Shares in Taptica (TAP) registered a double-digit increase, after international expansion helped the mobile advertising group drive significant revenue growth in the first half (see table). The efficacy of the company’s shift away from traditional advertising channels is ever more clear: mobile business represented 91 per cent of sales, compared with 79 per cent a year earlier.
A partnership with Adinnovation in Japan developed into Taptica taking a majority stake in the mobile advertising specialist after the reporting period. The $5.7m (£4.2m) deal gives Taptica exposure to the “next key growth market for mobile advertising”. And chief executive Hagai Tal notes that one of Japan’s largest advertising agencies, DAC, is still a shareholder. The Asia Pacific market remains a focus, but a UK office was opened during the period, and Mr Tal says that target markets include Germany, Italy and France.
The net cash position improved significantly to $32.6m, from $21.5m at the year-end. After 30 June, $4.4m was paid towards the Japanese acquisition, and the group also purchased a platform from Tremor Video for video advertising optimisation. At a cost of $50m, this used up cash and drew on a $30m loan facility from HSBC.
Analysts at Berenberg forecast pre-tax profits of $28m and EPS of 36¢ for the year to December 2017, up from $20m and 26.3¢ in 2016.
| TAPTICA (TAP) | ||||
| ORD PRICE: | 384p | MARKET VALUE: | £237m | |
| TOUCH: | 380-388p | 12-MONTH HIGH: | 438p | LOW: 139p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 93¢* | NET CASH: | $32.6m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢)** |
| 2016 | 51.8 | 6.9 | 9.3 | nil |
| 2017 | 65.6 | 10.3 | 14.4 | nil |
| % change | +27 | +51 | +55 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of $32m or 51¢ a share. **Taptica does not pay interim dividends £1 = $1.34 | ||||
