The Mission Marketing Share Discussion Threads

[mathewawood] 21/6/2013 15:01

PS Investors Chronicle tipped it up in March:

Mission Marketing transformed
Three years ago Mission Marketing Group (TMMG) was a basket case owing millions not only to its bank but to vendors of marketing businesses it bought in an 18-month buying spree in 2006 and 2007. Those acquisitions cost around £50m. New management was appointed in April 2010 and this was followed by a debt reduction programme over three years.

At end-December 2009, borrowings were right up against a limit of £20.3m; three years on and net debt is down to just over £12m and gearing has more than halved. Along the way there has been a rescue placing, but never since the company went public in 2006 has its leverage ratio (ratio of net bank debt to underlying cash profits) been below two times as it is now.

Mission offers a wide range of marketing media and non-financial public relations services from bases outside London. Half of last year's turnover came from advertising agencies and much of the balance from organising media campaigns. And with finances apparently sorted, the company is now talking openly about not only paying a dividend but also "strategic and opportunistic acquisitions to accelerate growth". Broker finnCap forecasts a dividend of 1p a share this year as revenues are anticipated to rise 10 per cent to £129m. On the same basis adjusted profits increase from £4.9m to £5.8m which pushes up adjusted EPS from 4.5p to 5.5p.

THE MISSION MARKETING (TMMG)
ORD PRICE: 35.75p MARKET VALUE: £27.5m
TOUCH: 34.5-37p 12-MONTH HIGH: 41.75p LOW: 20p
DIVIDEND YIELD: nil PE RATIO: 8
NET ASSET VALUE: 81p* NET DEBT: 20%
Year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2008 104 7.25 16.14 0.36
2009 86 -0.87 -5.54 nil
2010 90 1.62 1.67 nil
2011 116 4.11 4.35 nil
2012 117 4.68 4.68 nil
% change +1 +14 +8 -
Aim: Advertising.

*Includes intangible assets of £71.4m, or 93p a share.

IC VIEW:
New management has done well to turn around Mission and the shares, trading on a prospective PE ratio of under seven, deserve a better rating. Buy.
Last IC view: Hold, 12.75p, 20 April 2010

[mathewawood] 21/6/2013 14:59

Good spot oldnotbold. This share at 26p is in deep value territory.
Yes the market which is actually a single analyst (perfectly normal for a v small cap) is saying that the only growth for 2013 will be due to the acquisitions.
I think this is conservative for a cyclical stock at the bottom of the cycle and UK starting to grow. But anyway the main point is that on forcast EPS of 5.5p this stock has a P/E of 4.7 and 3.9for 2015 (Where intrestingly he does see £9m Rev growth). Since a stock on P/E of 8.5 is considered to be a zero growth stock then we can, regardless of whether it grows or not, see that at 26p this is great value.
The debt was once a big issue but the management have controlled it well and at current rates will be completely paid off by end of 2015. As a rule of thumb operating profits/debt should be over 25% (any lower its junk) in TMMG case its 50%.
Iv'e done a lot of due diligence on this stock and couldn't find any problems. All its peers share prices have gone up. I think in TMMG its small and has just gone under the radar. The main reason its drifted down to 26p was cause of a possibly retiring old member of the board started selling his holding from April. After that I think people who follow these things sold too.
There still seems to be someone in the background selling as when I started buying (not a small amount) I was getting a 0.2% spread i.e. 26.5p to sell and 26.55p to buy. This is v unusual for a small cap and can only mean a big seller was in the background and has been for a month now.
Anyway I hope this has helped and let me know if you come across anything.

[oldnotbold] 17/6/2013 17:49

Point 11.4 of the Final Results 2012 states that if balloon dog and addiction had been in the group for the whole year, revenues would have been £128mn. The only market estimate I can find for 2013 is £129mn of revenue. This suggests that the market expects zero underlying growth from TMMG in 2013. This seems unlikely, and therefore there ought to be upside to the sales numbers. I don't know the company well enough to know if they can keep the debt repayment going, and the operating margin stable or improving, but the balance of risks looks like there will be upside to the numbers. Anyone got any industry stats on billings, new business wins, etc? What trade journal would cover the Marketing & Comms industry best? Any insights into this most welcome. Stock looks cheap on the face of it, but would love to delve deeper.

[fugwit] 14/6/2013 12:37

ANyone heading to the AGM on Monday?

[paul_butcher1999] 27/5/2013 22:33

wish I had more cash to get in at this price! Bought a bit last week, but not as much as I\'d like.

