- 2013 EBITDA to be 'significantly' below forecasts
- Share price losses over half its value
- Advertising and Sponsorship performance deteriorated in Q4
Digital rights firm Perform Group has warned that its 2013 full-year revenue will be below previous expectations, pushing earnings 'significantly' below forecasts.
The warning, which also revealed results for 2014 are expected to miss expectations, more than halved the value of the company's stock following the release of the announcement late Thursday morning.
Oliver Slipper, Joint Chief Executive Officer, said: "We are disappointed with the performance of the business in the fourth quarter against our expectations and as a consequence this has an impact on our outlook for 2014. Whilst the issues we have experienced in the second half of 2013 are unsatisfactory, as a management team we are fully committed to continuing to grow Perform."
The group said full-year revenue would be around 6% below its previous prediction, with annual year-on-year (YOY) growth expected to be above 35%.
Fourth quarter revenue had been expected to account for a third of the full-year total and around 50% of the adjusted annual earnings before interest, tax, depreciation and amortisation (EBITDA), however the Advertising and Sponsorship performance deteriorated during the quarter, with growth below expectations across several markets, in particular Germany and the US. The performance by Content Distribution was also lower than expected.
"This poor performance has primarily affected display advertising revenues where the forward visibility of such revenues is typically less than one month," Perform explained.
Looking ahead to 2014, the group now expects full-year revenues to grow more than 20%, but slower than it originally expected, with annual revenue around 6% beneath the company's previous expectations. The majority of this revenue shortfall will directly impact adjusted EBITDA, it said.
Divisionally, the company has significantly downgraded its revenue estimates for display advertising, with YOY growth now anticipated to be around 40%. The 2014 Watch&Bet renewal process is expected to deliver like-for-like revenue growth for that business of around 10% for the full year 2014. Overall, Content Distribution revenues are expected to grow YOY by around 20%.
The full-year cost of sales and overheads for 2014 are expected to be around 7% higher than the board's previous estimates. The increase will be split across rights, staff and production costs, in part due to slower than anticipated integration of acquisitions.
"A major cost review exercise is being instigated across all areas of the business to drive acquisition synergies and cost savings, in particular in the management, technology and operations functions. The full details of this will be outlined at full year results," Perform added.
The share price plunged 54.57% to 194p by 13:35.