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Media Corporation

  • BY: Andrew Hore |
  • POSTED: 26/05/2010 |

Online advertising and internet portals operator Media Corporation has moved back into profit in the six months to March 2010 and it should have an even stronger second half.

A near-six month contribution from Malta-based online gambling business Purple Lounge and the lifting of a Google penalty on the portal helped to boost the revenues.

Purple Lounge was strong in Scandinavia before it was acquired last October and Media Corp helped it grow in the UK. The whole internet publishing division still made a small loss in the period.

The internet advertising division is also growing strongly. Revenues grew from 1.42m to 1.92m and it made an operating profit of 203,000 after losing money last year. The growth in advertising has come from a number of sectors and there are around 150 different campaigns each month.

Group revenues jumped from 2m to 10.3m in the six months to March 2010. Keeping admin expenses flat helped Media Corp to swing from a loss of 898,000 to a profit of 157,000.

Astaire forecasts full year profits of 1.2m.

The cash balance is moving upwards as well, helped by an increase in creditors. Net cash has increased from 1.7m to 2.3m in the six months to March 2010. Media Corp raised 420,000 from selling shares it held in treasury, which was similar to the cost of the Purple Lounge acquisition. A further 453,000 has been raised from treasury share sales and this cash should be received in June.

This cash can be used to make add-on acquisitions for Purple Lounge. These could be affiliate sites or other gaming brands.

Chief executive Justin Drummond is hopeful that the US market will open up to online gaming. The business used to generate significant revenues from the US before the clampdown on online gaming.

At 2.77p a share, up 0.55p on the day, Media Corp is valued at 7.59m. The shares are trading on seven times prospective 2009-10 earnings.

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