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Research: TMT
Ebiquity has announced the proposed disposal of its Advertising Intelligence (AdIntel) business to Nielsen for £26m (a multiple of 1.2x sales and 5.9x operating profits). The AdIntel business is platform-based and made up the bulk of the group’s Market Intelligence segment. The disposal will allow Ebiquity to focus investment and resources in growing its tech-enabled consultancy practices (MVM and MPO), which have historically been faster growing. The pre-close trading update indicates that after a difficult H117 in the US, progress has been made and growth ex-US has been good. Our forecasts are currently being updated.
Written by
Ebiquity |
Disposal of AdIntel |
Disposal and trading update |
Media |
14 February 2018 |
Share price performance
Business description
Analysts
Ebiquity is a research client of Edison Investment Research Limited |
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Ebiquity has announced the proposed disposal of its Advertising Intelligence (AdIntel) business to Nielsen for £26m (a multiple of 1.2x sales and 5.9x operating profits). The AdIntel business is platform-based and made up the bulk of the group’s Market Intelligence segment. The disposal will allow Ebiquity to focus investment and resources in growing its tech-enabled consultancy practices (MVM and MPO), which have historically been faster growing. The pre-close trading update indicates that after a difficult H117 in the US, progress has been made and growth ex-US has been good. Our forecasts are currently being updated.
Year end |
Revenue (£m) |
EBIT* |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/15 |
76.6 |
12.4 |
11.2 |
10.8 |
0.40 |
9.3 |
0.4 |
12/16 |
83.6 |
13.0 |
11.8 |
11.3 |
0.65 |
8.8 |
0.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The proposed disposal of AdIntel, subject to UK CMA approval, will allow the group to focus its resource on the areas of its business with greatest potential for growth and higher margins, in line with the group’s Growth Acceleration Plan (see our September 2017 Outlook note). The sale proceeds will reduce the pro forma net debt/EBITDA ratio from 2.1x to 1.0x as at end December 2017, facilitating additional investment in enhancing the group’s tech-enabled consultancy offering.
The pre-close trading update indicates some improvement in US trading in H2, with new leadership in place and good client wins, including McDonald’s and Citibank. However, the overall US performance for the year has weighed on the top line and on operating margin. Overall market positioning has been improving, with wins against key competitors in MVM and MPO generating its first multi-market business. Our forecasts are currently being updated.
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Research: Investment Companies
HBM Healthcare Investments (HBMN) reported profits of CHF72m for the third quarter of its financial year, buoyed by the takeover of long-term holding Advanced Accelerator Applications (AAA). The Switzerland-based fund invests globally in public and private healthcare companies and private equity funds, and is working to build its private company exposure back up towards long-term average levels following a strong period of IPOs and trade sales. The managers take a risk-aware approach to what can be a volatile sector, and have been taking profits on the back of clinical successes, as well as hedging c 20% of the listed equity exposure through a short position in an ETF tracking the NASDAQ Biotechnology index. The discount to NAV has narrowed in line with the general trend for investment companies, but remains wider than those of peers whose sole or main focus is listed equity markets. HBMN’s shares currently yield 4.3%.