Ebiquity plc (LON:EBQ), the marketing analytics specialists, unveiled its growth acceleration programme alongside a solid set of interim figures.
Chief executive Michael Karg believes his blueprint will deliver a compound annual growth rate of more than 10% over the next five years, while creating a geographically more diverse business.
The engines for this acceleration will be the Marketing Performance Optimisation and Media Value Measurement businesses, which it hopes will account for 80% revenues by 2021.
To fund the expansion, the operating margin is expected to fall to 12-13% by 2018, although that will still be ahead of the sector average. Ebiquity’s reported earnings will decline both next year and 2018, before returning to current levels in 2019.
“The growth acceleration programme will develop Ebiquity into a higher quality business, with a robust infrastructure and scalable service offering that will deliver long term, sustainable revenue and profit growth,” investors were told.
Ebiquity consists of three main businesses: Media Value Management (MVM), Market Performance Optimisation (MPO) and Market Intelligence (MI).
As mentioned above the growth engines are MPO, a specialist in the “data science of marketing spend”, and MVM, which helps advertisers measure their media performance. The two now account for 74% of turnover.
MI, as the name suggests, is an expert in market intelligence. This is a mature, highly competitive sector.
However, the business has received a “positive response” from clients to its new portfolio platform and Ebiquty said it is excited by the upcoming launch of MI’s digital offering.
The company described its first-half financial performance as “encouraging”, with revenues up 6.8% at £42.3mln and underlying operating profits ahead 8.2% at £8.6%. MP was the “stand-out” performer, according CEO Karg.
"The first half also saw an increasing focus on media transparency which is translating into positive momentum for our MVM practice,” he added.
The company’s broker Numis said that, after an initial period of investment, Ebiquity would be "well-positioned to deliver double-digit EPS growth going forward”.
Numis’ pre-tax profit forecast for the current year remains intact at £13mln, but it is predicting a profit of £12.2mln for 2017 (down £1.8mln on the previous estimate).
Currently changing hands for 104p, the shares are worth 162p, according Numis’ analyst Paul Richards.
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