Three years ago Mission Marketing Group (TMMG) was a basket case owing millions not only to its bank but to vendors of marketing businesses it bought in an 18-month buying spree in 2006 and 2007. Those acquisitions cost around £50m. New management was appointed in April 2010 and this was followed by a debt reduction programme over three years.
At end-December 2009, borrowings were right up against a limit of £20.3m; three years on and net debt is down to just over £12m and gearing has more than halved. Along the way there has been a rescue placing, but never since the company went public in 2006 has its leverage ratio (ratio of net bank debt to underlying cash profits) been below two times as it is now.
Mission offers a wide range of marketing media and non-financial public relations services from bases outside London. Half of last year’s turnover came from advertising agencies and much of the balance from organising media campaigns. And with finances apparently sorted, the company is now talking openly about not only paying a dividend but also "strategic and opportunistic acquisitions to accelerate growth". Broker finnCap forecasts a dividend of 1p a share this year as revenues are anticipated to rise 10 per cent to £129m. On the same basis adjusted profits increase from £4.9m to £5.8m which pushes up adjusted EPS from 4.5p to 5.5p.
THE MISSION MARKETING (TMMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 35.75p | MARKET VALUE: | £27.5m | |
| TOUCH: | 34.5-37p | 12-MONTH HIGH: | 41.75p | LOW: 20p |
| DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
| NET ASSET VALUE: | 81p* | NET DEBT: | 20% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 104 | 7.25 | 16.14 | 0.36 |
| 2009 | 86 | -0.87 | -5.54 | nil |
| 2010 | 90 | 1.62 | 1.67 | nil |
| 2011 | 116 | 4.11 | 4.35 | nil |
| 2012 | 117 | 4.68 | 4.68 | nil |
| % change | +1 | +14 | +8 | - |
Aim: Advertising. *Includes intangible assets of £71.4m, or 93p a share. | ||||
