Hi, everyone. Welcome to our half-year results webcast. My name's Stuart Simms. I'm the CEO of XLMedia. I'm going to be joined during the presentation by Iain, our CFO. And together, we'll be walking you through our first half performance and update you on the forward direction of the business. We'll try to keep it relatively brief. So the plan is that I just provide a quick summary of the group performance. Iain will walk you through the numbers in more detail. And then I can walk you through the strategy and summarize at the end. For those of you not so familiar with XLMedia, we're a performance marketing company. We've been around quite a while. Our job is really simple. It's to introduce consumers to our customers' products or services in return for a revenue share of some form.
We manage a balanced portfolio of premium branded assets across three major verticals, those being casino, sports, and financial services. Our job really is to try and find the most valuable consumers to introduce to those products and services and create engagement between the consumers and those products and services, and we're constantly looking at how we manage our sites and our assets to be able to provide that intrinsic value to our strategic partners. We recently moved our global HQ to the U.K. We've got a growing presence in the U.S., where we've recently opened a couple of offices, and we continue to have operational resources based in Cyprus and Israel, so just to give you an indication of the operating overview, we've had some challenges this year, but during the 12 months of my tenure, we've continued with the transformation. It remains on track.
Now, clearly, the business impact by Google and COVID-19 is estimated at about $2 million per month from late March. But during the period of the first half, we've overhauled the governance structure. We've collapsed the layers of management down from eight down to four. We've put in one executive team, whereas previously there were two that operated across both Israel and Cyprus. And we've completely changed our operating model, i.e., the way that we work and the way we're structured and the organizational capability has changed. We've also done a really deep dive to really understand the portfolio of assets that we've got, their performance, and then really thought carefully about where we focus our time and attention and where not to. So as part of that, we've reviewed looking at the disposal of some non-core assets, which should come to conclusion over the next couple of months.
And we've also really carefully thought about how we can consolidate some of the sites to get the best return in the territories and the verticals that we're trying to operate. We've done some housekeeping as well. We've moved our corporate tax residence to the U.K. And that really reflects the management control and governance that we've tried to put in place to make the business very successful and grow in the long term. We've also started to look at how we can then build out new assets or develop existing ones, like 101 Great Goals, which we now bought off the founders. And we are now running that with autonomy. But the first thing that we wanted to make clear and that was very pertinent to H1 was how do we recover our casino business?
Our ambition is to really take greater control of our future and enhance our revenue potential. So we believe by the end of Q1 2021, in various delivery stages along the way, we will gain full control of our premium assets and their performance. And then we'll also add into that a new way of working, both from an organizational standpoint but also from technology, where we can utilize and harness our proprietary data a lot more effectively. And the steps that we've undertook along the way are that we've changed the organizational structure. We've changed the platform that we operate away from a proprietary one towards a more outsourced technology platform that embraces the innovation and the change and success that an open-source platform can provide. We've also continued to learn along the way.
There's no perfect recipe for how you can then mitigate Google manual penalty at such scale that we encompass, so we've learned a lot. We've done a lot of testing, a lot of trials, and we've come up with a number of different paths to be able to get the casino business back on track over the course of the next few months, with a reduced reliance on one critical path for success, but rather than trying a number of different ones to be able to be successful, but our commitment remains clear against our strategic objectives, which is to really make sure that we have well-branded sites with great editorial content, really community feel to utilizing user-generated content with trusted reviews, to be able to drive more sustainable traffic, which we believe will result in more sustainable and predictable growth in the long term.
So as mentioned previously, our focus is to rank sites and drive traffic as quickly as possible. And to do that, we're taking a multi-track approach. We're looking at four different ways that we can run in parallel to be able to take back control whilst also driving improved long-term traffic, resulting in revenue, resulting in performance. So the first one is we will continue to try and get reconsideration with Google. It's not an exact science. You do it on a site-by-site basis. And as mentioned previously, we've gone to great lengths to re-platform our sites onto new technology. We've enhanced the content. And we continue to enhance some of the community aspects to those sites with a view to then resubmitting them to Google over the second half of the year for reconsideration.
In parallel, it's been evident to us that by consolidating sites that maybe we had between seven to 10 sites operating in the same territory in the same vertical, by consolidating them down to a fewer number of premium sites, we believe that in the mid to long term, this will not only get us back to similar types of revenue and traffic that we had previously, but could drive increased levels of growth, so we will pursue a consolidation of premium assets to help drive new money and new revenue for the business. It's been clear that if you apply the 80/20 rule, that about 80% of our revenue came from 20% of the affected sites, so by focusing and consolidating our efforts, we believe that the return to ranking and revenues will be quicker and more efficient by going through this consolidation process.
We anticipate finishing this by the end of Q1 2021. Further to this, we've done a really good understanding, I think, using our data on the portfolio aspects of the business, and our ambition is to then partner on non-core assets, where we will then work with partners to bring those sites back to ranking and performance, but maybe sharing revenue as a consequence with those partners when we rank those assets, and then finally, as mentioned as part of the Finnish asset announcements we made earlier this year, we've also closed sites, which we did early in January when they were first affected, if there was no significant traffic or tail revenue, and we're also looking at further sales of those sites and more to come on that over the course of the second half.
Now, I'd like to hand across to Iain, who's going to walk through the financial results at a high level.
