The Pebble Group — Pushing more value through platform

The Pebble Group (LSE: PEBB)

Last close As at 08/09/2025

GBP0.51

0.00 (0.00%)

Market capitalisation

GBP82m

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Research: TMT

The Pebble Group — Pushing more value through platform

The Pebble Group’s interim results are in line with July’s update and show it is on track to meet full-year expectations. New business won on both sides of the group is offsetting some of the impact from weak market conditions affecting levels of marketing spend. The increased investment in sales and marketing is helping to build momentum at Facilisgroup, which grew its Partner (customer) base from 239 to 248 in the half year. Gross merchandise value across the platform increased by 4% over H124, with a small uplift in spend through the preferred supplier base. The recent tender offer returned £6.5m to shareholders. Along with dividends and the share buyback, the return now totals £11.7m. Net cash on 8 September was £1.2m.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

Media

H125 results

9 September 2025

Price 51.00p
Market cap £76m

Net cash at 8 Sept 2025

£1.2m

Shares in issue

148.7m
Free float 71.3%
Code PEBB
Primary exchange AIM
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (10.5) 12.1 (10.4)
52-week high/low 59.5p 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

Trading update

Mid-Jan 2026

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 11.1 2.4
12/24 125.3 9.7 4.43 1.85 11.5 3.6
12/25e 126.6 7.9 3.99 1.95 12.8 3.8
12/26e 131.7 8.5 4.46 2.10 11.4 4.1

Market share growth is the key goal

With Facilisgroup’s platform in place, and a rolling programme of updates to ensure that it stays optimised, the focus is now on driving the top line through increasing Partner numbers and by helping them grow. Gross merchandise value (GMV) across the platform increased by 4% over H124, with a small uplift in spend through the preferred supplier base. With tariff-induced disruption settling for now, these two key indicators should start to move more in line. At Brand Addition, the macroeconomic malaise continues to weigh on orders from existing customers, but this has been partially offset by new clients coming onboard, underpinning expectations for H225 and FY26. Pipelines for both businesses remain good.

Strong cash conversion

Pebble’s normal pattern is for a cash outflow in H1 followed by a stronger cash inflow in H2. With the capital expenditure at Facilisgroup trending down, there has been greater emphasis on operating expenditure, in leadership, teams and processes, all with an eye to driving faster top-line growth. This investment remains the top priority for cash allocation, followed by dividends and further return of capital through buybacks. Management has indicated that there also may be non-organic opportunities through acquisition.

Valuation: Remains well below peers despite gain

Difficult trading conditions have continued to depress the share prices of both Facilisgroup and Brand Addition’s peers in our sum-of-the-parts valuation. The performance of UK marketing services stocks has been exceptionally poor, with share prices dropping 25% on average year to date, while the US SaaS stocks used have fallen by 12%. In contrast, Pebble’s share price is up 12%, supported by steady trading, the share buyback and August’s tender offer at above the trading price. Our peer-derived implied valuation for the group is 77p (up from 68p per share in July, reflecting the reduced share count), 51% ahead of the current level.

Resilient H125 laying the groundwork for resumption of growth

The health of the promotional products industry is closely tied to corporate confidence, and it is North American sentiment that sets the tone. Here, uncertainty over the macroeconomic backdrop and around tariffs, particularly in Q1, is still weighing on decision-making. Pebble has been working hard to align its offering and its sales structure to take full advantage of both the current soft conditions and to position for when conditions improve.

At Facilisgroup, this involves paying close attention to Partner (client) relationships, borne out in high levels of retention. Partner numbers as at 6 September were 248, from 239 at the year-end, but this masks 18 new wins offset by three Partners being acquired and a churn rate of six (which includes those deliberately cycled out). On average, Partners trade $6.2m across the platform, in a range from $2m to $70m. Newly onboarded Partners will tend to be at the lower end of the range, growing their businesses as they take advantage of the platform’s capabilities. GMV was 4% ahead of H124 (which will be reflected in increased technology subscription fees for FY26), while the amount transacted through preferred suppliers grew at a lower rate of 1%. This reflects a degree of forward ordering earlier in the year, when tariff impacts were front and centre of supply discussions, and we would expect these trading patterns to revert to growth in line with GMV.

The leadership team has been significantly strengthened with the addition of a chief revenue officer and a VP of sales.

At Brand Addition, last year’s new client wins are helping to counter some of the weakness in spend from existing clients (no client losses in its top 30 clients). As at 7 September, orders received for FY25 stood at £82.3m, which is slightly behind the prior year, but management expects the full-year figure to match the prior year. Gross margin remains above 35%, and we would expect the adjusted EBITDA margin to recover as volumes rebuild.

Valuation

We appraise Pebble’s valuation on a sum-of-the-parts basis, using a selection of quoted US stocks with a predominantly SaaS business model for Facilisgroup and a peer set of UK marketing services companies for Brand Addition.

When we last carried out this exercise in July, the US stocks had decreased on average by 17.9% over the year to date. Since then, the performance has improved and share prices are now on average 11.5% behind where they stood at the start of the year.

The story for the UK marketing stocks is considerably less encouraging. In July, they were posting losses of 25.9% and this has now increased to 28.7%, although as revenue forecasts have been pulled back, their average EV/sales multiple has expanded.

Based on the relevant peer group averages of current year EV/sales and FY25 and FY26 EV/EBITDA, and on the reduced share count, we now derive a value for the group of 77p, up from 68p in July. Within this, Facilisgroup represents 53% of the total, down from 64%. This is 51% ahead of the current market price.

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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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