Mobile Embrace swings to $2.6m loss

Mobile Embrace (ASX:MBE) announced a $2.6m FY11 loss, but said investments developing its now-core B2B business are leading to improved revenue

Mobile marketing and services company Mobile Embrace (ASX:MBE) swung to a $2.6 million FY11 loss, due to difficult trading conditions and spending on growth initiatives.

Revenue fell to $8.8 million, from $12 million the year before, resulting in an ebitda loss of nearly $1 million.

Due to trading conditions and increased regulatory costs, Mobile Embrace decided to cut its advertising spending in half to $1.6 million.

Earnings were also impacted by the decision to invest $2.5 million in developing its new business units — particularly its new core focus, B2B division Mobile Embrace.

These investments were showing signs of paying off, with Mobile Embrace reporting that revenue grew 9.6 per cent in the June quarter, and was on track for greater than 10 per cent growth this quarter.

The company also increased its investment in majority-owned online sports betting agent TopBetta during the year, but said that because the business falls outside of its chief activities it is now considering options including a sale of the stake.

Mobile Embrace changed its name from MobileActive in July, to reflect its new B2B focus. The company is gradually phasing out its retail business.

MBE shares grew 5.88 per cent on Thursday to $0.018.

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