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(Sharecast News) - LBG Media reported strong revenue growth in the first half of 2026, driven by expansion in its direct advertising business, although earnings declined as the group invested in growth and shifted its revenue mix.
Revenue for the six months ended 31 March rose 19% to 52.4m, or 22% on a constant currency basis, marking an acceleration from 10% constant currency growth in the prior full year.
The company said the performance reflected "strong revenue momentum" and increasing visibility as it pivots towards more predictable income streams.
Adjusted EBITDA fell to 8.0m from 12.2m a year earlier, with margins impacted by investment in senior leadership and sales capabilities in the UK and US, as well as a shift towards lower-margin direct revenues.
Direct revenue streams accounted for more than 70% of group revenue in the period, up from around 55% in 2025, while indirect revenues remained under pressure amid weaker referral volumes and changes to Meta's Facebook algorithm.
The company said it was continuing to see strong growth in its direct business, with expanding relationships with blue-chip brands and increasing demand in the US, which was becoming a more significant contributor.
It added that investment in generative AI was supporting productivity gains and client engagement.
Net cash and cash equivalents stood at 28.4m at the end of March, compared with 30.8m a year earlier, with the group maintaining a strong balance sheet to support selective acquisitions.
"LBG Media delivered constant currency revenue growth of 22% in the first half of our financial year - a significant step-up from 10% constant currency revenue growth delivered in 2025," said chief executive Solly Solomou.
"This shows the early benefits of our strategy to accelerate investment in our growth to drive predictable revenues."
Looking ahead, LBG Media said it expected full-year revenue of around 110m, upgraded from previous guidance, reflecting stronger-than-expected performance in direct revenue streams.
However, it now anticipated full-year EBITDA of about 22m due to the evolving revenue mix and continued investment.
Solomou added that the shift towards direct revenues would create "a higher-quality revenue base over the medium term, with reduced reliance on web and Facebook", alongside growth in the UK and US and selective acquisitions.
The group said it expected earnings to be weighted towards the second half, supported by benefits from recent hires, cost savings and a strong pipeline in its core markets.
At 1251 BST, shares in LBG Media were down 12.9% at 46.69p.
Reporting by Josh White for Sharecast.com.
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