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Currency in GBP
Last close As at 08/06/2023
GBP0.94
▲ −0.50 (−0.53%)
Market capitalisation
GBP157m
Research: TMT
The Pebble Group’s end-FY22 trading update discloses that both of its operations, Facilisgroup and Brand Addition, have traded well and that the group results will be ‘at least’ in line with market expectations. Facilisgroup is growing its Partner base and increasing spend per Partner, with its new Commercio all-in-one e-commerce solution ramping up to over 100 customers by the year-end. Brand Addition’s revenues were up 12%, on increased gross margin, despite supply chain disruption. Group year-end net cash of c £15.0m is a little ahead of our modelled £14.4m (excluding leases). This good performance and the opportunities for further progress are not, in our opinion, fully reflected in the share price.
The Pebble Group |
FY22 ‘at least’ in line |
Trading update |
Media |
17 January 2023 |
Share price performance
Business description
Analysts
The Pebble Group is a research client of Edison Investment Research Limited |
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The Pebble Group’s end-FY22 trading update discloses that both of its operations, Facilisgroup and Brand Addition, have traded well and that the group results will be ‘at least’ in line with market expectations. Facilisgroup is growing its Partner base and increasing spend per Partner, with its new Commercio all-in-one e-commerce solution ramping up to over 100 customers by the year-end. Brand Addition’s revenues were up 12%, on increased gross margin, despite supply chain disruption. Group year-end net cash of c £15.0m is a little ahead of our modelled £14.4m (excluding leases). This good performance and the opportunities for further progress are not, in our opinion, fully reflected in the share price.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
82.4 |
5.5 |
2.7 |
0.0 |
32.3 |
N/A |
12/21 |
115.1 |
10.0 |
4.7 |
0.0 |
18.6 |
N/A |
12/22e |
133.0 |
11.9 |
5.6 |
0.0 |
15.7 |
N/A |
12/23e |
142.5 |
13.5 |
6.1 |
0.0 |
14.5 |
N/A |
12/24e |
147.0 |
14.1 |
6.3 |
0.0 |
13.9 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Facilisgroup’s Partner base for its core Syncore product has expanded 9% across the year, while the gross merchandise value (GMV) transacted expanded 22% to $1.40bn, showing increasing confidence by those Partners. The proportion of that GMV spent with Syncore’s preferred suppliers increased from 30% in FY21 to 33% for FY22. Commercio was launched in June 2022 and by the time of our initiation of coverage at the beginning of November had signed 45 customers. By the year-end, this had built to over 100. The ambition is to build towards group recurring revenues of $50m and how Commercio will contribute to this total will become clearer as the operation becomes more established.
Brand Addition, which works with global brands delivering their corporate promotions and consumer programmes, grew its revenues by 12% to over £115m, which implies more modest H222 growth (of c 2%) after a particularly strong H122.
Indicated group revenue of c £133.0m is exactly as per our model, with adjusted EBITDA of ‘approaching £18m’ a tad ahead of our forecast of £17.6m, despite the investment in developing the tech stack at Facilisgroup. The cash performance was also a little ahead of our modelling and doubtless more will be disclosed on this with the results on 21 March.
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Research: Financials
We are adjusting our forecasts for Secure Trust Bank (STB) to better reflect the deteriorating economic outlook in the UK. We have raised our FY22 forecast for PBT from continuing operations by 1%, but reduce it by 15% in FY23. Lower loan growth in 2023 is the key driver; we now estimate growth of 13% in FY22 and 7% in FY23. The impairment charge rate for FY23 has been upped from 1.3% to 1.4%. We have also raised our run-off cost estimates in discontinued operations by £2.6m and £2.0m for FY22 and FY23. Despite our lower FY23 forecasts, the estimated ROE of 9% in both years shows strong business resilience given the cyclical nature of the banking sector. We have maintained a dividend payout ratio of 25% in line with to company policy. STB’s capital position remains comfortable with a CET1 ratio of 14.2% in FY22 and 13.7% in FY23.
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