The Mission Marketing Investors - TMMG

The Mission Marketing Investors - TMMG

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Stock Name Stock Symbol Market Stock Type
The Mission Marketing Group Plc TMMG London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 78.50 01:00:00
Open Price Low Price High Price Close Price Previous Close
78.50
more quote information »

Top Investor Posts

DateSubject
16/4/2019
09:00
ali47fish: what is pathfinder nimbo please i am a new investor here!
30/11/2018
07:54
interceptor2: I am impressed by your vocabulary cfro, wonder where you find these wonderful phrases. :0) High volume day yesterday in fact the highest for 31 days which qualifies as a continuation pocket pivot, some investors look for these to add to holdings.
13/11/2018
19:10
montyhedge: Looking good another tip from Investors Chronicle this week, would be nice.
11/10/2018
11:14
johnnyoz777: I hold and this has just been tipped by Simon Thompson in his exclusive Alpha subscription on Investors Chronicle with a great, and very detailed write up. Hope this helps.
19/9/2018
09:56
davebowler: hTTp://www.themission.co.uk/investors/results-centre
12/4/2018
23:12
dr biotech: Seems to me investors champion is no more than a couple of peoples opinion (perhaps only 1) - their analysis is as valid as anyones, but as always take it with a pinch of salt. I gave up on brokers/tip sheets ages ago. When you look at it they are just a couple of people who work at a company, nothing more. Sometimes they may have some more detailed information, but I doubt many are better than well informed posters on here. Which are admittedly few and far between on some threads. Lets hope its onwards and upwards. I've been here long enough..
12/4/2018
12:19
glasshalfull: Morning everyone, Currently on holiday but checked in & surprised share price slipped back(43.6p v 45p). I welcome any comment or update that helps me to evaluate any of my investment decisions. While the Investor Champion article makes some valid points on the reporting of “exceptionals” I feel that overall the article conjures the image of one which can't see the wood for the trees. We are not talking about a company on some heady rating but rather a company on a prospective PER 5.7 which has been demonstrating a picture of improving earnings, profitability, cash flow & margins for 7 years now with a dividend yield of c.4%...not to mention indication on a positive start to 2018 with outlook of continuing growth for an 8th consecutive year. TMMG reminds me of IGR & EMR both of which were on derisory ratings circa.2015 due to market perception of them being heavily indebted. Once net debt & growth better aligned, they both re-rated considerably by 100%+ Shore upgraded PBT following results & indicated that a further upgrade to figures would follow on the back of their earnings enhancing acquisition. So while I agree on some aspects on the reporting of headline figures, I believe that the positives far outweigh the sentiment expressed (see my recent synopsis on the company) and remain a buyer. Kind regards, GHF
03/4/2018
16:25
glasshalfull: TMMG 8 Reasons why I think TMMG could re-rate? (1) Increasing Earnings Will announce next week (on 10.04.2018) their 7th consecutive year of positive growth. (2) Growing Dividend Yield Now 4% and forecast to rise to 5% in respect of 2019 forecasts. (3) Strong Cash Generation FCF Yield of 17.6% in 2018 & 19.5% in 2019. (4) Low PEG & PER PER 5.8 based on 2017 estimates & prospective PER of 5.2 in 2018 despite c.10% growth. PEG 0.5 falling to 0.4. (5) Increasing Margins Appointment of a Commercial Director to grow EBIT margin from 11.5% in 2016 to 14% in 2020. (6) Commercialisation of iP Several of the agencies have developed software for existing clients. This has now been harnessed under the development of their Fuse technology hub. They now have a number of products which can be rolled out to their extended client estate or utilised to attract new clients. The developed products include integrated navigation & tracking (Rolls Royce Aerospace); patient management software (NHS) and an Agency management system. So this adds value to their current proposition but also provides the possibility of a future divestiture or monetisation of the iP. (7) Strong Client Retention 60% of revenue from clients of 5 years or more; 40% from clients of 10 years or more & 20% from clients of 20 years standing. (8) International Diversification The company has emerged from that of a predominant UK marketing services company to one that has begun expanding into SE Asia & the US through establishment