The Pebble Group — On track, with further tender offer

The Pebble Group (LSE: PEBB)

Last close As at 11/07/2025

GBP0.49

0.00 (0.00%)

Market capitalisation

GBP78m

More on this equity

Research: TMT

The Pebble Group — On track, with further tender offer

Pebble Group’s H125 update indicates trading is on track to meet FY25 market expectations, despite a difficult macroeconomic backdrop and currency headwinds. We have made small forecast revisions to reflect the latter. Facilisgroup is starting to see the benefits of investment shifting from product development to sales and marketing, translating into new partner wins, while Brand Addition’s order values are picking up, with new contract wins set to contribute from H225. The group has healthy and improving cash conversion, with net cash at end H125 of £6.0m (excluding leases). A further share buyback via tender of up to £6.5m is set to be launched later this month, following the previous £3.6m programme, completed in May.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

Media

H125 trading update

11 July 2025

Price 48.50p
Market cap £77m

Net cash excluding leases as at 30 June 2025

£6.0m

Shares in issue

159.4m
Free float 80.2%
Code PEBB
Primary exchange AIM
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 6.6 40.1 (12.6)
52-week high/low 58.8p 32.6p

Business description

The Pebble Group provides digital commerce, products and related services to the global promotional products industry through two focused, complementary and differentiated businesses: Facilisgroup and Brand Addition.

Next events

H125 results

9 September

Analyst

Fiona Orford-Williams
+44 (0)20 3077 5700

The Pebble Group is a research client of Edison Investment Research Limited

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. EPS are fully diluted.

Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
12/23 124.2 9.9 4.59 1.20 10.6 2.5
12/24 125.3 9.7 4.43 1.85 10.9 3.8
12/25e 126.6 7.7 3.70 1.95 13.1 4.0
12/26e 131.7 8.5 4.16 2.10 11.7 4.3

Incremental improvements in both businesses

At Facilisgroup, the update points to promising progress in new partner wins. Gross merchandise value, a key indicator of the health of the business, is slightly up on the prior year, as it was at the time of the 3 June AGM update. Purchases through the group’s preferred suppliers are now in line, implying a better recent trading period, having been slightly below at the previous update. At Brand Addition, total orders by value were 7% shy of prior year in early June, with H125 revenues now expected to be 4% softer. New contract wins should boost the H2 performance. We have made a precautionary 1% and 5% trim to our revenue and operating profit forecasts respectively to reflect currency and the uncertain macroeconomic backdrop. The potential imposition of further tariffs may lead to more substantive impacts, with the outlook likely to be clearer by the interim results, scheduled for 9 September.

Further tender offer planned

With peak spend on Facilisgroup now complete, Pebble is generating surplus cash and prioritising returns to shareholders. It intends to launch a further share buyback programme, with full details expected on 21 July. The previous programme ended in June, with £3.6m (£1.4m in FY24 and £2.2m in FY25). This new tender is for up to £6.5m. Our modelling builds in the buybacks as they happen, so our projection of year-end net cash (excluding leases) of £16.1m is before any associated spend.

Valuation

Difficult trading conditions have continued to weigh on the share prices of the peer sets we use for both Facilisgroup and Brand Addition in our sum-of-the-parts valuation. The performance of UK marketing services stocks has been particularly poor, with share prices dropping 20% on average, while the US SaaS stocks used have fallen by 14%. In contrast, Pebble’s share price is up 7%, supported by the steady trading and share buyback. Our peer-derived implied valuation for the group is now 68p per share, from 71p in March, still 40% ahead of the current level.

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This report has been commissioned by The Pebble Group and prepared and issued by Edison, in consideration of a fee payable by The Pebble Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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