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Research: TMT
YOC issued its FY22 guidance in its FY21 results, anticipating for accelerated revenue growth and margin improvements in the year. Performance will continue to be driven by its proprietary ad formats and high-margin VIS.X strategy, with both benefiting from planned developments in the year. In addition to strong revenue and profit growth, its FY21 results showed a significant improvement in its financial position.
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YOC |
Establishing a strong track record
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TMT |
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28 April 2022 |
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YOC issued its FY22 guidance in its FY21 results, anticipating for accelerated revenue growth and margin improvements in the year. Performance will continue to be driven by its proprietary ad formats and high-margin VIS.X strategy, with both benefiting from planned developments in the year. In addition to strong revenue and profit growth, its FY21 results showed a significant improvement in its financial position.
Guidance highlights positive momentum
YOC issued its guidance for FY22 alongside its FY21 results (analysed in detail here), anticipating for revenue to grow by 25–30% to €23.5–24.5m, EBITDA by 25–43% to €3.5–4.0m at a margin of 15.6% using the mid-point of the ranges, and net income by 11–36% to €2.3–2.8m. Adjusted for its FY20 discontinued operations in Spain, its net income anticipated growth expands to 23–38%. We believe its high-impact ad formats and VIS.X strategy will continue to drive growth, where automation allows for more transactions to be completed on the platform without the need to scale manpower. Both give YOC a competitive advantage, which it will look to sustain through continued investment in the platform. In the near term, the company aims to integrate its newly developed desktop advertising capabilities into VIS.X (currently mobile web and apps) and expects this to catalyse an increase in trading volumes. Management’s forecasts do not factor in profit distributions from its Polish subsidiary or from its recently acquired Swiss company theINDUSTRY AG. In the medium term, both are expected to be accretive to earnings.
Strong progress made in FY21
FY21 results were at the top end of its December guidance, with revenue up 22% y-o-y to €18.8m (FY20: €15.5m) and EBITDA up 56% to €2.8m (FY20: €1.8m) at a margin of 15% (+3pp y-o-y). Developing relationships with new publishers across Europe increased the attractiveness of its platform, supporting the value of its proprietary ad formats and programmatic capabilities. In FY21, Nielsen produced a second study, showing that unaided brand recall is 273% higher with YOC’s high-impact formats than with standard advertising media, alongside other benefits. The group reduced its negative equity position from €4m in FY20 to €0.6m, benefiting from the conversion of its convertible bond, net income growth, and free cash flow of €1.7m. This supported the group’s move to a net cash position of €1.8m.
Valuation: Discount continues to close
Across FY22e sales and EBITDA, YOC trades at EV multiples of 2x and 13x, discounts of 49% and 3% to our peer group. This has shrunk from our last note.
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Consensus estimates
Source: YOC. *Note: Mid-point of management’s guidance. |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Metals & Mining
Endeavour’s Q122 results are scheduled for distribution to the market on 5 May. Prior to their release, we have refined our forecasts for both the quarter in question plus the remaining three quarters of the year to take into account recent changes to the gold price (US$1,890/oz at the time of writing cf US$1,926/oz previously) and some very minor operational considerations at its mines. The result has been a 1.6% increase in our forecast of adjusted net EPS from continuing operations for the quarter and a modest 2.6% reduction for the full year. Nevertheless, we remain close to the top of the range of analysts’ forecasts for the full year. On a like-for-like basis our valuation of EDV is barely changed. If the Sabodala-Massawa expansion project is added on a standalone basis, however, it increases by c 5.1–8.5%.