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blinkx gets ads boost

The integration of acquisitions and the increasing availability of fast broadband and smartphone connections was behind the impressive revenue and profits growth at blinkx

(BLNX), a specialist in searchable online video content. And as over 95 per cent of the company’s sales are generated by online advertising, the Olympics and Presidential election season in the US provided an important fillip.

Internet advertising is still only worth a fraction of that spent on prime television spots, but advertisers have been following consumers online at an increasing rate, to the benefit of profits, at a time when online video consumption makes up just over half of all internet traffic. The effect of Blinkx’s operational gearing was most apparent when the effect of acquisitions is stripped out - underlying operating profits soared by 135 per cent to $24.6m (£16m) as growth in revenue outpaced costs.

The main effect of acquisitions was to increase the number of website publishers, affiliates and syndication partners to over 3,000, which should prove to be a reliable source of future underlying sales growth. Overall, management sounded confident and predicted that blinkx’s sales would continue to exceed industry growth rates.

Brokerage Canaccord Genuity forecasts current year pre-tax profits of $28.4m and EPS of 6¢ (2013: $25.4m and 7¢).