Ebiquity: Good Interim Rsults Despite Currency Headwinds
Edison | Jan 28, 2015 06:50AM ET
Good trading in spite of FX headwinds in H115
Ebiquity Plc's (LONDON:EBQ) H115 results show good progress, in spite of currency headwinds, which affected revenue by £1.6m leaving both reported underlying PBT and EPS broadly unchanged. On a constant currency basis, revenue rose 12% to £36.6m, with 6% being organic growth, and this would have led to increases of 17% in underlying PBT and 14% in diluted EPS. Management says there is a significant pipeline of domestic and international business across the group and is proposing a progressive dividend policy with the commencement of a maiden dividend for FY15.
During H115 the group’s two key segments, Media Value Measurement (MVM) and Marketing Performance Optimization (MPO), showed strong growth on a constant currency basis. The remaining segment, Market Intelligence (MI), is beginning to show signs of recovery in some markets. With continuing strong demand for data analytics and performance measurement, we maintain our FY15 and FY16 revenue, PBT and EPS estimates on the proviso that the dampening effect from currency fluctuations since H115 continues with rates at January 2015 levels.
Increasing momentum behind ‘big data’ analytics
The increasing availability of data is changing marketing into a science. Data and data analytics is a major concern of global CMOs as analysis of data can enable businesses to improve their performance and profitability. Unilever has recently stated that it has achieved significant efficiencies in the cost of producing its advertising during 2014, emphasising that “It is not just what we spend but how we spend that really matters” and has indicated this process will continue in 2015.
Valuation: Significant discount to proxy comparators
With few companies having the skills or technology to fully take advantage of the increased availability of marketing data, Ebiquity is well placed to take advantage of the growing market for data analytics, especially as it is regarded as independent, transparent and objective, combined with the group’s global data sources in media buying and competitive insights. Ebiquity is trading at a significant discount to all of our suggested metrics when compared to selected proxy comparators, although some level of discount might be expected against larger-cap companies. Although currency fluctuations remain a wildcard in the short term, we believe that in the medium term Ebiquity can grow EPS at 10+% pa through organic growth, economies of scale and further acquisitions.
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