AIMprospector
Event Review continued… Miton Group
The Mission Marketing Group*
After a history of several corporate restructurings, Miton is trying to differentiate itself from the myriad ‘long-only’ asset management firms. Fund managers in the group are encouraged to pursue value stocks with low volatility premium returns within single strategy funds. This business plan, developed by Managing Director Gervais Williams, is already delivering. The CF Miton Multi-Cap Income Fund is enjoying strong net inflows and excellent ratings. Miton’s ambitious sales efforts have seen marketing staff at the Group now outnumber portfolio managers. The sale of Miton’s Liverpool business (AUM of £0.4bn) accounted for a large portion of the fall in Assets Under Management (AUM) to £2.1bn in H1 2015. The result was a decline in net revenue of 26% to £7.1m. However, a positive result of £0.6m was reached compared with a loss for the same period last year, caused by exceptional charges related to losses of £12m on the disposal of Miton Capital Partners. Further inflows since the interims have lifted AUM to £2.36bn by end-August and a star portfolio manager has been recruited for the launch of a new European equities fund in Q4. Altogether, the revenue outlook for H2 is for a continuation of the recovery enjoyed in Q2. The effects of the new marketing effort are clearly being enjoyed and should contribute to a strong finish to 2015.
The Mission Marketing Group is run by a twelve-person board consisting of nine executive directors (the CEOs of the member agencies) and three non-executive directors. The company has prospered since a major restructuring in 2010. Management strategy is to mould the client offering from three groups of professionals: ‘integrated generalists’, ‘activity specialists’, and ‘sector specialists’. Executive Chairman David Morgan refers to the confluence of this expertise as ‘concinnity’ – where referrrals to other agencies within the Group result in enhanced aggregate sales. This is demonstrated by the performance of The Mission’s PR agency Proof, where a series of joint pitches with advertising agency April Six have seen Proof deliver a profit for the first six months of the year that is equal to their result for the entire previous twelve months. The Mission should be a classic recovery story. All an investor needs is faith in the skill and charisma of the current executive chairman David Morgan in successfully knitting together a mini WPP. Brokers are forecasting approximately 10% profit growth for each of the coming two years. The company’s single digit forward PE and discount to listed peers suggests that there is still some scepticism as to whether The Mission is fully extracting the corporate/financial synergies of its structure. * at the time of publishing, David O’Hara, Editor of AIM Prospector, is a shareholder in The Mission Marketing Group.
Miton Group (LON:MGR)
The Mission Marketing Group (LON:TMMG)
Market cap Price (p) P/E (forecast) Yield (forecast)
£46m
Market cap
£39m
28p
Price (p)
47.5p
22.5
P/E (forecast)
2.6%
Yield (forecast)
8.4 2.6%
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