- Online video search specialists blinkx reported, as previously highlighted in its Oct 14th Trading Update, 1H FY11 revenue up more that 100%YoY at $27.4m. Gross profit rose 109%YoY to $17.7m (DSCE $16.9m). Operating profit was $2.0m (DSCE $1.62m) compared with an operating loss of $7.4m for 1H FY10. PBT was $2.0m (DSCE $1.86m), compared with a loss before tax of $7.3m for 1H10. As previously indicated, blinkx generated cash in the half, adding $2.3m, with a resulting closing balance of $16.9m.
- The company reported an Average Daily Search run rate “during the period” of 31.6m. We note the wording of this statement. blinkx has previously reported average daily searches for the end of the period; for example at FY10 it reported “22.6 m searches per day in March 2010”. The comparable figure for this key metric reported today, for the half year, was 13.1m (i.e. the average of 8.4m in Mar’09 rising to 17.4m/day by Sep’09). Although at this stage conjectural, (DSCE) we note, therefore, that to achieve an average rate of 31.6m searches per day for the half as a whole would require evolution from the previously-reported 22.6m in Mar10 to a figure nearer 40.5m/day by Sep’10. If correct this figure would be ahead of our March 2011 target of 36.5m in the month of March 2011.
- blinkx reported average deal size for video advertising bookings up 40% from the 2H10. It noted new premium content partnerships, including the BBC, Bloomberg and AccuWeather and progress in establishing entrypoints in the mobile market.
- blinkx also today announced a partnership with Amino Communications AIM-listed AMO), developer of IPTV and hybrid/OTT devices and solutions. It states: “Under the terms of the partnership, Amino and blinkx will develop an integrated search, recommendation and personalization solution powered by blinkx technology to be deployed on Amino’s hybrid/OTT settop boxes, including the award-winning Amino Freedom, which brings broadcast, on-demand TV, open Internet and local content together in a single device”. Amino is based in Cambridge; blinkx, following its roots in Autonomy [AU., NR], has Cambridge-based R&D facilities.
- Overall, these results are slightly ahead of our estimates and indicate that blinkx advertising-driven earnings model is functioning well. The most intriguing feature, an in indicator of the momentum of growth, is the video searches per day metric. Our “Buy” stance is reiterated.