Shrinking advertising budgets, volatile markets and rampant online fraud continue to drive businesses to Ebiquity (EBQ), where they hope to get bang for their marketing buck. The company's constant-currency sales rose 5 per cent in the reported period, fuelling a 16 per cent rise in adjusted operating profits to £4.8m.
Aim-listed Ebiquity crunches data for more than 1,100 clients to help them understand and optimise their marketing strategies. Its first-half growth reflected higher sales and profits in its key measurement business, as well as a 29 per cent rise in underlying turnover at its smaller but higher margin data analytics and technology division. Growth in those divisions, together with lower overheads, conspired to widen the group's constant-currency operating margin by 1.2 percentage points to 13.1 per cent.
Weaker demand for project-based services meant underlying marketing intelligence sales slid 6 per cent. But the segment's renewal rate improved and management is starting to see platform investments and the group's growing profile revive growth in some markets.
New chief Michael Karg is confident that recent client wins and product investments will underpin further progress in 2016. Ebiquity is changing its year-end to December, and broker Numis pegs pre-tax profits for 2015 at £11.1m, giving EPS of 10.7p, compared with £8.2m and 7.5p in FY2014.
| EBIQUITY (EBQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 144p | MARKET VALUE: | £ 111m | |
| TOUCH: | 143-145p | 12-MONTH HIGH: | 148p | LOW: 122p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 63p* | NET DEBT: | 63% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 35.0 | 0.6 | -0.3 | nil |
| 2015 | 35.6 | 2.5 | 2.1 | nil |
| % change | +2 | +332 | - | - |
*Includes intangible assets of £71.8m, or 93p a share | ||||
