Snakk maintains above-target gross margin in third quarter

Monday 1st February 2016

Snakk Media, which aggregates publishers’ advertising space on mobile devices and matches it to advertiser demand, maintained above-target gross margins in the final three months of 2015, but warned they will probably weaken in the last quarter of its financial year.

The NXT-listed company reported gross margin of 69 percent in the third quarter, taking its year-to-date figure to 68 percent, ahead of the 55 percent target set for the 2016 financial year. The Auckland-based mobile advertising company's click-through rate - the ratio of clicks to the number of times it's shown - was 1 percent in the quarter, and tracking at 0.93 percent in the year to date, against an annual target of 0.95 percent.

"Gross margin for Q3 was stronger than anticipated as Snakk continues to provide mobile advertising technologies into its markets," the company said in its quarterly market update. "We note that historically in Q4 there can be downward pressure on gross margins as opportunities are taken to exceed final-quarter revenue targets."

Snakk migrated to the NXT board from the NZAX board in November, and this month undertook a one-for-20 share consolidation. The shares last traded at 87 cents, valuing the company at $13.7 million. NXT-listed firms provide quarterly updates on operating measures relevant to their business under the market's disclosure regime, which is less onerous than for the NZX's main board.

The company's compensation-to-revenue ratio - which measures permanent full-time staff costs against sales - was 46 percent in the quarter, for a 45 percent rate in the year to date, in line with the 2016 target. Staff turnover was 11 percent in the quarter, below the 17 percent year-to-date rate, and running behind the 22 percent annual target.

(BusinessDesk)

BusinessDesk.co.nz

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