Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
Ebiquity’s period-end trading update indicates a good first half performance, with revenues of £32m, up 19% on the prior period. The group has also posted an operating profit – undisclosed but ahead of the £1.0m delivered in H220. The progress is a result of a mix of factors, including new business wins (notably in digital), with some benefit from work deferred from FY20. We leave our forecasts unchanged for now, noting that any revisions at the interims in September are more likely to be on the upside. The share price performance year-to-date has been strong (up 195%), but the valuation remains at a sizeable discount to peers.
Ebiquity |
Building on recovery |
Half year update |
Media |
14 July 2021 |
Share price performance
Business description
Next events
Analysts
Ebiquity is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||
Ebiquity’s period-end trading update indicates a good first half performance, with revenues of £32m, up 19% on the prior period. The group has also posted an operating profit – undisclosed but ahead of the £1.0m delivered in H220. The progress is a result of a mix of factors, including new business wins (notably in digital), with some benefit from work deferred from FY20. We leave our forecasts unchanged for now, noting that any revisions at the interims in September are more likely to be on the upside. The share price performance year-to-date has been strong (up 195%), but the valuation remains at a sizeable discount to peers.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
68.1 |
4.7 |
2.9 |
0.0 |
19.7 |
N/A |
12/20 |
55.9 |
(1.3) |
(1.9) |
0.0 |
N/A |
N/A |
12/21e |
61.0 |
2.6 |
2.5 |
0.5 |
22.8 |
0.9 |
12/22e |
68.3 |
5.0 |
4.7 |
1.3 |
12.1 |
2.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Pushing ahead on digital and ESG
Ebiquity’s reconfigured Digital Innovation Centre, built on Digital Decisions, looks to be achieving its goal of providing a more comprehensive and integrated digital media offering. Although Google’s withdrawal of support for third-party cookies has been pushed back to FY23, the direction of travel remains the same and the need for advertisers to optimise and benchmark their digital media spend in a complex ecosystem is unlikely to diminish. The group’s new KPIs (see March update note) show management’s commitment to driving this aspect of the group’s business. Ebiquity has also stepped up its capabilities in socially responsible advertising, which fits well with heightened concerns on brand safety. These initiatives should help meet the objective of increasing service lines per client and driving revenues.
Upside potential to forecasts
Our current FY21 forecast for revenue of £61.0m implies a flat H221 on H220, but with an improving margin to take the full year PBT to £2.6m. Given the CEO’s comment that further progress is expected in H2, this implies that the risk may be on the upside. Period end net debt of £10.3m, which was in line with management expectations, consisted of £9.3m cash and £19.7m of gross debt (£18.9m excluding the US PPP debt of £0.75m, which we expect to be credited in H221).
Valuation: Strong year-to-date performance
Ebiquity’s valuation discount is narrowing as execution of the business plan progresses. Year-to-date, the shares are up by 195%, bottoming at 18.4p in February, with marketing services peers having gained 49% on average as the outlook for advertising spend have firmed up. Parity with these peers for FY22 across P/E, EV/EBITDA and EV/EBIT multiples would suggest a value of 77p. This is lower than the 89p cited in our last report, reflecting the erosion of forward multiples from raised growth expectations not yet reflected in prices.
