Tremor International Ltd

Tremor International Ltd. (LON: TRMR) is an AIM-listed international leader in the advertising technology business. It offers digital advertising services, taking maximum advantage of the latest video, native, and display technology to reach users for every app, service, and brand. The company’s business is spread across the United States and Canada, Europe, Latin America, Asia-Pacific, and India, with headquarters located in Israel.

On 31^st March 2020, the company will announce its results for the year ended 31 December 2019.

Trading Update (as on 29^th January 2020)
The company provides a trading statement for the year ended 31 December 2019. Led by the merger with RhythmOne Plc, 2019 was a transformational year for the company. For the full year ended 31 December 2019, the company expects to report adjusted EBITDAin-line with expectations at $60 million.From this, the company attained revenue of $325 million. On 31^st December 2019, the company’s net cash position will be more than $75 million. This robust cash position was registered, post the 25 million US dollar share buyback programme in 2019 and data pre-payments of $5 million for 2020. In January 2020, the company completed the acquisition with Unruly from News Corp.

Share Price Performance

Daily Chart as at January-29-20, before the market closed (Source: Thomson Reuters)

Tremor International Ltd shares were trading at GBX 208.68 at the time of writing before the market close (at 12:43 PM GMT) on 29th January 2020 and were up by 14.8% versus the previous day closing price. Stock 52 weeks High and Low are GBX 259/GBX 73.20. The group’s stock is reflecting the higher volatility as against the benchmark index based on the company’s beta of 1.89.

Conclusion
Despite the continuing fragility in the business performance, the group’s board mitigated the risks by the initial contributions from RhythmOne division.In the second half of 2019, the company will deliver favourable results. In terms of seller trust, the RhythmOne division is leading the market. The improvement of the self-service capabilities of Tremor Video's DSP is a substantial strategic development to the offering, as the company believe that it will deliver an important progress engine in the group's future development. The company is working in an ever-evolving market in which customisation and audience targeting capabilities, advertisers demand will increase, along with the current AI (artificial intelligence) and machine learning enhancements to the DSP. The company is well-positioned to capitalise on this ongoing progress. The company needs to manage its operating and non-operating cost-effectively. The company based on its strong order book, expects strong operational and financial performance in the coming years with support coming from the litigation funding market.

Tremor International Ltd. witnessed a CAGR growth of ~44.73% in revenue over the period of FY14-FY18 while EBITDA recorded a stellar CAGR growth of ~43.16% during the same period.

Based on the above rationale, we have given a "HOLD" recommendation at the closing price of GBX 180 (as on 28th January 2020).

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.