Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: TMT
Ebiquity
Written by
Ebiquity |
Pick-up in activity |
Trading update |
Media |
27 January 2017 |
Share price performance
Business description
Next events
Analysts
Ebiquity is a research client of Edison Investment Research |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Ebiquity’s FY16 trading update points to 9% revenue growth (6% currency) and mid-single digit profit growth in operating and earnings. FY17 has started well with a noticeable pick up in new business activity and improved visibility; we leave our forecasts unchanged. We believe EBQ is in a strong position to execute to the growth acceleration plan presented in September 2016 and consider the 10x FY17 P/E rating unchallenging.
Year end |
Revenue (£m) |
EBIT (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14** |
69.1 |
8.0 |
6.8 |
6.6 |
0.0 |
15.5 |
0.0 |
12/15** |
76.6 |
12.4 |
11.2 |
10.8 |
0.4 |
9.5 |
0.4 |
12/16e |
84.5 |
13.8 |
12.7 |
11.0 |
0.5 |
9.3 |
0.5 |
12/17e |
92.0 |
13.3 |
12.3 |
10.0 |
0.6 |
10.3 |
0.6 |
Note: *PBT and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Unaudited pro forma figures, as year end changed to December from April in 2015.
Trading update – broadly in line
FY16 revenues increased by 9% with operating margins in line with last year (16%), converting to mid-single digit growth in operating profit and earnings. With two thirds of revenues denominated in non-sterling currencies, currency accounts for approximately £4.5m of revenue growth (of 6%), although the effect was less pronounced at the operating level. In line with management’s growth acceleration plan, the faster-growing MPO division (16% FY16e revenues) has started its expansion into new markets in Asia Pacific, with a first contract won in H216 in Australia. MVM has had a good year across all markets; however, the contract compliance division has not yet seen the expected pick-up in activity following the ANA’s summer review into media transparency. Within MI, Portfolio revenues outside the US have stabilised, although budget pressures continue to weigh on the US activities as previously indicated at the time of the interim results.
Outlook – pick up in new business activity
Management presented its growth acceleration plan in September 2016 which includes the roll-out of the MPO practice to new geographies, the development of digital services, the launch of a strategic media consultancy and the realignment of the sales function to encourage deeper service penetration into its clients. Although at the operating level FY16 headline results are slightly behind our estimates (we forecast 11% growth), we are encouraged by the announcement that to date, 2017 has seen a noticeable pick up in new business activity giving the company better visibility compared to last year; we leave our FY17 forecasts unchanged
Valuation: Unchallenging versus peers
With a strong brand, global footprint and relationships with 80% of the world’s largest 100 brands, Ebiquity stands to benefit from the increasing demand for accountability in a complex media landscape. Margins are being managed down as the company steps up investment in people and processes. Nevertheless, we consider the rating unchallenging; the 10% revenue CAGR targeted by management is at the top end of its peer group while the c 10x FY17e P/E is at the lower end (6x to 19x for the small cap agencies and market research universe).
