well....there we go there were indeed exceptional items and also given the new issues of shares this has diluted an already weaker EPS than last year.
not a massive drop at all, 42p at the time of writing. however with EPS of 3.11 this gives a p/e of 13 and all of a sudden i start to lose interest.
also the big claim about debt reduction isn't as great as i imagined. short term debt has indeed been reduced but long term debt has increased. overall though there has been some debt decrease which is good. short term assets have decreased as much as short term debt has decreased so the current ratio has not changed, staying at 1. long term assets have increased by 2 mil but 1 mil of this is goodwill, so nothing for me to get excited about.
i sold my shares this morning at 43.5p but will continue to follow the sp. i think at a p/e of 9 i will buy back in, this will mean a sp of 28p...so not holding my breath just yet....
TMMG expect to be inline with market expectations - but what are they exactly ? morningstar has an expected EPS of 4.70, slightly ahead of last years 4.33...if this is met tomorrow then i imagine the sp will rise to around 50p but nothing more, its not exactly a massive rise and i'm not sure full confidence is restored yet for the sp to go any higher...
slightly nervous that there may be some sneaky 'exceptional items' but that's just me being paranoid.
also i will be looking at the debt situation which apparently has been reduced.
I find it amazing that these IC folk do not have the capability to spot this one from many miles off. It has been obviously under valued and completely overlooked for some time, and anyone with an ounce of ability could have bought in at a low 20s price, and be looking at 100% on this already. My mistake was initially buying at low 30s after last years decline, when I mistakenly believed that it couldn't drop lower. However, topping up in the low 20s will now bear its fruit. Thank you IC.
The Bank of England expects the UK economy to grow at a remarkable 3.4 per cent in 2014, up from 1.9 per cent in 2013, suggesting the UK recovery has finally found its feet. This is excellent news for the cyclical advertising market, which should soon move back to growth mode after several years of contraction. Surprisingly, this has yet to be properly factored into the share prices of marketing companies listed on Aim, which have been largely left behind in the recent stock market rally. None look cheaper than Mission Marketing (TMMG), a full-service advertising and PR agency with 18 offices mainly outside of London, whose shares trade on just six times forecast earnings for 2014 against a peer group average in the low double-digits.
It continues but that is all you get in the teaser ... Its in their share tip section.
in previous post I felt confidence had been shaken in the company so it will take a couple of years for that to truly recover and get the business on an average rating.
that said there seems to be an air of understatement in the results
they do talk frankly about their problems which is very refreshing
and they do talk confidently about issues having been resolved
debt has reduced AGAIN so confirmation that the business is producing CASH and growing
and they are returning to the divi list with initial yield maybe 3% (say 0.75 total)
so there are positive signs but I think will be a time before market -regains trust
they expect H2 to be the same as LY so that gives ebitda of 6m+ for the year
and debt maybe 10m
so they have produced for a few years free POST TAX cash flow of c.2.5m
so even on a POST TAX return of 10% p.a. that implies 25m = c.30p
taking a more reasonable 8% p.a. POST TAX return = 37.5p
that equates to about 6.5t EBITDA which is low
and a P/E ratio of 6t
so no surprise that the price has recovered from the lows of 23p
on large volume and director buys
for me I think reasonable value is c.37.5p
but can see a more positive scenario that they do a good acquisition
and market then sees the new mgt growth record albeit with a hiccup
well well Mr Boyd has a very good track record of making money while shareholders don't!!!
given price weakness was not surprised to see negative parts of the RNS today.
I don't like the attempt at positive spin - I wonder who is responsible for the bad acquisition?
also the loss of Aviva and B&Q seems incompetent.
so confidence definitely shaken
and for a market driven by low risk I can see why investors wary.
that said as TT points out they are confident of huge H2 profits
and more importantly a great CASH flow and debt reduction to 1.5t ebitda
so it does seem undervalued.
in many ways we can think that this small company has suffered a knock
and an overall very successful road but that makes it a PE type investment for several years time horizon rather than one that investors will get overly excited by IMHO.
that they are paying a dividend will attract some interest - it was rumoured before at 1p
so I think fair value is c.30p which would be a P/E of 5 times.
very low agreed but they will need to rebuild market confidence.
I remember feeling stupid taking profits on the way up at 36p and then some more at 40p
but glad of that now though wish I'd been less greedy riding the rising price.
at 23p def. to cheap to sell and confident they will beat CASH and prob market over 2 years
but wouldn't recommend any immediate purchase until market settles.
We anticipate significant growth in the second half of the year and expect adjusted profit before tax for the year to be around £5m.
