Ebiquity PLC on Thursday said it expects a significant decline in first half revenue and earnings but expects improved performance in the final six months of the year.
The London-based media and marketing consultancy company said revenue is expected to have declined 6.7% to £37.9 million in the first half that ended June 30 from £40.6 million the previous year. This was attributed to large clients who continue to reduce their budgets.
Ebiquity shares fell 29% to 26.87 pence each in London on Thursday afternoon.
With a predominantly fixed cost base, changes in revenue have an ‘acute’ impact on profit.
Interim adjusted earnings before interest, taxes, depreciation, and amortisation, is expected to decline 61% to £2.3 million from £6.0 million last year, compressing the margin to around 6% from 15%.
Ebiquity said: ‘The transformation programme undertaken has enabled the group to develop a substantial weighted pipeline with contractual coverage for over 80% of forecast revenues for FY 2024. Revenues are expected to increase sharply during late Q3 and into Q4 with an associated material uplift in margins, benefiting from the operational leverage within the group, leading to an expected recovery in overall margin for the full year.’
Net debt on June 30 stood at £15.3 million with cash balances of £6.7 million and undrawn bank facilities of £8 million.
Ebiquity anticipates a rise in net debt during the third quarter before returning to the current level by the end of the year.
Chief Executive Officer Nick Waters said: ‘H1 2024 performance has been challenging, however the business has worked during this period to develop a deep pipeline of revenue opportunities which are scheduled to be closed and delivered in H2. As a result, the year will be very much one of two halves. I am encouraged by the anticipated growth in our North American business, where a significant number of opportunities have been identified that are expected to convert to stronger second half revenues.’
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