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Audioboom – claims “impressive KPI performance”, but what about cash?

By Steve Moore | Friday 3 March 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Shares in spoken-word audio platform company Audioboom (BOOM) are currently recovering above 3p on the back of a “First Quarter KPI Update” announcement. Hmmm, let’s take a look…

The company firstly notes “total available ad impressions grew from 128.6 million in Q4 2016 to 304.2 million in Q1 2017”, with “year-on-year growth of 429%” – and following is a 231% year-on-year rise in ‘unique file requests’, though 149 million compared to 145 million in Q4 2016.

Finally is that “Q1 2017 revenues will exceed those of Q4 2016 (£630,000), providing another quarterly record. The company is well placed to meet its revenue targets for 2017, with over £2 million already booked for advertising campaigns”.

This sounds encouraging – and the company also notes “significant progress” in direct cost management and that it “has seen a significant swing in UK media agency attitudes towards trying and buying podcast advertising”.

However, I remind that as recently as December it warned of a loss “greater than market expectations”, is on bailout funding and has explicitly stated “it will consider further financing options this year”.

There does look to be some more encouraging trading progress now (the December profit warning included “2016 revenues are expected to exceed £1.3 million”), but the balance sheet position (and related-party transactions) suggest continued caution. I’ll continue to monitor, but for now continue to avoid.

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