Currency in GBP
Last close As at 17/03/2023
GBP0.53
▲ 1.00 (1.92%)
Market capitalisation
GBP77m
Research: TMT
Centaur’s year-end trading update indicates revenue of at least £41m and an EBITDA margin of more than 19.5%. Our FY22e EBITDA, PBT and EPS numbers are unchanged, showing strong growth over the prior year, albeit with a slower H222. Notwithstanding the reduced momentum, Centaur should still meet its FY23 MAP23 targets of £45m in revenue and an EBITDA margin of 23%. Given the strong cash performance, with year-end net cash of £16.0m (excluding lease debt), management has announced the payment of a special dividend of 3.0p per share, payable in February. This still leaves the group with plenty of cash to invest and grow.
Centaur Media |
Strong cash performance and special dividend |
Trading update |
Media |
19 January 2023 |
Share price performance
Business description
Next events
Analysts
Centaur Media is a research client of Edison Investment Research Limited |
Centaur’s year-end trading update indicates revenue of at least £41m and an EBITDA margin of more than 19.5%. Our FY22e EBITDA, PBT and EPS numbers are unchanged, showing strong growth over the prior year, albeit with a slower H222. Notwithstanding the reduced momentum, Centaur should still meet its FY23 MAP23 targets of £45m in revenue and an EBITDA margin of 23%. Given the strong cash performance, with year-end net cash of £16.0m (excluding lease debt), management has announced the payment of a special dividend of 3.0p per share, payable in February. This still leaves the group with plenty of cash to invest and grow.
Year end |
Revenue |
PBT* |
EPS* |
DPS** |
P/E |
Yield |
12/20 |
32.4 |
(0.3) |
0.2 |
0.5 |
247.5 |
1.0 |
12/21 |
39.1 |
3.0 |
1.9 |
1.0 |
26.7 |
2.0 |
12/22e |
41.5 |
4.5 |
2.4 |
1.0 |
20.8 |
2.0 |
12/23e |
45.0 |
6.5 |
3.2 |
1.3 |
15.6 |
2.6 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excluding special dividends.
Set to meet MAP23 targets
Our earlier estimates were for FY22 revenue of £43.5m, with a slightly lower EBITDA margin, and we have now aligned our numbers with this update, leaving our EBITDA, PBT and EPS projections unchanged. For FY23, we expect Centaur to meet its MAP23 performance targets, rather than exceed them, with our EBITDA forecast trimmed from £10.8m to £10.3m. Given the weaker trading environment since those targets were set, this remains a good result. The update did not contain any detail on the underlying performance of the business units, and we look for more information – particularly on trading at the Flagship 4 (Econsultancy, MW Mini MBA, Influencer Intelligence and The Lawyer) at the full year results on 15 March.
3.0p special dividend announced
Indicated year-end net cash of £16.0m (Centaur has lease debt only) is up 22% on the prior year and ahead of both the £14.2m at the half year and our previous forecast of £15.3m (provisionally revised to £15.8m). Given management’s preference for growing the business through internal investment and organic initiatives, this level of cash is greater than requirements and £4.4m is to be returned to shareholders via a special dividend of 3.0p, payable on 10 February 2023. Based on our model, net cash (excluding leases) would now be £14.5m at end FY23.
Valuation: Continues to be well below peers
One-year share price performances of B2B media peers have fluctuated widely, with a median setback of 23%, compared with Centaur’s price decreasing by 12%. This continues to represent a marked discount to quoted peers on EV/EBITDA (averaged over FY22–23). If this discount were to close, the shares would be 68.0p (July 2022: 77.1p), 37% above the current level.
