Reassuring trading update

Ebiquity 29 July 2016 Flash note

Ebiquity

Reassuring trading update

Trading update

Media

29 July 2016

Price

116.50p

Market cap

£90m

Net debt (£m) at December 2015

28.7

Shares in issue

77.2m

Free float

99%

Code

EBQ

Primary exchange

AIM

Secondary exchange

NA

Share price performance

Business description

Ebiquity is an independent marketing performance specialist and a leading provider of a range of business-critical data, marketing analytics and consultancy services to advertisers and media owners on an international basis.

Analysts

Bridie Barrett

44 (0)20 3077 5757

Fiona Orford-Williams

44 (0)20 3077 5739

Ebiquity is a research client of Edison Investment Research Limited

Ebiquity’s H1 performance is expected to be broadly in line with market expectations, with a larger contribution from the rapidly expanding MPO division. We will update our forecasts at the time of the interims on 28 September when management may also be able to give further insight into the market’s reaction to the much anticipated ANA Media Transparency Report and subsequent recommendations.

Year
end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/14**

69.1

6.8

6.6

N/A

17.7

N/A

12/15**

76.6

11.2

10.8

0.4

10.8

0.3

12/16e

82.0

12.5

11.0

0.5

10.6

0.4

12/17e

88.5

13.9

11.7

0.6

10.0

0.5

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Unaudited pro forma.

Ebiquity’s trading update indicates that overall H116 growth is broadly in line with consensus expectations. MPO (14% FY16e revenues) is seeing strong growth across all markets and is delivering “record overall growth”. MVM (55% FY16e revenues) continues to grow, although at a slower rate in the US, where some clients held back spend in anticipation of the ANA’s Media Transparency Report. With this report and the subsequent ANA recommendations now published (in partnership with Ebiquity), second half growth in MVM should pick up again. However, MI (31% FY16e revenues) continues to feel the pressure from squeezed client budgets in the US, with full year revenues now expected to contract. Two-thirds of revenues are non-sterling denominated and, assuming the current spot rates persist, there is likely to be a currency impact. While this should create some upside in terms of revenues, at the operating margin level the impact will be fairly neutral.

We expect Ebiquity to be fairly cushioned from the current uncertainty in the UK economy. 84% of revenues are recurring and as its services are geared to helping companies maximise the efficiency of their ad spend, demand may well increase in times of austerity (as it did for MVM during the 2007/08 period). Interim results will be reported on 28 September and we will review our forecasts at that time.

Disclaimer

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DISCLAIMER
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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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