BrainJuicer: facing up to new technology BrainJuicer is a technical market research agency that joined AIM in December 2006. The company is a notable success. BrainJuicer is one of just 62 AIM shares that have been increasing shareholder dividends for the last five years. After paying a total of 1.5p per share for 2008, BrainJuicer went on to increase its dividend every following year, paying shareholders 4.3p for 2014. Even better, BrainJuicer has paid a collection of large special dividends. A special dividend of 1.7p was paid in October 2008. This was eclipsed by a 12p special dividend in October 2013, followed by another 12p special dividend in May 2014.
observer is studied to evaluate the emotions provoked In the last five years at BrainJuicer, revenues have increased from £11.8m to £24.6m. In that time, net profit has grown from £1.2m to £2.9m. Better still, this growth has been delivered organically, and the company has enjoyed a net cash position throughout this time.
So what does BrainJuicer do? The company’s quirky animated website describes its business as “accelerating profitable brand growth”. One example of BrainJuicer’s work is described by the company as Predictive Markets. This is a concept testing methodology that taps into 6
the most frequently used decision making process – the intuitive method (a gut reaction) rather than the more laborious calculating method (considered judgement). BrainJuicer’s analysis then delivers a numerical appraisal of the concept/product.
enjoyed a net cash position throughout Another product that BrainJuicer sells to clients is ComMotion. Here, BrainJuicer measures the emotional response to an advertisement, rather than attempt to measure its effectiveness at persuasion or brand linkage. This is achieved through what it calls a ‘face trace’ technique, where the reaction of the observer is studied to evaluate the emotions provoked by the campaign.
qualitative brand strategy service to a more scalable and predictive quantitative service.” Encouragingly, BrainJuicer H1 results showed 7% revenue growth from the core quantitative services. While the quantitative services are typically lower priced, they are also more scalable, giving the possibility of enhanced margins. BrainJuicer is actively seeking out acquisition opportunities and has relocated its London office to a much larger site. The current share price rating demonstrates the market’s confidence in BrainJuicer’s ability to get back to earnings growth. While the decline in qualitative work is affecting profits, there are clear signs that the predictive offering has momentum. BrainJuicer Group (LON:BJU)
possibility of enhanced margins
FOR Strong balance sheet
Despite the track record of success, BrainJuicer shares trade close to their lowest price since the beginning of 2014. Interim results, announced in September, showed a 4% decline in revenues and a 25% drop in earnings per share. Management is currently pursuing a shift “from a predominantly
New products started well AGAINST New products unproven Strong growth absent Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high
£45m 351p:360p 15.0 1.3% 343p:435p
Published on Dec 2, 2015