Good H215 revenue growth; estimates retained
Ebiquity's (LONDON:EBQ) FY15 pre-close trading statement indicates that revenue growth accelerated in H215 from H115. The group’s two key growth divisions, which together account for c 65% of total revenue, both delivered double-digit sales growth, while its third division continued to see revenue affected but at a slower rate. The FX headwinds that affected H115 PBT are at a similar level in H215. However we retain our FY15 estimates and, with a continuing ‘very strong’ pipeline and high revenue visibility, we leave FY16e unchanged. FY15 results are due on 29 July, when the board will outline its recommendation for Ebiquity's maiden dividend.
Strong growth in MPO and MVM for FY15
The group’s two key growth segments, Media Value Measurement (MVM) and Marketing Performance Optimization (MPO), both delivered double-digit sales growth in FY15, with MPO increasing more than 40%. This is continuing with increasing demand for the services in these two divisions as clients seek assistance in achieving greater data transparency and improved marketing performance. The remaining segment, Market Intelligence, continues to see revenue affected but at a slower pace than in FY14. The enhancement programme to this division’s services and delivery platform initiated during FY15 and ongoing in FY16 is expected to return this division’s revenue to modest growth.
FY15e retained
While we retain our FY15 normalised EPS estimate, the currency headwinds that affected underlying PBT by £0.6m in H115 have continued at a similar level in H215 and will affect the reported FY15 results somewhat. On a constant currency basis, we still expect overall solid growth.
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 continues to trade at a significant discount to all our suggested metrics when compared to selected proxy comparators, although some level of discount may be expected against larger-cap companies. Provided currency fluctuations remain subdued, we believe that in the medium term Ebiquity can grow EPS at 10+% pa through organic growth, economies of scale and further acquisitions.
To Read the Entire Report Please Click on the pdf File Below