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blinkx opens a few eyes

Shares in blinkx (BLNX:AIM) shot up by 110% last week (19 May) after the Cambridge firm reported maiden profits at the EBITDA (earnings before interest, tax, depreciation and amortisation) level for the second half of 2010, prompting the market to reassess its potential.

Independent broker Piper Jaffray expects blinkx to reach pre-tax profitability on an annualised basis in 2012, although analyst Rajeev Bahl adds this could come sooner if the fast-growing video search software minnow continues to beat expectations for revenue growth. For 2010 Bahl is expecting revenues to surge 33% to $40 million and operating losses to narrow to $5.7 million. The final results (19 May) saw stronger-than-expected video search volumes, up 169% year-on-year, and pricing continue to hold up well in a market where competition has been hot.

Autonomy (AU.) spin-off blinkx continues to add new brands to its customer list and boasted a 193% increase in campaign bookings last year. The group is now looking to bring its video search technology to the mobile market.

Flagged by Shares at 13p earlier this month (Cover, 13 May), blinkx’s shares are still trading below its May 2007 flotation price of 45p.

Shares says: Buy blinkx at 27.5p