brand in the US and growing its LADnation research panel to offer advertisers more data and deeper insight.”
LBG Media CEO Solly Solomou said: “We have made continued financial and operational progress in 2022. H2 was particularly strong, delivered amid a challenging backdrop, with both our core revenue streams demonstrating the resilient nature of our business.
“LBG is well positioned to capitalise on the fast-growing digital media market. We have a diverse range of brands catering to the hard to reach 18-34-year-old demographic, have expanded our capabilities, with our survey platform LADnation forming an increasingly key part of our offer, and we are taking advantage of the significant growth opportunity that the US market has to offer.
“We ended 2022 with a great deal of positive momentum, as evidenced by our record direct revenue performance for Q4, and with this momentum continuing into 2023 I am excited by what lies ahead for the business.”
LBG Media chairman Dave Wilson said: “The board would like to thank Tim for his great contribution to the group’s development in the important period in the years up to and since its successful IPO in late 2021.
“We look forward to continuing to work with Tim during the handover to his successor. I’m pleased to welcome Richard to the group who I know well having worked him with previously at GB Group plc.
“I’m confident that with his skills and experience of both international growth and public markets, we will have a worthy successor to Tim.”