Thank you, Stuart. And hello, everybody. This is Iain Balchin. I am the CFO of XLMedia. If we take a look at the financial results for the first six months of 2020, revenues were $27.7 million. That's versus $42.5 million in the same period for last year, a reduction of 35%. This reduction was driven principally by the manual penalties imposed by Google on some of our casino assets, the impact of COVID-19, and the closure of our remaining media businesses. Our cost of revenues were $11.1 million, leading to a gross profit of $16.6 million for the half year, or 60% of revenue. Operating expenses remained stable at $14.8 million, all of which led to an Adjusted EBITDA of $5.1 million before reorganization costs. Reorganization costs in the period were $1.5 million. Operating profit was $279,000.
After taking into account finance expenses and taxes, the net income for the period was $99,000. The full cash flow and balance sheet is available on our website for those of you who want to look more closely. Of particular notice is the continued strength of our cash balances, which have held up well in this challenging period. The company used minimal cash in the first half of 2020. Where it did, this was principally to pay down remaining debt. The company is currently debt-free. Looking at the revenue concentration charts, which we have included for the first time, a key thing that is really fundamental to understand is that around half of our revenues come from just 18 websites out of a total portfolio in excess of 2,000.
These high-performing sites are all distinguished by their quality of content, a key facet in our transformation plan, which is to focus on quality over quantity. From a business unit point of view, 62% of first-half revenue was generated by our casino sites, 20% from our sports sites, and 15% from our financial sites. This clarity of focus is well captured in our business strategy. We are very much focused on market-leading brands and the relationships with our audiences, and Stuart will talk more to this in a moment, so having endured an unprecedented set of challenges in the first half of 2020, we're starting to see the financials stabilize and early signs of recovery in some key areas. You can see on these two graphs our revenue and Adjusted EBITDA for the first six months of 2020, and latterly the additional month of July.
We firmly believe internally we hit the bottom of the curve in June, and are confident of our recovery as we continue into the second half of the year. Revenue is increasing, and we have taken significant costs out of the business in the first half. This leaves us well positioned for positive exit rates as we enter H2 and 2021. I'll hand now back over to Stuart.
Thanks, Iain. I'm now going to just talk about just providing some clarity to our strategic objectives. They've been very consistent since I joined, one being portfolio management, the other being really focusing on premium branded assets. So in terms of portfolio management, our ambition is to make sure that we're more cognizant of managing assets across our diverse geography, territory, vertical, or maturity of the verticals which we intend to operate in to give us more sustainable growth opportunities. When we think about the product lifecycle of some of the assets that we manage, it's really important to make sure that we have some that are early and growing fast and some that are more like cash cows that are more mature in terms of the market in which we operate.
We're trying to make sure that we blend those together to give more predictable growth for the future, with a real focus on moving some of our focus and resources across the U.S. and particularly into the sports vertical. The second thing that we focus on from a strategic objective is premium branded assets. As we mentioned earlier, and as Iain then brought out in some of his slides, there's a real revenue concentration for us, where 18 sites generate 50% of our revenues. As I mentioned previously, that also is mirrored by the 80/20 rule that we apply to new money. So it's incredibly important for us that the assets that drive the bulk of the revenue and the growth we do a really good job with, and we've oriented our business, our working practices, and our organizational capability to be able to support that.
Now, there's two other enablers that we haven't really spoken about much to date, but I'm passionate about. One, making sure that we have the right talent to be able to not only deal with the challenges, but the opportunities that we face, and we drive as much engagement and productivity from those employees as possible. We intend to be a very progressive employer that attracts the best talent and equips us to be able to execute on our strategic goals. The second thing, and again, which is a real passion of mine, which is technology. We need to be using as much of our proprietary data as possible and the newfound techniques around data science to deliver personalization, improve recommendations, increase dynamism in how we operate our sites, to be able to increase the productivity of the sites and the employees to deliver against our two strategic objectives.
So when I think through the application of those with regards to the growth opportunities, it's really important for us to then utilize that data to be able to acquire new traffic in the most efficient way, to really segment the audience and understand the behaviors, particularly around how we can maximize tail revenues, for example, which previously we haven't paid enough attention to, I believe, as an organization, but offers us a rich pot of gold if we can do a better job in understanding the behaviors of some of the existing consumers that we've already engaged with and continue to help them develop their relationship with the brands or the services that we've introduced them to previously.
I also believe that where our sites are quite static at the moment, I believe that in the future, our inventory and our assets are going to become more dynamic, more real-time by nature, using the data that we have available to us to drive improved personal experiences for the consumers as they enter the sites, and then provide potentially more growth and more yield from the assets and the inventory that we've got on behalf of our customers, and then finally, there's real substance behind the acquisitions and partnerships that we're now looking at to really develop our U.S. business, and as we mentioned earlier, portfolio management is crucial to that success.
As for our partnerships, we are very clear that some of the capabilities, the technology, and the resources we have available to us will support significant partnerships with perhaps media companies that don't necessarily have the same monetization capabilities that we do that we would then complement very well. So in summary, we see clear momentum entering into H2, and we believe that we will continue that through 2020 into a material recovery in 2021. We've got a very clear strategic ambition underpinned by very clear strategic objectives that we believe will drive significant growth in the long term. We have a strong plan for how we're dealing with the casino recovery, and it allows us to work in parallel and optimize our resources as much as possible.
We see significant growth opportunities across the business powered by both people and technology, and then also benefiting from our retention of the cash, which Iain mentioned about earlier, so we are exiting 2020 with really positive momentum, and I'm really excited about what we can do in 2021 and beyond. Thank you very much for your time and attention, and I look forward to giving you further updates throughout the year.