"Profits up, debt down and expectations high." So reads the opening line in Mission Marketing Group (TMMG) chairman David Morgan's interim results summary. But no matter how the communications group words its messages, its marketing skills are clearly leaving a strong impression on its customers. This was underlined by a string of client wins in the six months to June, including BMW, British Airways, Diageo (DGE), RAC and Siemens .
These new contracts, combined with recent acquisitions, drove gross profits up 12 per cent. Exclude restructuring costs of £0.6m and that sent operating profits up 15 per cent to £2.4m, paving the way for Mission to hike the interim dividend by a fifth.
The payout looks affordable in light of a stronger balance sheet: net debt, which has weighed on market sentiment, fell by £1.5m to £7.9m in the period. But management expects that figure to rise by December, given the prospect of further acquisitions and the company's typically higher working capital needs in the busier second half.
Analysts at finnCap are forecasting adjusted pre-tax profit of £6.4m and earnings per share of 5.6p for the full year, a rise from £5.5m and 5.1p in 2014.
MISSION MARKETING GROUP (TMMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 45p | MARKET VALUE: | £37.6m | |
| TOUCH: | 44-46p | 12-MONTH HIGH: | 51p | LOW: 39p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 85p* | NET DEBT: | 11% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 62.8 | 2.2 | 2.24 | 0.25 |
| 2015 | 66.6 | 1.7 | 1.60 | 0.30 |
| % change | +6 | -22 | -29 | +20 |
Ex-div: 5 Nov Payment: 4 Dec *Includes intangible assets of £77.4m, or 93p a share | ||||
