Crossrider's revenues and adjusted EBITDA fell by 29.6% and 36.4% respectively in the first half following the board's decision to cease the investment in the web apps business at the beginning of the year.
Excluding the web apps business, the app distribution division and the media division showed consistent growth. The app distribution segment results grew from $4.1 million to $5.9 million and the margins improved from 21.5% to 32.3% compared to the first half of 2015. The media division's segment results improved from $1.5 million to $1.7 million and margins improved from 21.6% to 23.2% compared to the first half of 2015.
Despite the restructuring cost, the share buyback and deferred consideration paid in respect of previous acquisitions, the froup had $70.2 million in cash and no debt at the end of the period. Adjusted cash flow from operations was $4.1 million in the period and this represents a cash conversion of adjusted EBITDA of 119%.
- Revenue of $28.7 million (H1 2015: $40.8 million), down $12.1 million of which $11.9 million is due to the expected decline in the Web Apps and License segment
App distribution segment result increased to $5.9 million (H1 2015: $4.1 million)
- Media segment result increased to $1.7 million (H1/2015: $1.5 million)
- Adjusted EBITDA in line with management expectations at $3.5 million (H1 2015: $5.5 million)
- Adjusted basic EPS at 1.8 cents per share (H1 2015: 2.6 cents per share)
- Adjusted cash flow from operations at $4.1 million (H1 2015: $5.0 million) representing strong cash conversion of adjusted EBITDA of 119% (H1 2015: 90%)
-Cash balance at the end of the period of $70.2 million to execute new strategic plan
Chief executive Ido Erlichman said: "The first half of 2016 has been a period of transformation for Crossrider. The restructuring programme yielded immediate increases to profitability and cash flow. I am now pleased to present the new company structure and strategy which the Board believes will deliver long term value for shareholders.
"We believe the transition to a digital distribution and product hub will be a natural and profitable progression for the Group. The transition will commercialise the Company's existing expertise in driving online traffic and the monetisation of big data.
"Like many online companies, Crossrider, is maturing and finding the best way to utilise its technology and online presence. The Company has already seen a third party product increase its revenue by 125% by launching on our App Distribution platform. This initial proof of concept gives us the confidence that we are well positioned to seize our market opportunities."