- 13 per cent earnings beat
- Closing net cash above forecast
London-based social and digital media group Brave Bison (BBSN:2.6p) has delivered a resilient trading performance and outperformed full-year guidance.
Buoyed by a pick-up in activity in the autumn when the group announced £4mn of account wins with a Finnish homeware retailer, Dutch car parts retailer and a national electrical retailer, full-year pre-tax profit surged from £2.6mn to £3.6mn, or £0.5mn higher than house broker Cavendish forecast. It’s a more profitable business, too, as the 23 per cent rise in full-year gross profit to £20.8mn significantly outpaced the 12 per cent growth in full-year revenue of £35.5mn.
The extra profit boosted closing net cash 10 per cent to £6.8mn (0.4p), a sum that should hit £9.1mn (0.5p) by the year-end. Analysts point out that recycling this year’s estimated average cash pile of £8mn into earnings accretive acquisitions would add around £1mn of annual net profit. The cash position de-risks the investment case as does the focus on social and digital media business segments, factors that are not reflected in a price/earnings (PE) ratio of 10 nor a cash-adjusted PE ratio of 8.
The 46 per cent rally in the share price since my last buy call has further to run (‘Media firm Brave Bison wins £4mn of new contracts’, 13 November 2023). Buy.
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