Many advertising groups have suffered from the decline of desktop advertising, but exclusively mobile marketer InternetQ (INTQ) isn't among them. Soaring demand for in-app campaigns, new clients including Samsung and Gumtree and overseas expansion drove the group's first-half adjusted cash profits up 34 per cent to €13.1m (£9.7m).
InternetQ improved and added self-service features to its Minimob platform, which allows mobile carriers, brands and advertisers to conduct targeted, performance-based ad campaigns on smartphones and tablets. That contributed to a five-fold rise in revenues from smartphone-focused ad campaigns to €35m. Management also struck partnerships with overseas mobile operators; sales in Latin America rose 46 per cent to about €18m.
Rising demand for paid music-streaming service Akazoo helped InternetQ's digital entertainment division to narrow its operating loss to £0.2m. Akazoo recently received a €17m investment from private equity groups Toscafund and Penta Capital in a deal that validated the service, provided a war chest for expansion and valued InternetQ's majority stake at €72m. The downside is that management expects restructuring costs and further investment to weigh on Akazoo's cash profits this year.
Broker Canaccord Genuity reduced its forecasts and now expects pre-tax profits of €16.3m this year, giving EPS of 36¢ (FY2014: €14.5m and 32¢).
INTERNETQ (INTQ) | ||||
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ORD PRICE: | 214p | MARKET VALUE: | £85m | |
TOUCH: | 214-223p | 12-MONTH HIGH: | 373p | LOW: 212p |
DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
NET ASSET VALUE: | 244¢* | NET DEBT: | 4%† |
Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
---|---|---|---|---|
2014 | 65.7 | 3.5 | 8.0 | nil |
2015 | 72.0 | 5.3 | 12.0 | nil |
% change | +10 | +51 | +50 | - |
*Includes intangible assets of €71.1m, or 179¢ a share £1=€1.36 †Excludes restricted cash of €0.6m |