The Marketing Group PLC (ST:TMGR) aims to build a major global force in marketing services, a sector characterised by a handful of major holding companies and a large number of smaller agencies. After a rapid initial acquisition phase, an entirely new board took over (Q416/Q117) with more capital markets experience and a steadier expansion strategy. A subsequent portfolio review resulted in three disposals and an impairment charge related to past acquisitions. This should give the group a firm base from which to start building organic, as well as acquisitive, progress. These moves have yet to be reflected in the market valuation.
Building blocks in place
TMG is a network of 16 agencies across eight countries, in three disciplines: brand and communications; influence and amplification; and science and performance. The growth strategy is both organic and acquisition-based, attracting agencies that want access to capital and the benefits of network effects, yet do not wish to sell out to a holding company. Management has a technology-based approach, with improved internal reporting and a new collaboration platform. Head office supports new business initiatives, with centralised media buying where needed. The newly-installed team has been joined by Mary Keane-Dawson, who adds expertise in performance media with large, global clients and who will support the acquisition strategy. Future purchases will need to be complementary and to add value.
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