InternetQ (INTQ) reported the kind of robust half-year performance that investors would have hoped for from a company with significant emerging markets exposure. Impressive organic revenue growth flowed directly into earnings, with the cash profit having jumped 29 per cent year-on-year to €4.6m (£3.9m). Meanwhile, foreign exchange gains on finance income, totalling €1.1m, helped boost reported profits.
The main mobile marketing business grew revenue by 28 per cent year-on-year to €33.3m as the company moved into new geographies. The Middle East and North Africa collectively boosted sales by 55 per cent, although Asia and Europe - the core regions - were only able to hold revenues steady. Meanwhile, Akazoo - InternetQ’s online music streaming service - is growing at an even faster rate, even though it still accounts for just 17 per cent of group revenues. Management is confident that Akazoo will turn in a strong second half performance and meet RBC Capital Markets' full-year revenue estimates of €18.4m, representing 61 per cent year-on-year growth.
Post period-end, InternetQ raised £10m in new capital, £5m of which it used to acquire Atlas, a German billing and digital content distributor. RBC expects full-year pre-tax profit of €11m, giving EPS of 25¢ (from €6.9m/18.2¢ in 2012), rising to 32.6¢ in 2014.
INTERNETQ (INTQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 325p | MARKET VALUE: | £125m | |
| TOUCH: | 315-325p | 12-MONTH HIGH: | 360p | LOW: 168p |
| DIVIDEND YIELD: | nil | PE RATIO: | 17 | |
| NET ASSET VALUE: | 129¢* | NET CASH: | €5.27m** | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 32.8 | 1.89 | 5.00 | nil |
| 2013 | 43.0 | 3.60 | 10.0 | nil |
| % change | +31 | +90 | +100 | - |
*Includes intangible assets of €18m, or 47¢ a share **Includes restricted cash of €0.18m £1=€1.19 | ||||
