Sports rights group Perform to cut costs after profit shock
LONDON (Reuters) - Sports rights group Perform (PER.L) plans to rein in costs as it seeks to rebuild trust in the company after a December profit warning sent its shares tumbling by 50 percent.
Perform, which listed on the London stock market three years ago, buys online rights to major sports events and supplies video clips, live action and sports news and data to media groups and online bookmakers.
The company had a reputation as a growth stock, doubling its market capitalization after listing at 260p and embarking on a series of acquisitions, but that image suffered a heavy blow in December when it warned that annual earnings would be significantly below expectations and fall short again in 2014.
That news sent the shares plunging by more than 50 percent in a single session.
"It's about a year of rebuilding trust," joint CEO Oliver Slipper told Reuters on Tuesday, saying that the focus for 2014 is to ensure that costs are kept under control.
"When you have had a disappointment, you need to make sure you deliver," he added.
Revenue grew 37 percent to 208 million pounds ($347.7 million) in 2013 but earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 3 percent to 36.4 million as higher costs and a disappointing advertising performance took their toll.
"The group is on track to deliver full-year revenue and EBITDA growth in line with the board's expectations as revised in December," the company said.
Shares in Perform, in which Warner Music owner Len Blavatnik is the largest investor with a stake of about 40 percent, rose 9.3 percent to 254 pence by 0925 GMT.
"After experiencing growing pains as it tried to balance rapid organic growth with multiple acquisitions, the group now seems better placed to execute in future," brokerage Numis said in a note.
The company's cost base rose by 50 percent to 172 million pounds in 2013 and Slipper said the plan is to limit that to 200 million pounds this year.
Acquisitions have boosted the company's workforce to 1,500 from about 200 over the past few years. The expansion has led to overlaps in a number of areas, with the company running three offices in some cities.
(Editing by Brenda Goh and David Goodman)
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