Shares in Mission Marketing (TMMG) slumped 9 per cent after the advertising and PR group posted a decline in first-half turnover. The company, composed of 12 agencies including Solaris and Yucca, blamed tepid media buying for its lukewarm performance.
Turnover is what Mission bills to clients, including third-party costs such as TV air-time. Strip these out and revenues were up a more encouraging 4 per cent. But half of that came from the acquisition of Solaris in 2013. Underlying sales grew 4 per cent at Mission’s core branding, advertising and digital division, and 40 per cent in the nascent PR business, but these gains were offset by declines in the media and events units. Overall, adjusted operating profit rose 3 per cent (reported earnings growth is skewed by last year's restructuring costs and write-offs).
Mission did make some notable coups, such as signing up Sainsbury’s and Samsung. It also opened a new office in Singapore and acquired Proof Communication, a PR agency specialising in science and technology. Mission's specialist business units have been "leading the charge", says chairman David Morgan.
Net debt - the company's historic bug-bear - now stands at £7.3m, or about 1.25 times cash profits, but is expected to rise in the current half. Broker finnCap expects full-year pre-tax profits of £5.5m, giving EPS of 5.1p, up from £5m and 4.5p.
| MISSION MARKETING (TMMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 45p | MARKET VALUE: | £ 35m | |
| TOUCH: | 44-45p | 12-MONTH HIGH: | 56p | LOW: 25p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 86p* | NET DEBT: | 11% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 67.6 | 0.1 | 0.1 | 0.25 |
| 2014 | 62.8 | 2.2 | 2.2 | 0.25 |
| % change | -7 | +3128 | +3100 | - |
Ex-div: 06 Nov Payment: 05 Dec *Includes intangible assets of £72m, or 94p a share | ||||
