LBG Media’s FY25: double‑digit growth, US momentum, and a sharper focus on predictable revenues
LBG Media has delivered a solid FY25, with revenue of £92.2m and adjusted EBITDA of £25.2m, both in line with market expectations. Growth was driven by strong Direct revenues (work done directly for brands and agencies) and a stabilising Indirect stream (revenue shares from platforms and websites).
The strategy is clear: lean harder into Direct, especially in the U.S., to make earnings more predictable and less exposed to platform swings. Cash generation remains strong, the balance sheet is debt-free, and the pipeline for FY26 looks healthy.
Important correction: Direct margin expectations
The company issued a correction to yesterday’s RNS: it now expects Direct margins before central costs to be in the mid‑20% range. That’s still attractive at scale and aligns with the stated plan to grow Direct as a share of the mix while keeping Indirect margins above 50%.
Key numbers from FY25
| Metric | FY25 | YoY (pro forma) | Notes |
|---|---|---|---|
| Group revenue | £92.2m | +7% (+10% at constant currency) | Adjusted Group Revenue £92.0m |
| Adjusted EBITDA | £25.2m | +3% | Margin 27.4% vs 28.4% |
| Profit before tax | £14.0m | -3% | Includes growth investment |
| Cash and cash equivalents | £30.8m | +13% | No debt; cash conversion 93% |
| Direct revenue | £49.7m | +13% | UK £30.0m (+11%); U.S. £18.6m (+29%) |
| Indirect revenue | £41.5m | +1% | Social £25.3m (+12%); Web £16.2m (-13%) |
| Global audience | 509m | +1% | Followers, unique podcast listeners, avg monthly web users |
Direct vs Indirect: what drove the year
Direct (content and campaigns produced for brands and agencies) now accounts for 54% of revenue and grew 13%. The U.S. was the standout at +29% to £18.6m, with three U.S. clients each now over $1m and a “one-stop shop” offer across LADbible and Betches gaining traction. The UK rose 11% to £30.0m, with repeat revenue at 82% and a 28% brief conversion rate.
Indirect was essentially flat overall, masking a two-speed picture: Social rose 12% to £25.3m, while Web fell 13% to £16.2m, reflecting weaker referrals and a tough comparator. Management has strengthened the Web team and expects actions to support recovery.
Why the mix shift matters
LBG plans to accelerate investment in Direct in the UK and U.S. and expects Direct to exceed 50% of Group revenue and potentially reach 70% over time. Guidance now points to Direct revenue growth in the low‑to‑mid teens with margins before central costs in the mid‑20% range. Indirect is expected to grow at low single digits with margins above 50%.
Translation: a bigger share of more predictable, relationship-led sales, supported by a capital-light, high-margin Indirect flywheel on premium social platforms.
Cash, balance sheet and capital allocation
Cash and cash equivalents rose to £30.8m with 93% cash conversion and no debt – plenty of firepower for selective bolt-on deals. During the year the Group paid a $5.5m earnout to Betches, bought £4.0m of shares into the Employee Benefit Trust to satisfy future awards, and still finished with higher cash. A new London office lease was signed post year end (10 years, £2.5m per annum) to support scale.
US build-out and the AI edge
The U.S. leadership bench has been upgraded with seasoned operators across partnerships, operations and creative. That matters: the U.S. is the world’s biggest ad market and LBG’s growth multiple if execution lands.
On the tools side, LBG continues to lean into AI – not as a gimmick, but to lift productivity and engagement. Mission Control (real-time content analytics), EMMA (workflow), LAD RADAR (trend spotting), ARNOLD (video QC), and in-house subtitling are good examples. The thesis is simple: faster, smarter, more engaging content that improves outcomes for clients and monetisation for LBG.
Outlook: FY26 pipeline building, margins steady near term
Management reports increasing client engagement and a strong FY26 pipeline in the UK and U.S. Direct markets. They expect Group EBITDA margins to remain in line with consensus near term, improving over time as scale benefits kick in and higher-value IP is monetised across channels.
Revenue disclosure has been sharpened to the four core markets (Direct UK, Direct U.S., Indirect Social, Indirect Web) which should help investors track the mix shift and progress more clearly.
What I like in these results
- Direct growth compounding: +13% overall, with U.S. +29% and UK +11% despite a tough comparator year.
- Healthy repeat revenue in UK Direct (82%) and improving visibility from larger, multi‑client relationships.
- Cash generative, no debt, and 93% cash conversion – funding growth and selective M&A without strain.
- Social resilience: Indirect Social up 12% while Web softness is being actively managed.
- Clear mix-shift strategy with realistic margin guardrails – Direct mid‑20% before central costs; Indirect >50%.
What could worry the bears
- Profit before tax down 3% year-on-year on a pro forma basis, reflecting investment and some margin pressure.
- Web decline (-13%) highlights ongoing platform and referral risk, even as the Social side grows.
- Customer concentration: one major customer represented 24% of FY25 revenue – noteworthy for risk management.
- Execution risk in the U.S.: the team is in place, the pipeline looks good, but it must convert consistently.
Bottom line: a sturdier, more predictable LBG is emerging
LBG Media has moved through FY25 with controlled growth, strong cash, and clear focus. The pivot towards higher-visibility Direct revenues – underpinned by a robust social footprint and AI-enabled operations – is the right move, in my view. The mid‑20% Direct margin before central costs guidance feels sensible given the investment cadence and the land‑and‑expand dynamics in the U.S.
If management keeps widening U.S. relationships and stabilises Web while Social holds up, FY26 should show further progress. Watch the mix shift, U.S. client wins, and cash conversion – if those keep trending in the right direction, the investment case strengthens.
Glossary: quick definitions
- Direct revenue: fees from producing content and campaigns directly for brands and agencies.
- Indirect revenue: LBG’s share of ad revenue generated by platforms and its own websites near LBG content.
- Adjusted EBITDA: operating profitability measure before interest, tax, depreciation, amortisation and certain items.
- Cash conversion: operating cash flow divided by adjusted EBITDA.
