The Mission Share Discussion Threads

[qs99] 13/5/2022 12:25

May also be that the EBT share purchase has hoovered up any available stock? DYOR

[qs99] 13/5/2022 12:23

Market not great I agree, but couldn't resist topping up. Yield, growth, NAV etc etc.....look forward to trending back to the 70s at least DYOR

[mfhmfh] 29/4/2022 09:45

good read across from SAA?

[currencytrader1] 05/4/2022 14:13

Can't see it in this market, but we live in hope!!

[mfhmfh] 05/4/2022 12:57

70p next stop?

Then onwards to 80p hopefully.

[currencytrader1] 31/3/2022 10:09

All great stuff, thanks for sharing guys.. GLA

[cravencottage] 30/3/2022 16:41

For those that haven't read ST's writeup!

On a mission for a higher rating

Annual revenue increases 17 per cent to £72.5mn
Six-fold rise in pre-tax profit to £7.5mn and earnings per share (EPS) to 6.57p
Dividend per share of 2.4p
Acquisition obligations slashed to £3.3mn
The market perception of UK advertising and marketing specialist The Mission Group (TMG:62p) and the reality of how the group’s network of 17 agencies are trading are not aligned.

The operationally geared group not only quadrupled underlying operating profit to £8mn driven by 16 per cent organic revenue growth, but rebuilt operating margins to 11.1 per cent. Trading recovered strongly in the second half of 2021 as the UK economy roared ahead following the end of Covid-19 related lockdowns.

For instance, the UK housing market boom has boosted activity at property agency ThinkBDW (34 per cent revenue growth). Both Bellway and Redrow are major clients and the sector accounted for around 18 per cent of last year’s revenue, says chief executive James Clifton. Mission’s technology focused agencies (20 per cent of group revenue) performed well during the pandemic, and continue to do so. Exposure to the US certainly helps, as Mission has offices in both San Francisco and Seattle - Amazon Web Services is now a top-five client.

The fact that 47 per cent of the client base has been with the group for five years or more highlights a high degree of satisfaction. Importantly, new clients are being added to the roster including Reckitt Benckiser, Porsche, BMW/Mini, Fuji Xerox and even the Met Office. The collegiate approach adopted by the group continues to deliver results as Mission booked £2mn of cross-referred business in the reporting period, and that excludes deals that were signed off just after the year-end.

Leveraging technology expertise is a strong focus, both in terms of enhancing the group’s data and analytics capability and for supporting client and new business growth, too. The latest offering being the 'Mission Brand Bonding Index', an online platform using comprehensive data and a bespoke algorithm to benchmark global brands. It has become an important tool to showcase the group’s expertise.

Mission’s acquisition of London-based Soul, a customer engagement agency that works with psychologists to help businesses better understand what motivates and drives customer decision making, has enhanced the offering, too. It is proving popular with leading brands Genting, John Lewis Finance, Michael Kors and SSE.

Mission paid £0.7mn of cash consideration for Soul and is modelling for a further £2.3mn earn-out payments that account for 70 per cent of the £3.3mn total acquisition liabilities outstanding. Of that sum only £1.1mn is due over the next two years, so will be easily covered by internal cash flow without the need to tap the group’s £25mn debt facility. At the end of 2021, net debt of £10.3mn equated to 1.2 times cash profit, a comfortable leverage ratio.

Rightly, shareholders are being rewarded. The annual dividend of 2.4p a share is covered 2.7 times by EPS of 6.5p with another rise likely this year. Analyst Roddy Davidson at house broker Shore Capital is pencilling in 9 per cent higher revenue of £79mn to lift pre-tax profit 12 per cent to £8.4mn. On this basis, expect EPS of 7.1p and a conservative looking pay-out of 2.5p.

Moreover, forecast operating free cash flow of £9.4mn could see net borrowings slashed to £5.9mn by the year-end while providing cash to pay dividends and meet earn-out obligations. If all goes to plan – and the 2022 financial year has started well – then Mission’s enterprise valuation of £66mn could fall to £61mn by the year-end. That valuation equates to seven times 2022 operating profit estimates, an anomalous rating in a consolidating sector.

