Advertising platform XTD scores deal with Caltex petrol outlets, shares jump
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Digital advertising group XTD Ltd (ASX:XTD) had some positive deal flow for the market this morning, announcing a distribution deal with petrol retailer Caltex.
Under the terms of the deal, XTD subsidiary MOTIO will get exclusive advertising rights across Caltex’s in-store screen network.
The network is operated by a separate company called Engagis, and comprises more than 1,000 digital displays across 500 Caltex convenience stores.
XTD called the contract an “important milestone” for MOTIO, which launched last month. XTD CEO Adam Cadwadaller said the screen network provided the ideal vantage point for MOTIO’s sales team to drive traction with targeted advertising strategies.
“This, combined with anonymised customer data, enables MOTIO to offer tactical, audience-based campaigns that match true consumer behaviour,” Cadwadaller said.
Shares in XTD jumped more than 20 per cent on the back of the announcement, moving back towards 2020 highs at around 3.8c in morning trade.
The deal is structured on a five-year term, and the onus will now fall on MOTIO’s sales team to sell media strategies using the in-store network to brands and advertising agencies.
The company will receive commission on a per-sale basis, and XTD said the deal was expected to increase revenue “by a minimum of approximately 10 per cent over the next 12 months”.
Based on XTD’s full-year revenue in the 2019 financial year of ~$3.14m, that estimate amounts to around $300,000.
Shares in IncentiaPay (ASX:INP), which owns the digital Entertainment Book platform that offers consumer deals to members, also rose strongly after the company announced it had secured additional debt funding facilities.
Lender Suzerain extended the limit of its original loan by $4m to $9.825m, while a further $1.2m facility was approved.
IncentiaPay also said that as lockdown restrictions were relaxed, the company “has begun to see a gradual increase in its cash inflows across its Entertainment Membership product, but remains vigilant in managing austerity measures”.