Marketing and media analytics specialist Ebiquity plc (LON:EBQ) saw faster revenue growth in the second half of 2017.
Revenue for 2017 was up 4.6% to £87.4mln from £83.6mln the year before, pretty much in line with market expectations, with like-for-like (LFL) growth of 0.8% on a constant currency (CC) basis.
Excluding the Market Intelligence (MI) division, most of which is being sold off to Nielsen Holdings, revenue was up 6.7% to £64.2mln from £60.2mln in 2016; LFL growth was 2.3% on a CC basis and was up 5.5% year-on-year in the second half of the year.
READ: Ebiquity's proposed sale of its advertising intelligence business gets the thumbs-up from Numis
As previously flagged, revenue from the US business was well below management expectations, but having taken remedial action, the group expects a turnaround in performance stateside.
Underlying profit before tax of £11.0mln was a shade ahead of the consensus forecast of £10.8mln, while the full-year dividend has been increased by 10% to 0.71p, in line with market expectations.
Underlying cash conversion improved to 93% of underlying operating profit from 88% the year before.
Net debt at the end of 2017 stood at £28.9mln, versus £28.1mln at the end of 2016, although since then the company has announced the sale of much of its MI business for £26mln.
Sales of the Advertising Intelligence business leaves the group focussed on faster-growing segments
“The sale of the Advertising Intelligence business now better focusses Ebiquity on service areas offering structural market growth,” the company said in its full-year results statement.
"2017 was a year of change for Ebiquity. The planned sale of the Advertising Intelligence business, in particular, was significant and resource intensive. While our financial performance was held back by disappointing results [in] the US, we achieved important milestones on our multi-year transformational journey. The underlying changes that we are driving throughout our business are designed to align our services with client-side trends - as well as competitive dynamics - which provide mid to long-term growth opportunities,” said Michael Karg, the chief executive officer of Ebiquity.
“We are positioning Ebiquity to become the preferred, independent advisor to marketers at world-leading brands. We have a clear, focussed and differentiated destination and are implementing the relevant changes now and going forward," he added.
Numis views Ebiquity shares as “oversold”
In a note to clients, analysts at Numis Securities reiterated a ‘buy’ rating and 145p price target on Ebiquity shares, noting that the results “were in line with our expectations and the February trading update.”
The analysts said: “We maintain our PBT/EPS forecast of £10.2m/8.8p for 2018 and introduce an estimate of £11.5m/9.8p for 2019. Assuming disposal of AdIntel on 1st January would give PBT/EPS of £7.0m/5.9p and £8.4m/7.0p for PF18 and PF19, respectively.”
They added: “Having fallen materially since February, we view the shares as oversold”.
In early afternoon trading, Ebiquity shares held steady at 75.5p.
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