Conclusion of Strategic Review and Trading Update

12 May 2016

XLMedia PLC

("XLMedia" or the "Group" or the "Company")

Conclusion of Strategic Review and Trading Update

XLMedia reaffirms commitment to AIM and reinforces growth ambitions

·     Strategic review reinforced Board's belief in organic growth opportunity and consolidation potential

·     The Board recommits to maintaining a progressive dividend policy

·     Current trading remains strong and continues to track in line with management expectations

XLMedia (AIM: XLM), a leading provider of digital performance marketing services, today announces that further to the initiation of a Strategic Review announced on 26 January 2016, the Board has concluded that the best way of maximising value for shareholders is by remaining listed in London as an independent company on AIM.

Strategic review

Since the Company's IPO in March 2014, the Company has consistently delivered a strong financial performance, diversified its revenue streams across different verticals and geographies, invested in technology and other infrastructure to accelerate organic growth opportunities, completed a number of successful earnings enhancing acquisitions, and returned $21.25 million in dividends to shareholders. 

The Board initiated a Strategic Review to explore how best to maximise value for all shareholders. Meanwhile, the actual performance of the business continued as planned.

On 30 March 2016, XLMedia reported record full year results for the year ended 31 December 2015, delivering a 76% increase in revenue to $89.2 million, an 84% increase in profit before tax to $24.3 million and a 61% increase in dividend per share of $0.05 compared to the prior year.  XLMedia generated $28.4 million of net cash and reported $42.6 million of cash on the balance sheet in the year ended 31 December 2015. 

It is this strong financial performance which underpins the Group's strategic focus and has seen XLMedia establish itself as one of the leading players in the performance marketing arena. As result of the Strategic Review process the Board has concluded that the best way of maximising value for all shareholders is to remain listed in London as an independent company on AIM. Therefore, the Board remains committed to the following growth strategy:

·     to continue to expand the Group's operational reach into new geographies and verticals

·     to continue developing its technology infrastructure that accelerates organic growth and further enhances XLMedia's reputation and competitive edge

·     to execute acquisitions which both strengthen and expand the Group's operational footprint in what remains a broadly fragmented market

Management continues to work to maximise shareholder value by continuing to commit to expanding the Group's core offering through a combination of ongoing investment and product development.  The Group also remains focused on acquisitive growth and continues to evaluate a number of potential opportunities. It is this ongoing confidence that underpins the Company's progressive dividend policy and provides confidence in the near term trading prospects for the Group.

Trading update

XLMedia has maintained its excellent start to 2016 with strong demand for services reported across the Group's geographic footprint. The Group believes that the combination of scale and diversification will continue to support its growth.  The Board confirms that during the first four months of the year, the Group continued to progress according to its plan in existing and new verticals. Furthermore, developments in technology continue to progress well and as planned. Therefore, the Board is pleased to report that current trading remains in line with management's expectations.   

Christopher Bell, Chairman of XLMedia, commented:

"Having now undertaken a very thorough strategic review, the Board has concluded that the best prospects for the business and maximising shareholders' value are though remaining an independent company on AIM.

"We are focused on ensuring we maintain our market leading position, delivering a best in class service to customers whilst attracting the best people in the industry.  Being a quoted company provides the best platform to deliver on that commitment and our recent full year results with record revenue and PBT growth support this decision.

"We look forward to updating shareholders of our continued progress over the coming months."

Takeover Code

As a result of the termination of the Strategic Review, the Formal Sale Process previously announced on 26 January 2016 has now ceased, and the Company is no longer in an Offer Period (as defined in the UK Takeover Code) and, accordingly, the requirement to make disclosures under Rule 8 of the UK Takeover Code has now ceased. 

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