Trading on a 40 per cent discount to net asset value (NAV) of 102.5p, priced on a forward price/earnings (PE) ratio of 8.7 and offering a 4 per cent prospective dividend yield, the 20 per cent share price decline since the interim results is unwarranted (‘Mission on course for strong profit recovery’, 22 September 2021). Buy.

[qs99] 30/3/2022 08:14

so 50%+ upside to NAV per ST? SHould see some more buying interest on that basis IMO over coming days, lets see. Thanks for sharing. DYOR

[qs99] 29/3/2022 21:46

Great thanks 👍👍

[mfhmfh] 29/3/2022 18:03

New tip by ST in IC this evening.

NAV of 102.5p, forward PE ratio of 8.7.

[mfhmfh] 29/3/2022 10:22

next stop 70p hopefully.

ST has a 100p target price but may upgrade this.

I'd expect him to write an update this week.

[qs99] 29/3/2022 09:45

Is this well liked by IC or other tipsters? PLenty of time to get this in to this week's editions if so?

[qs99] 29/3/2022 09:10

c.£11m EBITDA

Market cap £55m

Net Debt coming down

Yield going up

Still some way to go IMO....market likes it DYOR

[dr biotech] 29/3/2022 07:14

I missed out getting back in here. Results and more importantly outlook seem decent enough.

[qs99] 29/3/2022 07:07

1st stop 70p IMO as that was where it was in Dec 21, results show it is worth more IMO, but a re-trace to there IMO would be v. positive. DYOR

[qs99] 29/3/2022 07:06

Not sure we are in a consumer recession yet are we?

Cracking set of results IMO....lovely divi/yield as well....DYOR

[spooky] 28/3/2022 09:15

Decline in marketing spend amid a consumer recession?

[qs99] 28/3/2022 09:05

Any reason this shouldn't be back between 70-80p?

DYOR

[qs99] 17/3/2022 08:11

Price just looks v. odd IMO at less than 70p

At this level if I were management I would be sounding out take private options....let's see, update due in March so not long, but sense if good this will bounce nicely.

DYOR, have taken a position to back my post!
Cheers
QS99

[cliffpeat] 11/3/2022 14:59

Please can the TMG group agencies give their tiny fellow subsidiary a hand?

Pathfindr sells asset intelligence systems - tracking stuff - so in a techie space with a large addressable market. They have some good tech people and small can become big very quickly in their space. (£1.5m t/o in 2020)

There is also a "quite/very interesting" YouTube video channel - but it has only 10 subscribers and individual videos rarely have more than 10 views.

Pathfindr sponsored yesterday's "manufacturing" exhibition in Milton Keynes but the marketing director's presentation at 15:10 attracted only 4 attendees (including me - there checking on my investment:) Dull and unconvincing it was. Again, can TMG group help out here?

[currencytrader1] 15/2/2022 16:16

Been reading up on this one today, and genuinely think it's cheap quality..
Board seems very switched on, and can see an easy 100p over the next year or so as markets recover... GLA

[theoldcodger] 27/1/2022 10:12

Well, the share price has now "drifted" down (rather quicker than I expected) to a level that interests me (see my post 336 of 20/1), so I've taken a small position with the intention of increasing that over time. As I said before, TMG has historically traded at a substantial discount to its peers, however, in my opinion, that discount is now unjustifiably large.

TOC

[devilsprofessor] 27/1/2022 09:26

What on earth is going on with this price?!

[theoldcodger] 20/1/2022 09:20

I've been an investor in TMG in the past and keep a close eye on the company as I'll almost certainly invest again in the future.

Whilst there's no doubt that TMG are cheap in comparison to their peers (in fact on most metrics), they have traded at a substantial discount to them for many years (at least the last 10 since I first invested), so I don't think it likely that this in itself will suddenly result in a rerating, although I don't see any reason why that shouldn't happen at some point. I don't currently feel that there's a compelling reason to buy, however, should the share price drift below 60p, I'd be sorely tempted, as increased earnings going forward, a decent/generous yield and a gradual rerating, could result in the share price really motoring.

Good luck to holders,
TOC

[stemis] 20/1/2022 08:25

It would be interesting to see the peers against which Edison is comparing the valuation.