iSentia shares are getting walloped after dividend cut, revenue and earnings drop

Shareholders have given media monitor iSentia a walloping this morning, sending the stock down 41 per cent after a dividend cut, poor results and subdued outlook.

“Isentia’s board has decided not to pay a final dividend [for FY18],” the group said.

“The capital management decision was taken to conserve cash and provide greater investment flexibility for future growth with priorities including product development and debt reduction.

iSentia earlier paid a half-year dividend of 0.6c and a FY17 dividend of 3.1c.

Full-year results out today were disappointing.

Revenue dropped 11.6 per cent year-on-year, down to $137 million. EBITDA earnings fell 31 per cent to $28.6 million.

And the outlook for FY19 also spooked investors. Revenue guidance was in the “low to mid $120m range” and EBITDA guidance in the “low to mid $20m range”.

The company did however turn the $13.5 million loss of the previous financial year into a $1.3 million profit.

Isentia shares (ASX:ISD) plummeted today after poor results

It has been a tough year for iSentia. Last month, the company announced its CFO James Orlando would be leaving the business. In February its CEO John Croll stepped down.

In 2015, iSentia tried to make a move into the world of content by making a $48 million acquisition of King Content. At the time, Croll said the acquisition was a “great fit”, but in November last year, after iSentia wrote down the acquisition by $39.4 million, “cultural fit” was blamed for its failure.

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In a call with investors this morning, chairman Doug Snedden admitted the FY19 guidance was “disappointing”.

“While this guidance is disappointing, we are taking action to improve the business and drive future growth,” he said.

“The first step today involved the decision not to pay a final dividend, which allows us to conserve cash and provide greater flexibility for investment in product development or debt reduction.

“FY19 will be a challenging year but we believe the measures we’ve put in place during FY18, board and management renewal, sales productivity improvements, cost-out, and action to address copyright provide a solid foundation for future growth.”

iSentia has been contacted for comment.