Groupon share price slips despite international billings boost from Ticket Monster

 
Sarah Spickernell
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The e-coupon company purchased Ticket Monster to drive international sales (Source: Getty)
Groupon performed well across the world in 2014, but it wasn't enough to please investors.

The figures

During the 12 months to 31 December 2014, Groupon's revenue reached $3.2bn (£2.08bn) – 24 per cent higher increase compared to the previous year.
The e-coupon company's fourth quarter revenue was also pleasing, going up by 20 per cent to $925.4m (£601.6m) from its 2013 value of $768.4m (£499.5m).
This exceeded the prediction made by Groupon when it released its third-quarter earnings in October – at the time, it said revenue would be between $875m and $925m in the fourth quarter. The actual results proved to be slightly beyond the upper end of their estimation.
But the business's prediction for the first quarter of this year knocked confidence, with shares slipping by two per cent in after hours-trading. Groupon said the unfavourable impacts of foreign exchange rates would lead to an estimated revenue of between $790m (£513m) and $840m (£546m), below estimates of $856m (£556m).

Big billings

In terms of billings, these went up by a huge 32 per cent globally last year, and the increase was spread widely across different areas – North America billings increased 20 per cent, EMEA increased 8 per cent and rest of world increased 154 per cent.
Groupon attributed this rise to its acquisition of the Korean e-commerce company Ticket Monster in the first quarter. On 2 January 2014, Groupon purchased the company from LivingSocial Korea for $260m (£169m), with the hope that it would help international expansion and boost flagging revenues.

Why it's interesting

Only halfway through last year, the future looked a lot worse for Groupon. Email and redemption declines had subsided, and in August, shares plummeted after the company reported second-quarter losses of $22.9m (£13.5m), or three cents a share, on revenue of $751.6m.
The benefits of the Ticket Monster purchase took a while to become apparent, and shares went down fast at the beginning of last year as investor confidence dwindled. Shares started edging up again in the latter half of last year but still have not gone up to the level they were at this time last year.

Interestingly, Groupon may soon sell the business that it claims was such a strong contributing factor to its 2014 success – Earlier this week, The Wall Street Journal reported that it was in talks to sell Ticket monster for a possible $1bn (£650m). This sale would be worth four times what it was purchased for.

What Groupon said

Chief executive Eric Lefkosky said:
2014 was a transformational year for Groupon, as we made significant progress in our strategy to become the world's leading local commerce destination.
Global billings hit their highest level ever in the quarter, growing more than 30 per cent, driven in part by our reignited North America Local business. We now turn our attention to further building out our marketplace to ensure that our more than 260 million subscribers have an amazing experience every time they use Groupon.

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