Engage:BDR delivers record June half revenues
engage:BDR (ASX:EN1) has provided a promising trading update for the June half which includes commentary on the company’s financial performance, as well as forward-looking operational observations.
Consistent with EN1’s results, the advertising industry traditionally expects 65-70% of its revenues in the second half of the year (July - December), as experienced by EN1 in 2019 (34%/66%).
Management expects 2020 to produce similar revenue seasonality, as experienced in 2019 and all prior years.
Despite the impact of COVID-19 on the group’s second quarter, the company still delivered the strongest first half in history, eclipsing the previous record by 44%.
First half revenue was just over $9 million compared with approximately $6.3 million in 2019.
The Australian dollar strengthened as EN1’s June quarter monthly revenues improved since April, bearing in mind earnings are generated in US dollars.
Positive early signs in July
Early signs of revenue normalisation include a recent daily revenue peak for the last week of June at $50,000.
Additionally, July’s first 4 days have been stronger than the same period in June.
Commenting on these developments, as well as the group’s outlook, chief executive Ted Dhanik said, ‘’I will note, July is the start of a new quarter and typically, the weakest revenue days are in the first month, so this is an early but a warm-welcomed indicator.
‘’We implemented significant operational expense reductions from mid-March 2020, including employee furloughs, pay cuts in in the June quarter (including CEO, COO, the Board), tech infrastructure expenses, outside contractors, rent, and in nearly every category.
‘’Several new lending programs are being introduced in the US, and our finance team is focused on finding equity-free traditional funding to refinance EN1’s notes.’’