We have continued to maintain a strong approach to working capital management and we expect to report a further reduction in net debt from £12.3m at 31 December 2012 to approximately £9m at 30 June, and a reduction in the Group's leverage ratio (ratio of net debt to EBITDA) to below x1.5 at 30 June. Looking forward, the trends of reducing net debt, increasing headroom on our banking facilities and reducing leverage ratio are expected to continue and consequently it remains our intention to re-instate a dividend at the time of our Interim Results.
So with 2012 Profit before tax coming in @ circa £4.7M, then the expectation is for some growth, albeit less than previously expected. Together with a reduction in debt, and the expected re-instatement of the dividend, I see this report as slightly disappointing, but somewhat better than the market response. Or am I missing something here? Unless someone else can help me with this, I see this now as a strong buy, at these prices i.e. 22.75p
Yes, agreed 30-50-20. I actually bought some more today, and perhaps I have bought too soon? I am surprised at the drop here, and actually still saw them as good value at 40p, although quite clearly the market did not. Unless there is something that we are not being told, then this has to be a bargain again at these prices.
well surprised to see the continued price fall
and seem to be an amont of stock available.
always have faith in the market and insiders to pikc bargins
so a little surprised there have not been obvious buyers at these levels.
Stephen Boyd tends to do well for himself rather than his shareholders
so maybe his trades are an insider pointer based on some contract loss yet to be announced ???
so a little more nervous than last week
but do take comfort from the fact that the multi-year chart pattern is still very much intact
continuing to hold but have stopped topping up until base re-affirmed.
well sales of 210k shares is significant for TMMG
esp. given the 3 year record of regular director purchases.
Stepehen Boyd is chairman of 3 other PLC companies and owns several private companies.
As chairman of the 3 PLC companies their share price performance is .....
PTD (pittards) - down 95% over 10 years
PUR (purewafer) - down 50% over 5 years
SWL (swallowfield) - down 35% over 18 months
thank goodness he is only a NED at TMMG!!!
he must also be delighted with the performance of TMMG shares
buying <2 years ago at prices of 13p and 17p.
which seems a lot better than the companies he is in charge of.
Despite the share price performance fo the 3 PLC companies he is very well paid
pro-rata i estimate c.£250,000 p.a.
and TMMG pay him £30,000 to attend 12 meetings a year. c. £5,000 a day.
he was appointed in December 2009 before the new mgt team took charge in April 2010
so i wonder .......
A. he is a very astute investor selling TMMG because the price is high,
or B. if maybe a conversation has been had that he should concentrate on his chairman roles at the 3 PLC's (average share price fall is 12% a year he is chairman) and that TMMG can find another NED. and thus he has sold his shares??
interesting for a multi-millionaire (i assume given salary and successful companies he owns)
that having been chairman as Pittards share price fell 95% over 10 years to 2p he then invests the princely some of £4,000!! hardly a great show of confidence in his own chairmanship?
So for me, i was initially disappointed to see a NED sell shares at 34p but after by research and analysis i am much more positive. I think the current mgt team have acheived a lot, have great track records and have regulalry put up significant money backing themselves. Stepehen Boyd's track record, to me, seems very, very poor so if he left the business i think it TMMG would be able to get a replacement with a successful track record.
Time will tell if my thoughts have any substance
but in the meantime i see a successful business, successful mgt team, great CASH flow
and increasing profits at a very low P/E, and a classic H&S chart implying 60p in 2 years.
Friday's Inv Chron had a good write-up on Mission, congratulating them on coming back from the brink of a few years ago and saying that eps of 5.5p are expected and with that they also deserve a better rating.
Well the Market is a funny old thing and since the IMS the price has fallen from 42p to 36p.
The 15% fall made me re-visit my analysis.
Im not surprised that the hollicks of messing up the RNS has caused a few sellers. Although the business is well placed in its market place it is ultimately a people and publicity business so for some part of their broader team to make such a mess up of publicity is definitively not good.
I am a holder for the longer term and still see a business CASH generating 7.5m + ebitda with average debt levels which has an equity value of < 30m. That is just too cheap given the delivery of the current mgt team both in terms of clients won and debt reduction.
Interestingly the recent rise and pull back all tie into the multi-year H&S break out which suggests price rises towards 60p (supported by possible fundamentals). I doubt if such rises will happen in the short term and esp. as the mgt team have blotted their copy book but 66% over 2 /3 years with c. 3% divi yield is good enough for me. The chart could even sustain further falls in the price for a perfect H&S reversal formation but for me its 50/50 that well get there (much as i hate to go against the chart!) as i think investors will value buy before then and also i think the fd and ceo will top up their holdings given that it is now 20% cheaper than when the profit news was originally released as part of IMS.
