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engage:BDR bucks market trend: trades higher on strong revenue and earnings

Published 03-MAR-2020 11:29 A.M.


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Shares in engage:BDR (ASX:EN1) opened 10.5% higher on Tuesday morning, and they have now gained more than 30% in the last two weeks.

The company has particularly come under the spotlight since last Friday when it released an impressive full-year result for the 12 months to December 31, 2019.

Today management has provided a trading update and commentary regarding the group’s financial performance in February with a comparative analysis demonstrating significant improvements against the previous corresponding period.

While these figures are subject to audit they make for impressive reading.

February 2020 revenue of approximately $1.7 million was 322% ahead of the previous corresponding period.

The company is also demonstrating strong growth on a month-on-month basis with February revenues ahead of the $1.55 million generated in January.

The increase in income has been accompanied by strong margin improvement with gross profit margins for February standing at 41% compared with 36% in January.

Engage:BDR products

EBITDA positive in February

From a profitability perspective, it was encouraging to note that February was EBITDA positive.

This is the best measure of earnings for a company such as EN1 as it excludes non-cash items and accurately reflects the company’s operational performance.

Management took the opportunity to note that the advertising industry traditionally generates between 65% and 70% of its revenues in the second half year, and this was case in 2019.

With similar revenue seasonality anticipated in 2020, it would appear that the company is poised to deliver a strong full year result.

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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

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