of brands & through acquisition. They have also moved into other industries in recent years which will mitigate any weakness in any particular group agency or market sector. Background In early January 2018 I mentioned that I’d been a buyer of The Mission Marketing (TMMG), a marketing communications & advertising company that comprises 14 principal agency brands including the highly acclaimed & top 20 UK agency Bray Leino In a nutshell TMMG came unstuck in 2009/10 after running into difficulties & running up significant debt suffered in the wake of the 2008 financial crisis. The FY09 results highlighted that net debt had ballooned to £20m & David Morgan was parachuted in as Exec Chairman in 2010 as the debt was restructured & plans made to salvage the business. https://www.investegate.co.uk/mission-marketing--tmmg-/rns/board-changes/201004150700172269K/ Since 2014 the shares have been rangebound between 35p-50p with few exceptions. They are currently 40.5p mid-price having yet again failed to break the 50p ceiling at the end of January 2018 following a positive trading statement on 25.01.2018 (more of that later). The Mission have been on a single digit PER for as long as I care to remember. When I flagged the investment case early Jan 2018 I anticipated that the company would produce a strong finish to 2017. Well, that proved to be the case but with the shares moribund its certainly hard to believe that they confirmed another year of c.10% growth & fantastic cash generation. I still feel that there is a disconnect between the valuation of the company and share price currently attributed. Even more so now, as they’ve slipped back 15% since the Jan 2018 trading update. The company moved from finnCap to Shore Capital in 2017 as I understand they were equally perplexed by the valuation of the company. Can Shore do any better? Well, Shore currently have a 109p fair value price for The Mission based on their blended DCF (discounted cash flow) with comparison to EPS & DPS growth...169% higher than the current share price! It remains to be seen if they can help change the poor investor sentiment surrounding the company. Financials Market Cap £33.8m Net Debt £7.5m (per Jan 2018 t/s) Enterprise Value £41.3m Shares in Issue 84m Share Price 40p vs 41p TMMG have delivered consistent earnings growth since they nearly went under in 2010, with the exception of 2013 which produced a small 3% increase in PBT but delivered static earnings due to restructure in the business. The company also introduced a progressive dividend policy in 2013. Earnings Record - year end Dec 2010A EPS 3.5p 2011A EPS 4.2p (+22% EPS growth) 2012A EPS 4.5p (+7% EPS growth) 2013A EPS 4.5p (nil growth) / Div 1p 2014A EPS 5.1p (+15% EPS growth) / Div 1.1p 2015A EPS 5.9p (+15% EPS growth) / Div 1.2p 2016A EPS 6.4p (+9% EPS growth) / Div 1.5p Forecasts 2017E EPS 7p (+11% EPS growth) / est. Div 1.7p (yield 4%) 2018E EPS 7.8p (+12% EPS growth) / est. Div 1.8p (yield 4.2%) 2019E EPS 8.8p (+13% EPS growth) / est. Div 2.0p (yield 4.7%) The undernoted presentation link below highlights (on p6) the fact that Aviva, BP & Bellway have been clients for over 20 years. Indeed, 60% of revenues are generated via clients of 5 years or more; 40% from clients of 10 years or more & 60% from clients of 20 years or more. Simply put, the collective 14 agencies that comprise The Mission are clearly delivering given the longevity of their client base. HTTP://www.themission.co.uk/media/1196/mission_interim_powerpoint_2017_v1.pdf Investment Case TMMG have flown under most investors radars despite forecasts of double digit CAGR during the next 3 years & sit on a PER of 5.8 based on expectations of 7p EPS in 2017 & prospective PER of 5.2 for the current year. Their progressive dividend is also forecast to have risen to 1.7p for 2017, providing a dividend yield of 4.2%. 2018 finds the company with a forecast dividend yield of 4.4% & 2019 it may rise to 4.9% according to forecasts. Net debt was always the achilles heel of the company IMHO. Despite the perception that The Mission is heavily indebted (note: - they WERE heavily indebted previously) they have reduced net debt from £20.1m in 2010 to £7.5m at the end of 2018 despite having made a number of bolt-on acquisitions and investing in the establishment of a few agencies. It’s worth highlighting that consensus broker forecasts were for TMMG to end 2017 with £11.3m net debt & the trading statement of 25.01.2018 indicated that cash generation had been exceptional knocking net debt down to £7.5m which triggered a 0.5% reduction on their interest