Rescued marketing company is now thriving Shares in The Mission Marketing Group (‘The Mission’) have risen sharply since the financial crisis. The company is now paying dividends and group debt has been reduced significantly.
The Mission is a collection of marketing communications and advertising companies. The group employs a total of 850 staff in the UK, Asia and San Francisco. The Mission has been built via a series of acquisitions. The group now comprises twelve operating companies.
further acquisitions announced in October and November of 2014 Announcements from the company are frequently littered with the type of patter that seems (exclusively) popular among marketing professionals. Recent interims touched upon a small change in the company’s acquisition strategy, articulated as a ‘plan to step up the introduction of tautoousian Agencies that can work alongside our existing [agencies]’. My dictionary defines ‘tautoousian’ as ‘being identically of the same nature’. The Mission duly delivered on this promise, with further acquisitions announced in October and November of 2014. The first of these was the acquisition of 70% www.aimprospector.co.uk
of an ‘Asian-focused digitally-led marketing services agency group, Splash Interactive’. This was followed in November by the acquisition of London-based PR firm Speed Communications. In late January, The Mission provided a trading statement for the full year ending the previous December. Management expressed its expectation for the year to be in-line with the market’s (which AIM Prospector takes to be consensus of 5.0p EPS and a dividend of 1.1p). The Mission also confirmed that debt levels had been further reduced. Another acquisition followed in February as specialist digital agency The Weather Digital and Print Communications joined the group. The business textbook says that marketing firms such as The Mission do well in economic recovery, as companies begin to feel more confident that there is value in promoting their products again. The Mission’s current share price rating suggests that the market retains some worries over the company’s long-term health. Any such fears appear to be overdone.
would be the fourth successive year of EPS increases June, the balance sheet showed a net current liability of £1.5m and a further £7.0m of bank debt. In aggregate, this was around £2m better than six months previous. Another £2.4m was raised via an equity placing in October. Four years ago, The Mission’s EBITDA was £5.5m. Debts were more than three times this. The company’s market capitalisation was around £10m. A dramatic turnaround has been achieved. 2014 is now expected to be the fourth successive year of EPS increases at the company. A 14% increase in EPS is expected in 2015. Since preparing this article its author, David O’Hara, has purchased shares in The Mission Marketing Group.
The Mission Marketing Group (LON:TMMG) FOR Positive momentum in the business Undemanding valuation AGAINST Acquisitions present integration risk
expectation for the year to be in-line
Sentiment overhang needs to clear
After struggling under heavy borrowings in the depths of the financial crisis, The Mission has been paying down debt fast. At the end of
P/E (forecast) Yield (forecast) 52week low:high
£34m 40p:42p 8.4 2.7% 37p:57p 3
Published on Mar 3, 2015