The Mission Marketing Share Discussion Threads

[arthur_lame_stocks] 19/4/2018 21:43

I see Polar Capital have cropped up with a 5% stake. As far as I can see they run a UK value fund so I would guess it's gone into there. I couldn't find out much about what they're about though.

Anyone know?

[dr biotech] 12/4/2018 23:12

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..

[wanttowin] 12/4/2018 15:19

Another brilliant post GHF, thank you and keep up the good work !

[glasshalfull] 12/4/2018 12:19

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

[dr biotech] 11/4/2018 20:20

Can’t be worse than the wallbrock tosh, that looks at profits as a % of turnover, when most turnover is actually just pass through costs. D’oh

[arthur_lame_stocks] 11/4/2018 20:15

I read that investers champion report and frankly I don't see what his problem is. For a start he complains about them publishing operating profit yet this is what 90% of listed companies do. It's one of my favourite measures, as you get an idea what the business might be worth to an acquirer who could cut out a lot of duplicate costs etc.

I wouldn't take too much notice of it personally.

[dr biotech] 11/4/2018 09:21

Back to the trading range again. Sooo frustrating

[aishah] 11/4/2018 08:21

Investor's Champion:
Mission Marketing offers another horror show of adjustments!

The marketing communications and advertising group, announced annual results containing a host of adjustments and plenty of colourful language.

[gilotron] 10/4/2018 20:22

The Mission Marketing Group+ (TMMG, 46p, Issuer Sponsored)

Full year results and acquisition.

The Mission Marketing Group (the Mission) has published a strong set of results for the year to end December 2017. Headline revenue, Op. profit, adj. PBT and adj. EPS advanced by 6%, 9% (margin 11.7% from 11.5% reflecting a tight focus on costs), 10% and 11% YoY to £70m (SCF £69m), £8.2m (SCF £8.2m), £7.7m (SCF £7.7m) and 7.1p (SCF 7.0p) respectively. Period end net bank debt stood at £7.3m (vs. £11.3m at end FY16A) despite £2.9m of net acquisition spend. This significant reduction was primarily driven by an extremely strong working capital performance (£3.3m inflow), resulted in a modest year end net debt / EBITDA ratio of 0.8x (vs.1.3x 12 months earlier) and trigged a reduction in borrowing costs. The full year dividend has been increased by an eye-catching 13% to 1.7p (SCF 1.7p).

Significant developments during the year included: (a) the launch of the Group's Fuse technology hub (which we regard as a clear illustration of its commitment to commercialising IP and driving innovation); (b) a move into profitability for its Mongoose Sports and April Six Asia start-up ventures, (c) several blue chip business wins including (Mars, Neff, TNT and Lenovo), the appointment of a Commercial Director (who is helping to drive on-going initiatives to unlock efficiencies and drive further margin improvement), and; (e) the acquisition of RJW & Partners (specialist consultancy serving the pharma and medical devices industries) which has performed strongly since joining the group in April 2017.

Current trading / outlook comments indicate that trading during Q1 FY2018F was ahead YoY and flag the expectation of a year of “strong growth” (despite a backdrop of economic uncertainty) accompanied by further margin improvement.

Today’s results are accompanied by the announcement that TMMG has acquired the award-winning London-based creative agency Krow Communications (Krow). This deal will provide the group with a major London presence to compliment its regional network and existing operations in the capital, is expected to provide “significant cross-selling opportunities” in both directions, and is expected by the company to be earning’s enhancing “with immediate effect”. Initial acquisition consideration is £2.75m (funded by existing resources) with a further payment made in 2019 (of which up to £0.5m will be paid in shares) taking this total to the equivalent of 3.0x Krow’s 2018 adj. EBIT. Thereafter deferred consideration is payable contingent on financial performance in 2019 and 2020 (of which not less than 5% will be paid in equity). The maximum total consideration (initial plus deferred) on this deal is capped at £14.5m which would require compound EBIT growth of 25% in the three years to end December 2020 (creating cumulative EBIT of £4.9m / a 3x multiple). The cash element is expected to be mostly funded from future cash flows of the enlarged group. Krow employs 65 staff (all of whom are staying with the business) and enjoys a diverse client base including Fiat, DFS, Ferrero and Wilko. It reported revenues of £7.2m and underlying PBT of £1.0m in the year to end December 2017.

We are pleased to note the top line growth, margin progression, positive trading momentum and upbeat outlook comments within this morning’s release. The latter are particularly encouraging given recent concerns around the ROI performance and efficacy of digital advertising and the competitive pressures impacting large agency holding companies. Importantly, we believe they also lend credence to our view that an increasingly complex media landscape represents an opportunity (rather than a threat) for innovative, well-resourced, and agile marketing / communication agencies to add value and to outperform. We believe TMMG is well placed to thrive in this environment thanks to: (a) the depth of skills and resources across its agency network; (b) its impressive roster of long-standing blue-chip clients (c.20% of revenue during FY17A came from client relationships of 20 years or more); (c) its culture of shared purpose, collaboration, innovation and client service; (d) its reputation for innovative and effective creative work, and; (e) its deep digital expertise. The acquisition of Krow should add to these strengths and in our view looks a strategically sensible deal.

