In a trading update released to the Australian Securities Exchange this week, the media company said it expected revenue guidance of $86 million and a normalised EBITDA of $17.7 million.

The normalised EBITDA excludes costs from acquiring Gumtree, Carsguide and Autotrader (GCA) in 2022.

At its AGM in January, TMH said it expected potential revenue for this financial year of $95.01 million and statutory EBITDA of $20.7 million.

In its update to the ASX, TMH chief executive officer Tommy Logtenberg said the GCA business “continues to perform in line with expectations generating significant revenue and contributions to EBITDA with the Canadian subsidiary also performing well.”

“However, costs associated with redundancies at the Perth office and significant legal expenses associated with the Takeovers Panel process and prior management issues are likely to result in the company not meeting its earlier earnings guidance,” he said in the notice.

The Takeovers Panel this month said that the market was not properly informed of the associations between certain shareholders and the interest of their shares. It said these associates should be barred from acquiring more shares on-market and not to exercise their voting rights.

It also said the board must take on two independent directors – one as chair – in consultation with an independent consultant. 

TMH bought GCA from global classified platform Adevinta in August 2022 for $US60 million (then $A86.7 million).

Mr Logtenberg said: “The company has experienced some softness in its advertising revenues next to a lower demand in the capital markets division.

“The biggest contribution to the reduced EBITDA has come from the significant one-off legal expenses associated with the Takeovers Panel process, redundancies and writing off of bad debts. 

“We see these as one-off expenses which do not detract from our strategic roadmap to improve our top-line results, and profitability of the company.”

TMH took on debt and launched a renounceable rights issue to pay for the GCA purchase. Following the acquisition, it made a series of redundancies it said were part of its “transformation” into a classified business model, moving away from its previous news content model.

This also brought changes to the board, with the company founder and managing director Jag Sanger moving to the role of a non-executive director.

The company’s major shareholder is David Argyle (37 per cent); Duncan Saville’s ICM Investment Management (19.8 per cent); Gavin Argyle (father of David with 6.47 per cent), and Jag Sanger (4.27 per cent).

The company’s shares closed at 32.5c/share at time of publication. They have traded in a range of 49c (the highest in the past year) to a low of 27c (May 26, 2023).

By Neil Dowling