Exhibit 1: Financial summary
£000s |
2019 |
2020 |
2021e |
2022e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
68,133 |
55,907 |
61,000 |
68,320 |
Cost of Sales |
(36,212) |
(31,219) |
(32,940) |
(36,893) |
||
Gross Profit |
31,921 |
24,687 |
28,060 |
31,427 |
||
EBITDA |
|
|
8,603 |
1,797 |
5,015 |
7,350 |
Operating Profit (before amort. and except.) |
|
|
5,567 |
(334) |
3,500 |
5,900 |
Amortisation of acquired intangibles |
(1,169) |
(1,122) |
(1,122) |
(1,122) |
||
Highlighted items |
(9,044) |
(3,325) |
0 |
0 |
||
Share-based payments |
(117) |
1,906 |
(150) |
(150) |
||
Reported operating profit |
(4,763) |
(2,875) |
2,228 |
4,628 |
||
Net Interest |
(898) |
(875) |
(924) |
(917) |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
||
Forex |
0 |
(137) |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
4,669 |
(1,346) |
2,576 |
4,983 |
Profit Before Tax (reported) |
|
|
(5,661) |
(3,887) |
1,304 |
3,711 |
Reported tax |
(1,477) |
150 |
(618) |
(1,196) |
||
Profit After Tax (norm) |
2,738 |
(1,372) |
1,958 |
3,123 |
||
Profit After Tax (reported) |
(7,138) |
(3,737) |
686 |
2,515 |
||
Minority interests |
(451) |
(186) |
(34) |
(125) |
||
Discontinued operations |
(1,018) |
220 |
0 |
0 |
||
Net income (normalised) |
2,275 |
(1,557) |
1,926 |
3,001 |
||
Net income (reported) |
(8,156) |
(3,703) |
652 |
2,390 |
||
Average Number of Shares Outstanding (m) |
79.5 |
81.6 |
78.2 |
78.4 |
||
EPS - normalised (p) |
|
|
2.9 |
(1.9) |
2.5 |
4.7 |
EPS - normalised continuing diluted (p) |
|
|
2.8 |
(1.9) |
2.4 |
4.6 |
EPS - basic reported (p) |
|
|
(10.8) |
(4.5) |
0.8 |
3.0 |
Dividend per share (p) |
0.00 |
0.00 |
0.50 |
1.25 |
||
EBITDA Margin (%) |
12.6 |
3.2 |
8.2 |
10.8 |
||
Normalised Operating Margin (%) |
8.2 |
-0.6 |
5.7 |
8.6 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
47,060 |
44,322 |
42,899 |
41,728 |
Intangible Assets |
35,172 |
34,698 |
33,461 |
32,289 |
||
Tangible Assets |
10,902 |
8,199 |
8,013 |
8,014 |
||
Tax, receivables, Investments & other |
986 |
1,425 |
1,425 |
1,425 |
||
Current Assets |
|
|
35,074 |
35,610 |
37,203 |
40,898 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
26,838 |
24,318 |
25,904 |
29,013 |
||
Cash & cash equivalents |
8,236 |
11,121 |
11,127 |
11,715 |
||
Other |
0 |
171 |
171 |
171 |
||
Current Liabilities |
|
|
(21,195) |
(22,189) |
(22,241) |
(23,041) |
Creditors |
(14,659) |
(15,986) |
(16,541) |
(17,340) |
||
Tax and social security |
(4,424) |
(1,953) |
(1,953) |
(1,953) |
||
Short term borrowings (incl. positive loan fees) |
22 |
45 |
45 |
45 |
||
Other incl lease liabilities |
(2,134) |
(4,295) |
(3,792) |
(3,793) |
||
Long Term Liabilities |
|
|
(23,047) |
(26,997) |
(26,997) |
(26,997) |
Long term borrowings |
(13,868) |
(19,675) |
(19,675) |
(19,675) |
||
Other long term liabilities |
(9,179) |
(7,322) |
(7,322) |
(7,322) |
||
Net Assets |
|
|
37,892 |
30,746 |
30,863 |
32,589 |
Minority interests |
1,179 |
442 |
442 |
442 |
||
Shareholders' equity |
|
|
36,713 |
30,304 |
30,421 |
32,147 |
CASH FLOW |
||||||
Op Cash Flow before WC and tax |
8,603 |
1,797 |
5,015 |
7,350 |
||
Working capital |
(702) |
4,171 |
(1,031) |
(2,309) |
||
Exceptional & other |
(2,962) |
(3,325) |
0 |
0 |
||
Tax |
(1,345) |
(2,285) |
(618) |
(1,196) |
||
Operating Cash Flow |
|
|
3,594 |
358 |
3,366 |
3,845 |
Capex |
(3,235) |
(1,316) |
(1,500) |
(1,499) |
||
Acquisitions/disposals |
23,862 |
(2,118) |
(486) |
0 |
||
Net interest |
(718) |
(550) |
(924) |
(917) |
||
Equity financing |
253 |
0 |
0 |
0 |
||
Dividends |
(1,052) |
(444) |
(450) |
(841) |
||
Other |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
22,704 |
(4,070) |
6 |
587 |
||
Opening net debt/(cash) |
|
|
27,486 |
5,610 |
8,509 |
8,503 |
FX |
(204) |
117 |
0 |
0 |
||
Other non-cash movements |
(624) |
1,055 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
5,610 |
8,509 |
8,503 |
7,915 |
Source: Company accounts, Edison Investment Research
|
|
Research: Industrials
Solid State’s FY21 results were slightly ahead of consensus estimates, which were upgraded in February and again in April. Encouraged by a strengthening order book, management has confirmed its commitment to the goal it set in 2017 of doubling EPS to 60p/share by FY22, so the consensus EPS estimate has been increased by 9%.