We expect to upgrade our underlying adj. PBT forecasts by c.2% in response to these results (FY18F adj. EPS c. 8p) and note that the earnings enhancing nature of the Krow acquisition is likely to add further upside (we will revert with new forecasts shortly). On and underlying basis (pre – Krow) we expect a strong EPS and DPS progression (2 year aggregate growth of c.25% and c.18% respectively) accompanied by positive cash flow. On this basis we regard the group’s current stock valuation (5.9x / 3.9% and 5.2x / 4.3% FY18F and FY19F PE / DY ratios pre upgrades respectively) as extremely modest relative to comparable companies, the broader Media sector and the equity market as a whole. Specifically, we note that our watch list of 30 UK listed Media companies is trading on FY1 PE and DY multiples of 13.5x and 3.5%, but is forecast to generate lower aggregate EPS and DPS growth than the Mission over a two year view (15% and 16% respectively). Issuer Sponsored.

[walbrock82] 10/4/2018 17:14

Marketing companies are always the first to feel the pain and the last to recover. Mission marketing is no different. Operating profit is around £7m (read the article below to find out why) and margins are improving, but it is still below the 6% average over the ten-year period, also it managed to reduce its debts by £40m in the same time frame. At 8.5 times multiple, it could represent a rejuvenation of growth or a high valuation, given the ten-year average is 6 times multiple. Finally, it states that organic growth is strong, but contradict itself by acquiring businesses.

For more analysis on Mission Market, along with the Card Factory and Belvoir Lettings.

[qs99] 10/4/2018 12:09

Always makes me wonder though if they are so proud of the cost savings why the costs were there in the first place! deal integration stuff I get otherwise means they previously over spent! Anyway, IMO this should be trading much higher, look at recovery in HNT and it still has big old debt levels compared to this....DYOR....

[jeff h] 10/4/2018 10:43

Not a lollapalooza but £1 million back office cost savings sounds more than useful:-

[bbluesky] 10/4/2018 10:02

"not to be gongoozelers" "and with a minimum of bafflegab" all good stuff! Mr Morgan could be formidable at Scrabble....And what about the yield!! Happy to be patient, lots of upside to come imo.

[dr biotech] 10/4/2018 09:59

I’d like to see them clear the debt completely, or get it down to less than 0.5 earnings and lay the ghosts of the past to rest.

[cliffpeat] 10/4/2018 09:48

A muted response from the market after an early share price rise.

83m shares in issue and 82k or so traded in first hour and a half and largest buy £7.5k

Evidently this is not on the radar of the institutions and funds.

With the integration of the skills of the acquired agencies and investment in tools used across the board it seems to me that the "goodwill" is increasingly secure - compared to the "old days" when the talent could walk out the door with clients and set up in the next street.

Keeping my small holding for the time being.

DYOR

[qs99] 10/4/2018 09:23

Just depends whether they can drum up any support on back of this. Reducing debt provides more room IMO for more acquisitions, hires of teams or start-ups so should be a virtuous circle if management can control it and macro picture holds up. DYOR and GLA

[royaloak] 10/4/2018 09:14

Thanks Glasshalfull and others, I was tempted to sell on drifting share price but analysis posted here kept me in, good stuff!

[mfhmfh] 10/4/2018 08:41

'Trading in the first quarter of 2018 was ahead of last year and current indications are that prospects for organic growth are good...All in all, we expect 2018 to be a year of strong growth'.

[qs99] 10/4/2018 07:30

£37m market cap +£7m net debt, vs headline EBITDA of £10m and increasing dividend. Upbeat trading statement bodes well IMO/DYOR....EV/EBITDA ratio of 4.4 and hopefully falling should make it attractive at sub 55p IMO....DYOR

[dr biotech] 10/4/2018 07:18

Decent set of results, plus an upbeat statement on current trading. I make the the PE ratio to be about 7 including debt. Would be great to break out if the 40-45p range, perhaps this will be the time, though we have been here before.

[mfhmfh] 09/4/2018 17:13

let's see what tomorrow brings. share price should be in the 60-65p range IMHO.

[dr biotech] 05/4/2018 15:40

Would be nice to break out of the 40-45p band which it seems to have been stuck in forever. Perhaps the results next week can finally give us some momentum.

Nice write up GHF.

[jeff h] 05/4/2018 15:29

I was rather sceptical about how Mongoose would do but the below sounds encouraging:-

".. With February likely to be remembered for the infamous ‘Beast from the East’, the Mongoose team has been cooking up a storm of its own and will be announcing no less than five new business wins this month. Vamos! We look forward to sharing them with you very shortly – so stay tuned.

In line with our growing client base, the Mongoose team has also expanded,...."