Digital Globe's investments pay off with record high revenues

4th Oct 2016 08:38

(ShareCast News) - Digital Globe Services, a provider of digital marketing solutions for large consumer-facing organisations, has recorded its highest ever full-year revenue at $47.8m after investments in both technology and people.The firm has invested in its optimising technology platform dgSMART and its software as a service (SaaS) integration platform dgsAPI, to drive margin improvement in 2017. It also acquired a US based contact centre to expand satellite verticals and to drive profit growth, increasing contact centre agent staff by 20%.The group's revenue rose 19% as a result of continued growth in the firm's core business as well as from new verticals. Revenue from verticals outside of the company's core telecoms and media clients grew to $19.2m from $15.3m in 2015.Revenue from its core customers increased 32% year on year as that segment continued its focus on subscriber acquisition and commercial services.The firm's gross margin compressed in the second half to 27.6% from 32.7% in the previous period. The firm attributed this to increased marketing investment in its core business and new verticals. Gross profit was constant at $13.2m.Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $2.5m from $3m in the previous period.The firm recorded a net loss of $4.9m, down from a profit of $2.6m in the previous period. The firm said this was driven primarily by a non-cash goodwill impairment of $4.1m, write down of $3.3m of aging accounts receivables and $0.8m of revenue reversal according to the firm.Cash on hand at 30 June 2016 was $1.3m, down from $2.2m in the previous period.The firm also launched 7degrees in the second half, a social media advertising services agency, diversifying group revenue.Digital Globe won its first major European telecoms customer which the board feel will generate revenue in 2017.Chief executive Jeff Cox said: "This financial year has been characterised by significant investment in both our technology and our people. We expect the progress made in FY16 to continue into FY17 with a recovery in our margins as our investments bear fruit. We are confident in achieving continued growth and a significant increase in profitability in FY17."Basic loss per share of $0.18 compared to the earnings per share in the previous period of $0.09.The board did not recommend paying a final dividend for the period, which resulted in a total dividend of $0.7m at $0.026 per share paid on 7 April 2016 resulting in a trailing dividend yield of about 4%.The share price fell 21.52% to 36.10p at 0915 BST on Tuesday.