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Snakk Media lifts sales by 58% in 3Q, says high kiwi curbed gains

Snakk Media [NZX: SNK], which matches advertisers with apps and social media, said third-quarter sales rose 58 percent, and would have been even higher if not for the exchange rate with Australia, which accounts for 90 percent of revenue.

Sales were $2.3 million, in the three months ended Dec. 31, including more than $1 million for December, the first month it has exceeded that mark, the Auckland-based company said in a statement. That allowed Snakk to record its first quarterly operating profit, $27,000, which will be reinvested in the business.

Snakk's sales growth was crimped by the high kiwi against the Australian dollar. Before conversion back into local currency it recorded a 77 percent increase in Australian sales, the company said

The company said it is considering a dual-listing on the Australian stock exchange to reflect the dominance of its trans-Tasman market.

"Our sales operations are profitable," Mark Ryan, group chief executive told BusinessDesk in an email. "There are good margins in this business, for every ad we target and send to a smartphone or tablet app, game or site, we clip the ticket. We aim to buy for $1, and sell for $2."

The company listed on the New Zealand stock exchange's small-cap NZAX at 6.5 cents a share, and reached a high of 29 cents in March 2013. Snakk's shares fell 8.2 percent to 11.2 cents today and have fallen 58 percent in the past 12 months.

(BusinessDesk)

More by Suze Metherell

Comments and questions
6

Such a great business that all the big shareholders are bailing out as fast as they can, recently joined by the co-founders.

Selling usually after very positive announcements.

Wonder why.

This has got to be a bubble stock, and how imprudent to tell your clients what your margins are in such a bare faced way.

If it's so profitable (buy at $1 and sell at $2) every media placement agency will be all over this, and the big corporate buyers wont be wearing their agencies running a 100% markup...

Same company which announced to the market that everything was wonderful in January, and that its share price will go up because 2 big sellers had exited - conveniently not telling the market that there were still options being exercised and shares sold, and that its Chairman was selling.

Not to be trusted.

I think Mark and his management team are a very smart bunch of guys.

They have now got $5.5 million revenue under their belts for the past 3 quarters. They also made a modest profit this quarter. If they can clip another $2mil this quarter, that takes them to $7.5mil revenue for the year. How is this a bad thing??

The sooner the co-founders disappear, I think the better. Then this company can start to be judged on its numbers rather than the personalities.

Looking at the company office filings it looks like the Chairman is transfering shares to a charitable trust, not selling outright.

Other major shareholder to have sold got shares / owned shares as a result of the listing process, Sea Dragons - who are in the business of extracting Omega 3 or something are not natural holders of shares in Snakk, and where probably always going to sell.

As for the results they look pretty impressive in terms of growth and to be making a small profit - well done.

No financial interest either way in this, but good to see a company delivering. Fingers crossed they maintain the momentum.

Just a reminder that this company has no debt whatsoever, financed up to 2019 by which time it will either be very profitable or a Xero-styled success and if people actually read Derek Handley's book, they would know he's very into 'making the world a better place'.

Only problem people like me are having is that there is only a limited amount of shares we can actually buy. Liquidity isn't that flash.

What other small advertising firm can say they advertise for: McDonald's, MTV, Pepsi, Sony, Dick Smith, M&M's, HSBC Bank and even Intel?