Exhibit 1: Financial summary
£000s |
2013 |
2014 |
2015 |
2015 |
2014* |
2015* |
2016e |
2017e |
|||||
Year |
Year |
Year |
8 months |
Year |
Year |
Year |
Year |
||||||
Period ending |
30-Apr |
30-Apr |
30-Apr |
31-Dec |
31-Dec |
31-Dec |
31-Dec |
31-Dec |
|||||
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||||||
PROFIT & LOSS |
|||||||||||||
Revenue |
|
|
64,046 |
68,452 |
73,874 |
43,310 |
|
69,106 |
76,584 |
84,500 |
91,953 |
||
Cost of Sales |
(29,359) |
(30,008) |
(32,383) |
(22,514) |
N/A |
N/A |
(36,335) |
(38,620) |
|||||
Gross Profit |
34,687 |
38,444 |
41,491 |
20,796 |
N/A |
N/A |
48,165 |
53,333 |
|||||
EBITDA (norm) |
|
|
11,734 |
12,768 |
13,463 |
1,151 |
|
9,572 |
14,161 |
15,700 |
15,283 |
||
Operating Profit (before GW and except.) |
|
10,441 |
11,339 |
11,729 |
(3) |
|
7,962 |
12,411 |
13,800 |
13,333 |
|||
Intangible Amortisation |
(2,308) |
(1,873) |
(2,030) |
(1,327) |
(1,997) |
(2,000) |
(2,200) |
(2,300) |
|||||
Exceptionals (inc share-based charges) |
(628) |
(4,854) |
(3,883) |
(5,329) |
(5,818) |
(6,768) |
(3244) |
(1,000) |
|||||
Other (inc share of profit of associates) |
26 |
19 |
12 |
13 |
10 |
18 |
10 |
10 |
|||||
Operating Profit |
7,531 |
4,631 |
5,828 |
(6,646) |
157 |
3,661 |
10,044 |
9,859 |
|||||
Net Interest |
(975) |
(1,191) |
(1,171) |
(800) |
(1,164) |
(1,199) |
(1,100) |
(1,000) |
|||||
Profit Before Tax (norm) |
|
|
9,492 |
10,167 |
10,570 |
(790) |
|
6,808 |
11,230 |
12,710 |
12,343 |
||
Profit Before Tax (FRS 3) |
|
|
6,556 |
3,440 |
4,657 |
(7,446) |
|
(1,007) |
2,462 |
7,266 |
9,043 |
||
Tax |
(1,393) |
5 |
(538) |
1,332 |
N/A |
N/A |
(2,600) |
(3,000) |
|||||
Profit After Tax (norm) |
6,879 |
8,082 |
8,877 |
(214) |
N/A |
N/A |
9,215 |
8,764 |
|||||
Profit After Tax (FRS 3) |
5,163 |
3,445 |
4,119 |
(6,114) |
N/A |
N/A |
4,266 |
6,043 |
|||||
Minorities |
(119) |
(421) |
(496) |
(107) |
N/A |
N/A |
(450) |
(525) |
|||||
Net Income (norm) |
6,760 |
7,661 |
8,346 |
(336) |
N/A |
N/A |
8,764 |
9,930 |
|||||
Net Income (FRS 3) |
5,044 |
3,024 |
3,623 |
(6,221) |
N/A |
N/A |
3,816 |
5,518 |
|||||
Average Number of Shares Outstanding and equivalents (m) |
73 |
74 |
76 |
77.0 |
N/A |
N/A |
77 |
80 |
|||||
EPS - normalised (p) |
|
|
9.3 |
10.3 |
11.0 |
(0.4) |
|
N/A |
N/A |
11.4 |
10.3 |
||
EPS - normalised and fully diluted (p) |
|
9.0 |
10.1 |
10.7 |
(0.4) |
|
6.6 |
10.8 |
11.0 |
10.0 |
|||
EPS - FRS 3 (p) |
|
|
7.0 |
4.1 |
4.8 |
(8.1) |
|
N/A |
N/A |
4.9 |
6.9 |
||
Dividend per share (p) |
0.0 |
0.0 |
0.4 |
0.4 |
0.0 |
0.4 |
0.5 |
0.6 |
|||||
Gross Margin (%) |
54.2 |
56.2 |
56.2 |
48.0 |
N/A |
N/A |
56.4 |
57.0 |
|||||
EBITDA Margin (%) |
18.3 |
18.7 |
18.2 |
2.7 |
13.9 |
18.5 |
18.5 |
18.6 |
|||||
Operating Margin (before GW and except.) (%) |
16.3 |
16.6 |
15.9 |
0.0 |
11.5 |
16.2 |
16.3 |
14.5 |
|||||
BALANCE SHEET |
|||||||||||||
Fixed Assets |
|
|
64,852 |
74,173 |
77,908 |
73,594 |
|
N/A |
73,594 |
75,994 |
76,744 |
||
Intangible Assets |
60,506 |
69,547 |
73,274 |
68,354 |
N/A |
68,354 |
70,654 |
70,954 |
|||||
Tangible Assets |
3,061 |
3,162 |
3,194 |
2,928 |
N/A |
2,928 |
3,028 |