rates. https://www.investegate.co.uk/mission-marketing--tmmg-/rns/trading-statement/201801250700038502C/ “2017 was an exceptional year for working capital reductions and the year ended with a net bank debt position below £7.5m, materially better than market expectations. The ratio of net bank debt to EBITDA has accordingly reduced below x1.0, thereby triggering a 0.5% reduction in interest rates on the Group's debt facilities from this month. As I mentioned 3 months ago, free cashflow (FCF) & margins are also expected to improve during the next few years. With the investment made in recent years its is forecast to substantially improve in 2018 & 2019 to FCF yield of 17.6% & 19.5% respectively. EBIT margins are also forecast to increase from 11.5% in 2016 to 11.9% in 2017, with the company stating their ambition to increasing this to 14% by March 2020 in the January t/s. It should be noted that the company have a large H2 weighting - as anyone who has reviewed their interim statements will have observed over the years. This may be one reason for the low rating, as we all know that statement implying a H2 weighting may be perceived as a pending profit warning for may companies, but The Mission enjoy a (37% / 63%) H1 / H2 split & have delivered consistently each H2 year in year out as evidenced by their 7 year growth record. Conclusion In January I summarised by saying the share price has gone nowhere for the last 3 years, while earnings have returned low double digit growth. So this is simply deja vu. I believe that if TMMG continue to deliver as per forecast, then it would not surprise me to see them break out from 35p-50p range at some point...how long that takes is anyone’s guess? Suppose that’s like saying this could go up, down or stay the same! Seriously, I don’t subscribe to the 109p fair price mooted by Shore Capital but believe the shares could double from here & have a current target price of 80p based on the shares attaining a PEG 1 and PER 10, not forgetting that the current price locks in a prospective dividend of 5% based on forecasts to 2019. I would go so far as to say that if the market continues to ignore the company then I think they’ll be a sitting duck to a larger player in the space. Their EV is only £41m and PBT is forecast to rise to £8.5m this year and £9.6m next. Stock - o - pedia agree, with TMMG on a Stock Rank rating of 90 & Magic Formula score A+ Disclosure I’ve been buying since January so please consider my musings as one who is wearing rose-tinted spectacles. Kind regards, GHF
26/1/2018
11:53
mfhmfh: Trading in 2017 is in line with market expectations. Revenues up 6% (4% organic) - sounds pretty good, in a year where there's been a lot of macro uncertainty (often marketing budgets are the first thing that companies cut). Headline PBT up 10% to £7.7m Net debt £7.5m, materially better than forecast. Lower net debt has triggered a reduction of 0.5% in the bank's interest rate. Trying to improve margins further - target is 14% by March 2020 (headline operating profit margin). That all sounds rather encouraging to me. Valuation - this looks cheap, even after allowing for the net debt, and some deferred consideration creditors. Note that the "Price to Tang.(ible) Book (value) above says "n/a". That means that P/TBV is negative. So that's a quick check to flag up that you need to check out the balance sheet. I don't like it - the group has a weak balance sheet, stuffed full of intangibles. There again, that's reflected in a very low PER. Stockopedia likes it! This is a very high StockRank; My opinion - obviously I like it, as I hold some. However, the only reason I still hold it is because my broker tried to sell them a while back (I wanted the money for something else), but there were no buyers. So beware that this share is extremely illiquid, and once you've bought, it can be almost impossible to sell. Or you would have to take a haircut anyway. Mind you, that lack of liquidity works nicely on the upside when good news comes out. I see that earlier today the market spread was 46p bid, 48p offer, and someone had to pay 1p premium price, at 49p, to get hold of just 6,000 shares! That said, I've just noticed that there were loads of trades today, totalling 650k shares. That's very, very unusual, as normally hardly anything trades in this share. So maybe I could have sold today, as there was plenty of demand. Of course, now the company has put out a decent trading update, I don't want to sell any more. Conclusion - it's cheap, but very illiquid normally, so tricky to get in & out of. Therefore, it's more a share for longer-term investors than traders.
