Last close As at 05/08/2026
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Research: TMT
The MISSION Group’s first-half results are as presaged in July’s trading update, with 10% growth in both revenue and operating profit. Exposure to the technology and healthcare industries is a net positive and recovery in live events and property also contributed to progress. The strengthened balance sheet equips the group to continue with infill M&A. FY22e and FY23e market estimates are unchanged, with profits (as usual) weighted to Q4, taking into account a likely less favourable trading backdrop in H222 in some operating territories. The shares have outperformed peers year to date, but continue to trade at a substantial discount.
The MISSION Group |
Good H122 despite market headwinds
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13 July 2022 |
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The MISSION Group’s first-half results are as presaged in July’s trading update, with 10% growth in both revenue and operating profit. Exposure to the technology and healthcare industries is a net positive and recovery in live events and property also contributed to progress. The strengthened balance sheet equips the group to continue with infill M&A. FY22e and FY23e market estimates are unchanged, with profits (as usual) weighted to Q4, taking into account a likely less favourable trading backdrop in H222 in some operating territories. The shares have outperformed peers year to date, but continue to trade at a substantial discount.
Building on strong foundations
Clients continue to spend but are, as ever, focused on achieving a strong return on investment. There are some good new client names on the roster, including Disney+ and Molson Coors, as well as Westmill Foods, BAM Clothing, McCarthy & Stone and Croda. Phihong in Taiwan was disclosed as a new client at the trading update, and it is particularly positive to see this has been won on a group mandate, using the services of three group agencies. Labour management remains challenging, as it is industry wide, although cost inflation is still broadly being passed on through in pricing. A new Vietnam-based digital support hub has been launched as part of the MISSION made central provision for group agencies, allowing them to concentrate on their clients and their work. Active discussions on partnerships are ongoing with respect to Pathfindr, the internally developed industrial Internet of Things solutions business. A new non-executive, Mark Lund, is joining the board as deputy chairman, bringing the credibility and experience (and contacts) of a well-known industry figure, lately the president of McCann Worldgroup UK and Europe.
Balance sheet strongest since FY14
Net debt at the half year was £7.1m, down from £10.3m at end FY21, with outstanding acquisition obligations reduced to £2.5m, mostly payable in FY25. Total debt of £9.6m, including deferred consideration, is now at the lowest absolute level since FY14. This gives plenty of scope for continuing infill M&A focused on the identified priorities of data and analytics, customer experience, including ecommerce, and performance media.
Valuation: Still well below peers
The MISSION Group’s share price is 22% below where it started the year, while other quoted smaller global advertising stocks have retrenched on average by 28%. Nevertheless, the valuation still stands at a marked discount to the FY22e peer average of 12.1x P/E and 6.9x EV/EBITDA (FY23: 9.7x and 4.8x respectively). Parity across both metrics for both years implies a share price of 76p.
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Consensus estimates
Source: Refinitiv. Note: *Normalised. |
The MISSION Group is a research client of Edison Investment Research Limited.
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Research: Healthcare
With approximately 64k global cases, monkeypox has become a growing concern and is less transient than initially acknowledged. We expect SIGA Technologies, the leading smallpox therapeutic manufacturer, to remain a beneficiary through the monkeypox epidemic. SIGA’s TPOXX therapy has a strong track record in treating smallpox, which is in the same orthopoxvirus family as monkeypox. The company’s planned submission and approval of post-exposure prophylaxis (PEP) remains a key catalyst and the use of TPOXX supports a refined approach to treating monkeypox. Reflecting what we believe are the most likely assumptions, we arrive at a valuation of $19.80/share, up from $9.17/share.