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blinkx confident on FY11 after move to first-time profit

Video search specialist says average number of daily searches rose to 31.6 million in 1H.

blinkx PLC Tuesday posted a move to pretax profit in the first-half for the first time as its video search engine technology attracted more users and advertisers increased spending on video search.

Revenue more than doubled with the average daily number of searches climbing to 31.6 million in the period, from 13.1 million a year earlier, and the average deal size for video advertising bookings up 40%.

The market is changing from being experimental into a more real one, where people are committed to spending [on video advertising],” Chief Executive Suranga Chandratillake told Dow Jones Newswires.

Click here to find out more!Chandratillake added that blinkx—which generates revenue from advertising on its own website and those of partner companies, including Ask Jeeves and Lycos—is confident of further growth in revenue and profit for the full year and beyond, in line with analysts’ expectations.

Market expectations are for pretax profit of $6.4 million on revenue of $59.2 million for fiscal 2011, rising to $88.6 million and $18.8 million in 2012, according to three analysts polled by Factset.

For the six months ended Sept. 30, blinkx made a pretax profit of $2.02 million, compared with a loss of $7.35 million in the same period a year earlier. Revenue was $27.4 million, up from $13.1 million.

The company had $16.9 million net cash at the end of the period and has since raised a further $31.2 million in a share placing. Chandratillake said the cash position gives the company flexibility to increase the size of its video search audience either through acquisitions or investment in organic growth.

At 0953 GMT, shares were down 0.3% at 88.75 pence, underperforming a 0.9% rise in the Alternative Investment Market.