10/1/2018
08:57
glasshalfull: TMMG Like many investors I’ve reviewed my holdings & watchlist during the last fortnight. I topped up and added substantially in relation to a few (such as CROS, OPM & PTY) which appeared undervalued - IMHO - in relation to prospects. Another on my list was an old favourite, The Mission Marketing (TMMG), a marketing communications & advertising company. This company has been in & out of my portfolio during the last few years. Last invested here in early 2016. TMMG’s profitability had recovered during recent years after running into difficulties & ramp up of debt suffered in the wake of the 2008/09 financial crisis. The FY09 results highlighted that net debt had ballooned to £20m & David Morgan was parachuted in as CEO as debt was restructured. Since 2014 the shares have been rangebound between 35p-50p with few exceptions. They are currently 43p mid-price having yet again failed to break the 50p ceiling. They have been on a high single digit PER for as long as I can remember. I feel that this may be about to change. “Why now?”... I here you ask. Well, the market have given this company a wide berth over the last few years. However - you knew there was to be a further however - their performance over the last 7 years belies this weak share price IMHO. They have delivered consistent earnings growth over the period, with exception of 2013 (nil growth) while introducing a progressive dividend policy in 2013. Earnings Record - year end Dec 2010A EPS 3.5p 2011A EPS 4.2p (+22% EPS growth) 2012A EPS 4.5p (+7% EPS growth) 2013A EPS 4.5p (nil growth) / Div 1p 2014A EPS 5.1p (+15% EPS growth) / Div 1.1p 2015A EPS 5.9p (+15% EPS growth) / Div 1.2p 2016A EPS 6.4p (+9% EPS growth) / Div 1.5p Forecasts 2017E EPS 7p (+11% EPS growth) / est. Div 1.7p (yield 4%) 2018E EPS 7.8p (+12% EPS growth) / est. Div 1.8p (yield 4.2%) 2019E EPS 8.8p (+13% EPS growth) / est. Div 2.0p (yield 4.7%) A credible record due in part to the long term relationships they have established with an exceptional blue chip client base. Presentation link below highlights (on p6) the fact that Aviva, BP & Bellway have been clients for over 20 years! Recent client wins, per their interim statement, include Mars, Neff, Reckitt Benckiser, Revlon, The Royal Mint and Universal Studios. As mentioned this strong client retention means they have better revenue visibility than many peers with 57% of their revenues delivered from clients of 5 years standing or more. The company have also grown to encompass 14 agencies across the globe. TMMG have quietly flown under the radar despite forecasts of double digit CAGR during the next 3 years. They also introduced a dividend in 2013, and as observed, the yield is forecast to have crept up to 4% for 2017. Meanwhile, net debt has reduced from £20m in 2018 to £11m today. Should be noted that once net debt reduced to c.£10m they undertook a few small bolt on acquisitions over the last couple of years. Importantly, free cashflow & margins are also expected to improve during the next few years. In 2016 FCF was £4.5m for a yield of 13.3% and in 2017 forecast to be £4.2m for yield of 12.3%. With investment made in recent years its is forecast to substantially improve in 2018 & 2019 to 17.6% & 19.5% respectively. PBT margins are also forecast to increase from 10.7% in 2016 to 12.6% in 2019. It should be noted that the company have a large H2 weighting - as anyone who reviews their interim statements will have observed over the years. This may be one reason for the low rating, as we all know that statement implying a H2 weighting may be perceived as a pending profit warning in many cases. Interim presentation here HTTP://www.themission.co.uk/media/1196/mission_interim_powerpoint_2017_v1.pdf So, in summary, the share price has gone nowhere for the last 3 years, while earnings have returned low double digit growth. I believe that if TMMG continue to deliver as per forecast, then it would not surprise me to see them break out from 35p-50p range before too long. Is it speculative to consider that they could double from the current share price price (43p) over the course of the next 18/24 months???... and while one is waiting there is a 4% dividend yield on offer that rises to 4.7% by 2019. Even if the share price doubled, on 7.8p forecast earnings in 2018 & 8.8p EPS in 2019, they would only be on a PER 10 - 11, which is hardly a racy multiple. Stock - o - pedia appear to agree, with TMMG on a Stock Rank rating of 91 & Magic Formula score A+ Disclosure I’ve been buying over recent sessions so as always, please consider my musings with a large pinch of salt and DYOR. This is not a full write-up but simply a short synopsis. Kind regards, GHF
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