[deucetoace] 15/5/2013 15:47

I agree it is too cheap at this price and have been buying. The interest cover is now acceptable and the lack of apparent growth last year was I believe in part due to strong comparitives ie the Census work in 2011. Part of the growth this year due to 2012 acqusitions but to me that makes it more likely that the 5.5p figure will be met.

[glasshalfull] 14/5/2013 17:44

Looks good value down here.

I normally steer clear of highly indebted companies but management team established in 2010 have clearly tackled the issue & debt of £18m-£20m between 2009/10 has been slashed to £12.3m at the end of 2012 and gearing now of only 20%. Clearly the RNS faux pas has impacted to a degree but I also happen to think the mention of H2 weighting for the current year also added a degree of caution. We've had a mixture of Director buying & selling to add into the mix.

Nonetheless, with a market cap of £22m, their EV of £34m seems inexpensive when the company are forecast to achieve PBT of £5.8m this year, EPS to come in at 5.5p & therefore their prospective PER of 5 is v low when earnings growth of 22% are factored in...and debt to be reduced further with reinstatement of a dividend forecast.

They are 30% off since March which seems rather harsh.

To think this company churned out EPS of 16p in 2008...

Regards,
GHF

[jeff h] 25/3/2013 20:58

IC VIEW:

New management has done well to turn around Mission and the shares, trading on a prospective PE ratio of under seven, deserve a better rating. Buy.

[markie7] 25/3/2013 08:58

ooh, it is a day early again. Wonder if we will get them again tomorrow as per the original timetable? Presumably it was a planned release this morning? You can never tell.

[oldnotbold] 22/3/2013 21:07

I don't understand why the share price fell other than idiotic pre-release of information. For a company trading on a PE of less than 10x, this seems a respectable set of results. Turnover dull because of 2011 census, but 14% OP improvement. Assuming annualizing of acquisitions, OP margins held, and further debt pay down, a further 10% eps increase seems easy. Thus 4.54p x 10% = 5p. Current share price close 36p. 7.2x PE for 2013, with a dividend all but promised at the interims. I'm new to the stock so am probably missing something important, but on the evidence of cash generation and valuation and steady expansion, this seems attractive.

[ivor hunch] 22/3/2013 18:48

I have great respect for David Morgan - he's had an outstanding career in advertising. The question now is twofold :
1. Will he try to arrange a take over or buy out which would enable him to get out with plenty of cash, having turned TMMG round, reduced debt and restored profitability? What would the take-out price be - 40-50p?
2. Have we seen the best of the share price rise ? I bought in at 10p and have top sliced twice, but was staying put in the hope of a takeover. Today's fiasco and less than exciting results tempt me to sell the rest of my holding.
Not quite sure what to do.
Ivor

[lord gnome] 22/3/2013 16:16

Hilarious. Would you employ this lot to handle your communications? Not on this evidence.

[rp19] 22/3/2013 16:03

Yes, not a great fan of some of the language used. I think they are making progress, net debt down etc. I'm not a holder but much more of a drop and I might be.

[ivor hunch] 22/3/2013 15:00

Quite - but what's worse is that the figures aren't that brilliant. The much vaunted dividend postponed and turnover static. Smacks of over-confidence in my view. I'd happily sacrifice the 'original' chairman's statement (which in the past has required a dictionary to understand) for some more sparkling figures and the long-promised dividend.
Ivor

[rp19] 22/3/2013 14:31

Bit of a blooper!

[qs9] 22/3/2013 10:06

blimey....

[markie7] 22/3/2013 08:41

er, the full year results appear to be attached to that announcement of results date.....someone is for the high jump

[ivor hunch] 08/3/2013 11:10

Agreed. It is still too cheap, but the recent rise is remarkable especially as it hung around the 28-32p mark for some 9 months.

[josephrobert] 08/3/2013 11:05

Or just simply too cheap with a low P/E, low PEG in a marketing industry upswing?

[ivor hunch] 08/3/2013 08:40

Is the rise from 34p to 42p this month alone the result of articles in Shares Magazine and the resumption of dividends (which was actually announced nearly a year ago) ? Or is it because there is a potential take over or management buy out in the offing? As I have posted before, I believe David Morgan intends to retire at some point and cash in his profits - is that what's behind this steep rise?
Ivor

[josephrobert] 07/3/2013 20:11

From the 31st January, doesn't add much imo

7th March link

[jeff h] 07/3/2013 17:38

Tipped again today in Shares mag.

[mechanical trader] 05/3/2013 16:14

Way undervalued. Best chart for
oscilators I can find at moment.

Beeen searching for 4 days aswel.

Pity spreadbetters dont do it.