The Mission Marketing Group's (LON:TMMG) year-end trading update indicates that the group continued its good performance in its traditionally stronger second half, albeit at a lower premium than first half progress. FY16 revenue and headline profit were up 8.0%, higher than GroupM’s estimate of UK ad spend growth at 7.2% and the 6.3% average top-line growth of the quoted smaller agency sector. Collaboration between the mission’s networked agencies continues to extend, with the strong (and loyal) client roster giving a deep pool in which to win a greater share of spend. The valuation discount to the sector has reduced, but remains unjustifiably large.
Organic progress set for FY17
The implication from the statement is that FY16 headline profit will come in slightly (£0.2m) shy of the broker forecast for FY16, with FY17 numbers held, implying profit growth in that year of over 10%. With no sizeable acquisitions in FY16, this indicates confidence in the potential for organic progress of the underlying business. Full final results are set to be released on 23 March. The mission’s capabilities continue to achieve external recognition both through industry awards and with group agencies having secured three places on the government’s newly announced Communications Services roster for tactical campaigns. A new incentive scheme for board and operational management is planned for end Q117.
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