Exhibit 1: Financial summary
£m |
2019 |
2020 |
2021 |
2022e |
2023e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
39.6 |
32.4 |
39.1 |
41.5 |
45.0 |
Other operating income |
1.6 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Cost of Sales |
(9.4) |
(7.3) |
(10.9) |
(10.8) |
(11.2) |
||
Gross Profit |
30.2 |
25.1 |
28.3 |
30.8 |
33.8 |
||
EBITDA |
|
|
4.0 |
3.8 |
6.4 |
8.1 |
10.3 |
Operating profit (before amort. and excepts.) |
|
|
(1.2) |
0.0 |
3.2 |
4.7 |
6.7 |
Amortisation of acquired intangibles |
(2.5) |
(1.5) |
(1.1) |
(0.5) |
(0.1) |
||
Exceptionals |
(4.0) |
(0.3) |
0.0 |
0.0 |
0.0 |
||
Share-based payments |
(0.1) |
(0.5) |
(0.5) |
(0.7) |
(1.0) |
||
Reported operating profit/ loss |
(7.8) |
(2.3) |
1.6 |
3.5 |
5.7 |
||
Net Interest |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
(0.2) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(1.5) |
(0.3) |
3.0 |
4.5 |
6.5 |
Profit/ Loss Before Tax (reported) |
|
|
(8.1) |
(2.6) |
1.4 |
3.3 |
5.5 |
Reported tax |
0.6 |
0.9 |
0.1 |
(0.7) |
(1.4) |
||
Profit After Tax (norm) |
(2.0) |
0.3 |
2.8 |
3.7 |
4.9 |
||
Profit After Tax (reported) |
(7.5) |
(1.7) |
1.4 |
2.6 |
4.1 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
9.4 |
(12.7) |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
0.4 |
0.4 |
2.8 |
3.7 |
4.9 |
||
Net income (reported) |
1.9 |
(14.4) |
1.4 |
2.6 |
4.1 |
||
Average Number of Shares Outstanding (m) |
143 |
144 |
145 |
147 |
147 |
||
EPS - normalised (p) |
|
|
(1.4) |
0.2 |
2.0 |
2.5 |
3.3 |
EPS - normalised fully diluted (p) |
|
|
(1.4) |
0.2 |
1.9 |
2.4 |
3.2 |
EPS - basic reported, continuing (p) |
|
|
(5.3) |
(1.2) |
1.0 |
1.8 |
2.8 |
Dividend per share (p), excluding special dividends |
1.5 |
0.5 |
1.0 |
1.0 |
1.3 |
||
Revenue growth (%) |
(2.5) |
(15.6) |
20.6 |
6.2 |
8.2 |
||
Gross Margin (%) |
76.3 |
77.5 |
72.2 |
74.0 |
75.1 |
||
EBITDA (IFRS) Margin (%) |
10.1 |
11.7 |
16.4 |
19.5 |
23.0 |
||
Normalised Operating Margin (%) |
(3.0) |
0.0 |
8.2 |
11.4 |
15.0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
67.4 |
52.3 |
49.6 |
48.0 |
47.7 |
Intangible Assets |
61.2 |
46.1 |
44.3 |
43.3 |
43.1 |
||
Tangible Assets |
4.3 |
3.3 |
2.5 |
2.5 |
2.4 |
||
Deferred tax |
1.4 |
2.4 |
2.5 |
1.7 |
1.7 |
||
Other receivables |
0.5 |
0.5 |
0.3 |
0.5 |
0.5 |
||
Current Assets |
|
|
19.7 |
14.3 |
19.3 |
22.1 |
21.3 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
10.3 |
5.8 |
6.1 |
6.1 |
7.0 |
||
Cash & cash equivalents |
9.3 |
8.3 |
13.1 |
15.7 |
14.0 |
||
Other |
0.1 |
0.2 |
0.2 |
0.2 |
0.2 |
||
Current Liabilities |
|
|
(23.3) |
(17.7) |
(21.1) |
(20.7) |
(21.6) |
Creditors |
(12.5) |
(8.7) |
(11.4) |
(9.8) |
(10.0) |
||
Tax and social security |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Short term borrowings |
0.0 |
0.0 |
(0.0) |
(0.0) |
(0.0) |
||
Other/ Lease liabilities |
(10.8) |
(9.0) |
(9.7) |
(10.9) |
(11.6) |
||
Long Term Liabilities |
|
|
(2.7) |
(1.6) |
(0.6) |
(0.6) |
(0.6) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other long term liabilities, including leases |
(2.7) |
(1.6) |
(0.6) |
(0.6) |
(0.6) |
||
Net Assets |
|
|
61.1 |
47.2 |
47.1 |
48.8 |
46.8 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
61.1 |
47.2 |
47.1 |
48.8 |
46.8 |
CASH FLOW |
|||||||
Op Cash Flow before WC and tax |
4.5 |
(0.0) |
6.4 |
8.1 |
10.3 |
||
Working capital |
2.1 |
(1.0) |
3.2 |
(0.5) |
0.0 |
||
Exceptional & other |
(2.0) |
3.1 |
(0.1) |
0.0 |
(0.2) |
||
Tax |
0.1 |
0.0 |
0.0 |
0.0 |
(1.4) |
||
Operating Cash Flow |
|
|
4.7 |
2.1 |
9.5 |
7.6 |
8.8 |
Capex |
(1.6) |
(0.8) |
(0.8) |
(1.3) |
(1.7) |
||
Acquisitions/disposals |
16.3 |
0.1 |
0.0 |
0.0 |
0.0 |
||
Net interest |
(0.2) |
(0.1) |
(0.1) |
(0.2) |
(0.2) |
||
Equity financing |
(0.6) |
0.0 |
(0.3) |
(0.3) |
(0.6) |
||
Dividends |
(7.1) |
0.0 |
(1.4) |
(1.5) |
(5.9) |
||
Other |
(2.2) |
(2.2) |
(2.1) |
(1.7) |
(1.7) |
||
Net Cash Flow |
9.3 |
(1.0) |
4.8 |
2.6 |
(1.7) |
||
Opening net debt/(cash) |
|
|
(0.1) |
(9.3) |
(8.3) |
(13.1) |
(15.8) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
(0.1) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(9.3) |
(8.3) |
(13.1) |
(15.8) |
(14.5) |
Source: Company accounts, Edison Investment Research
|
|
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