logo-loader

Ebiquity saw faster revenue growth in second half of 2017

Last updated: 13:35 21 Mar 2018 GMT, First published: 07:36 21 Mar 2018 GMT

Michael Karg, CEO of Ebiquity
CEO Michael Karg believes the actions taken in 2017 have positioned the business for faster revenue growth in 2018 and beyond

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.

 -- Adds broker comment, share price --

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

39 minutes ago