City round-up: LBG Media; PRS REIT; Sosandar
Manchester-based LadBible owner, LBG Media, finished its financial year strongly and is confident of maintaining the momentum into the current fiscal year, it said today.
Revenues for the year to December 31, 2022, rose 15% to £62.8m, although pre-tax profits shrank by 10% to £7.3m. Cash and cash equivalents also fell, by 15%, to £29.3m which was impacted by IPO-related liabilities of £2.6m, deferred Australian tax of £1.1m, and investing in two small acquisitions, worth £2.2m.
The group said its global audience during the period rose by 39% to 366 million, while its content views soared by 56% to 98 billion.
During the reporting period the group reduced staffing costs by making 43 redundancies. It also opened an office in New York City.
So far, the 2023 year to date performance has been positive, continuing the strong momentum seen in the fourth quarter of 2022, and the group remains on track to deliver external expectations of £69.3m in revenues and EBITDA of £19.4m, for the full year.
Chief financial officer, Tim Croston, has notified the board of his intention to retire later this year. He will step down with immediate effect, however he will remain in the business for a number of months to facilitate a smooth handover to his successor, Richard Jarvis, who joins from Chester-based GB Group, where he was group commercial finance director. He joined LBG Media on April 11, 2023.
Group 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.”
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.”
Russ Mould, investment director at Manchester investment platform AJ Bell, 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.”
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PRS REIT 5,000th rental home
PRS REIT, the Manchester private rented sector housing group, has completed its 5,000th build-to-rent home.
The estimated rental value (ERV) of the 5,010 completed homes in the group’s portfolio is £52.7m per annum, 16% higher than a year ago. Once the delivery programme has been completed, the number of homes in the portfolio will increase to approximately 5,600 homes with an ERV of circa £58m per annum.
The 5,000th home is a three-bedroom house located on the company’s Brookfield Vale site in Blackburn, Lancashire, comprising 154 high quality two-, three- and four-bedroom rental homes.
PRS REIT said the performance of its portfolio remains extremely strong. Occupancy at March 31, 2023 stood at 97%, with 4,860 of the 5,010 completed homes occupied. A further 65 homes were reserved at that date for applicants who had passed referencing and paid rental deposits, giving an occupancy rate of 98%. Like-for-like rental growth on stabilised sites was strong at 5.7% on an annualised basis.
Affordability remains strong, with average rent as a proportion of household income at circa 25%, which is significantly less than Home England’s limit of 35%.
Rent collection – defined as rent collected in the period relative to rent invoiced in the same period – was strong at 101%. Total arrears continues to be low at £0.7m at March 31, 2023, which is around one per cent of annualised ERV on completed units.
Non-executive chairman, Steve Smith, said: “The completion of the 5,000th rental home marks a significant milestone for The PRS REIT and demonstrates our success in building the largest portfolio of high quality, build-to-rent, single-family rental homes in the UK over the last six years.
“We are in the final phase of the current delivery programme and expect to complete at around 5,600 homes with an estimated rental value of c.£58m per annum once fully let.”
He added: “Demand for our homes remains high, as our consistently strong performance measures, including occupancy levels and rent collection, show. This reflects the desirable nature of our houses – built to high quality specifications and located close to good schools and public transport links – as well as their affordability for families. Average rent is about 25% of a household’s gross income.”
Miranda Cockburn, an analyst with investment bank Panmure Gordon, retained their Buy rating on PRS REIT’s shares after today’s announcement, saying: “Following its interim results last month, PRS REIT has announced today that it has completed its 5,000th home and is on track to deliver a further 516 homes which will generate additional ERV of £5.2m pa over and above the ERV of the 5,010 completed homes of £52.7m pa.
“Operationally the portfolio continues to perform well with steady, high like-for-like rental growth of 5.7%, occupancy at 98% (including reserved homes), rent collection over the past six months at 100% and low arrears of £0.7m (c.1% of the ERV). Whilst the shares have recovered a little from their recent low, they remain down seven per cent year to date and continue to trade at a wide 30% discount to NTA. We retain our Buy rating.”
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Ali Hall and Julie Lavington
Sosandar, the Wilmslow-based online women’s fashion brand, issued a trading update for the year to March 31, 2023, today, which it said revealed a milestone year, delivering revenue up 44% year on year and a first full year of profitability.
Revenue of £42.5m was up on the £29.5m figure the previous year, and the business has delivered a pre-tax profit of at least £1.6m, a substantial positive swing of £2.2m versus a £0.6m loss in fiscal year 2022.
The number of orders increased by 22% to 620,977 of which 148,382 were from brand new customers and 472,595 were from existing customers.
Average order value was up by eight per cent to £97.27 (FY22: £90.39), and the number of active customers increased 19% to 264,832. Average order frequency increased three per cent to 2.34 times per annum.
The performance of Sosandar’s third party partners continues to go from strength to strength, boosted by the successful launch with Sainsbury’s in the fourth quarter with significant combined contribution expected in the current financial year and beyond.
There has been accelerated investment in strategic growth initiatives in the final quarter of the financial year to capture further market share focused on operations, including key hires, the technology platform and an international strategy.
Net cash stood at £10.5m as at March 31, 2023 (£4.2m as at September 30, 2022), following the successful equity fundraise of £5.5m of net proceeds in February.
Joint CEOs, Ali Hall and Julie Lavington, said: “We are delighted to be reporting a milestone year. Sosandar has grown from a true start-up business just six years ago to a brand which is delivering multimillion-pound revenue and is profitable.
“This growth has been delivered against a backdrop of highly challenging macro-economic conditions and our sustained performance against this backdrop is testament to how well our product resonates with our customers. We are incredibly proud to have Sosandar clothes now being sold in the UK’s biggest retailers, and we have now built the infrastructure to start serving our target customers internationally.
“We continue to invest in and expand our product range, offering our customers an even greater selection of on-trend, affordable, long lasting, lifestyle appropriate clothes. We are already seeing strong demand for our fast-tracked ranges of summer occasionwear as well as beach and swimwear.
“In addition, our performance with selected third party partners continues to go from strength to strength and we were delighted to secure a new partnership with another renowned British retailer, Sainsbury’s. This partnership has elevated our strategy from pureplay to an omnichannel brand and will enable us to provide our large but underserved demographic with more opportunities to purchase our unique and diverse products.”
They added: “While the macro-economic environment remains challenging, and we remain highly vigilant, we continue to demonstrate that our differentiated model is capable of achieving sustained profitable growth. We remain confident in the long-term opportunity for Sosandar, as reflected in Q4 FY23 in the acceleration of our investment in the next stage of our development.
“We see a number of opportunities for further growth both on our own site and through our third party partners in the coming months and beyond as we continue to move forward with our objective to make Sosandar one of the largest womenswear brands globally.”