3,478 |
|||||
Other |
1,285 |
1,464 |
1,440 |
2,312 |
N/A |
2,312 |
2,712 |
3,262 |
|||||
Current Assets |
|
|
29,504 |
33,386 |
39,174 |
33,073 |
|
N/A |
33,073 |
36,882 |
44,099 |
||
Trade Debtors |
13,890 |
15,683 |
17,390 |
16,283 |
N/A |
16,283 |
19,678 |
22,673 |
|||||
Other |
8,505 |
11,182 |
12,489 |
8,035 |
N/A |
8,035 |
8,045 |
8,055 |
|||||
Cash |
7,109 |
6,521 |
9,295 |
8,755 |
N/A |
8,755 |
9,158 |
13,371 |
|||||
Current Liabilities |
|
|
(26,551) |
(29,184) |
(29,161) |
(27,473) |
|
N/A |
(27,473) |
(28,724) |
(30,044) |
||
Trade Creditors |
(4,611) |
(4,989) |
(3,866) |
(3,538) |
N/A |
(3,538) |
(21,523) |
(22,843) |
|||||
Other |
(19,761) |
(21,252) |
(21,473) |
(19,134) |
N/A |
(19,134) |
(2,400) |
(2,400) |
|||||
Short term borrowings |
(2,179) |
(2,943) |
(3,822) |
(4,801) |
N/A |
(4,801) |
(4,801) |
(4,801) |
|||||
Long Term Liabilities |
|
|
(25,689) |
(33,858) |
(39,263) |
(36,785) |
|
N/A |
(36,785) |
(36,785) |
(36,785) |
||
Long term borrowings |
(20,238) |
(26,235) |
(31,880) |
(32,615) |
N/A |
(32,615) |
(32,615) |
(32,615) |
|||||
Other long term liabilities |
(5,451) |
(7,623) |
(7,383) |
(4,170) |
N/A |
(4,170) |
(4,170) |
(4,170) |
|||||
Net Assets |
|
|
42,116 |
44,517 |
48,658 |
42,409 |
|
N/A |
42,409 |
47,366 |
54,014 |
||
CASH FLOW |
|||||||||||||
Operating Cash Flow |
|
|
7,526 |
6,799 |
7,927 |
5,028 |
|
N/A |
11,515 |
10,912 |
13,607 |
||
Net Interest |
(701) |
(841) |
(1,623) |
(588) |
N/A |
(1,009) |
(999) |
(1,100.0) |
|||||
Tax |
(1,582) |
(1,159) |
(1,618) |
(892) |
N/A |
(1,062) |
(2,600) |
(3,000) |
|||||
Capex |
(1,244) |
(2,552) |
(3,128) |
(1,328) |
N/A |
(1,986) |
(2,200) |
(3,000) |
|||||
Acquisitions/disposals |
(7,264) |
(9,308) |
(5,462) |
(4,107) |
N/A |
(4,530) |
(4,300) |
(2,000) |
|||||
Financing |
259 |
(94) |
127 |
261 |
N/A |
344 |
(309) |
(395) |
|||||
Dividends |
0 |
0 |
0 |
(291) |
N/A |
(291) |
(300) |
(375) |
|||||
Net Cash Flow |
(3,006) |
(7,155) |
(3,777) |
(1,917) |
N/A |
2,981 |
403 |
4,212 |
|||||
Opening net debt/(cash) |
|
|
11,869 |
15,308 |
22,657 |
26,407 |
|
N/A |
31,563 |
28,661 |
28,258 |
||
HP finance leases initiated |
0 |
0 |
0 |
0 |
N/A |
0 |
0 |
0 |
|||||
Other |
(433) |
(194) |
27 |
(337) |
N/A |
(79) |
0 |
0 |
|||||
Closing net debt/(cash) |
|
|
15,308 |
22,657 |
26,407 |
28,661 |
|
31,563 |
28,661 |
28,258 |
24,045 |
||
Source: Ebiquity data, Edison Investment Research. Note: *Pro forma data as supplied by Ebiquity. Year end changed to December from April in 2015.
.
|
|
Research: Healthcare
Paion has taken an important step towards its goal of US approval for its ultra-fast-acting sedative, remimazolam with the announcement of positive top line results from a safety study in high risk colonoscopy patients. It is approaching another important milestone, with the confirmatory Phase III in bronchoscopy patients expected to complete recruitment soon; top line results are likely about two months later. Paion is on track to file for approval in both the US (in procedural sedation via partner Cosmo Pharmaceuticals) and Japan (for general anaesthesia) by mid-2018.