In summary, whilst being conscious to being blinkered by my holding, i still see a CASH generative business, in a growing market with a proven mgt team that is fundamentally undervalued and support by technical analysis at 36p implying a price moving to c.60p.
The focus is on "concinnity" - though you may call them "quakebuttocks"!!
The final results look sound and again one has to reach for the dictionary (at least this "one" does) to find that concinnity = "Harmony in the arrangement or interarrangement of parts with respect to a whole."
Good word and appropriate - though I assume that the "phedinkus" and "lollapalooza" will show themselves in 2013 (see Jan RNS).
Dividends this year are still on the radar as reported by the more prosaic report of the finance director.
Like the old Readers' Digest - "increase your wordpower" - with TMMG.
i try to make my analysis simple
and this stock meets my tripple whammy criteria with a plus!
by triple whammy i mean....
1.profits are growing in a fragmented but growing sector of the economy
2.cash flow is strong thus repaying debt which transfers value to the equity
3.the rating is rising as investors realise the success of the business.
it is great to see recent press coverage generate extra interest in the company
plus - the stock market is in a bull phase and particularly at the moment seems to be taking an interest in smaller companies
i've re-read all my previous posts to see how much potential the share price has.
- fundamentally undervalued on an average rating
- chart pattern is excellent with quick break throughs any resistance levels
- awareness is growing and thus likely they will sit on an above average rating
going back 2 years ago i analysed, and posted, that 50p was possible (price then was 12p)
in a best case scenario if things worked out favourably. since then actuals have been better than i forecast and the future still looks positive. now within 24 months, 60p seems very realistic and 80p not out of the question if profits continue to grow.
i;ve been tempted to take profits from my original purchases
but now glad that i bought further sub 30p recently and am running a winner
though i will top mslice when reaches a certain % of my portfolio
but in this market any upside is possible so happy to let the trend be my friend
You have misread me mantrova - I said 'whilst I guess it CAN come across as a little arrogant not that it is. I actually quite like ti too....makes me feel more confident, strangely, that they have their finger on the pulse now.
This is now old and I'm guessing there's room for it to be upped. Eps are now forecast at 5.5p for 2013 and the company will start to pay a bit of a div.
I'm looking for 50p and don't consider that to be an ambitious target. I also feel that, unless the sp has a serious spike, there will not be much chance to trade Mission. Best just to sit back and watch it grow.
I feel it doesn't come across as at all "arrogant"......maybe just nicely quirky. I always reckon that you can't chance that style without being pretty sure that you're not going to be shot down in flames at a later date, for getting it wrong.
Basically, I believe what they are saying is that it may not be untruthful to say that an unusual event may be occurring in the not too distant future. The fact that they have described in this manner, would suggest that it is likely to be positive, and whilst I guess it can come across as a little arrogant, as long as that doesn't get out of control, I think it brings a welcome change to an update.
It may not be phedinkus to say that a lollapalooza might be on the cards in the not too distant future.
These are the weighty closing words of the RNS that is positive about 2012 performance - gives expectation of dividends in 2013 and continued growth.
I would guess that TMMG hope this unusual "City language" will be widely commented on the the various media (but it may be that it slipped past a Sunday night editor when tired and emotional people might have had other things on their minds).
I hope it proves to be an example of creativity, goes viral and boosts the reputation of the group and the value of the shares.
the chart pattern shaping up very nicely indeed.....
28-29p has formed a solid base as previous posts
and now with reasonable volume a great golden cross formed
which is supported by all the fundamentals mentioned
and looking at 10 yr charts serious upside possible
if appetitie for risk flows down to smaller caps and
esp. if there is any sign of progress on AIM stocks being allowed in ISA
as would expect to see ratings for solid AIM companies
with a good track record, avaerage debt and increasing forecasts to improve a couple of notches
anyway - imminent update will probably make value clearer for others and investment press
Totally agree with your summary Mantrova. This looks like a decent recovery play with some momentum, although not recent, behind the upturn, so already a recovery WIP. This ranks as one of few stocks on the market that are clearly undervalued, and based upon current earnings and assets declared, and assuming future earnings are achieved, I see fair value for this somewhere in the 45p reagion, so some 50+% upside on current levels.Therefore, that is good enough for me to rank as a BUY.
re the margins. t/o includes buying marketing time on behalf of clients etc..
this is effectively where they just act as an agent and is v.low margin.
the margins they earn on their core work - i.e. using their people to give advice / ideas
is very attractive and at a level one would expect for an advisory business
i think with a bit of hindsight they have managed this all very well
- a great in fill acquisition that will increase eps in year one
- a little bit of extra CASH which will ultimately improve the rating
- 2 good reputable and successful institutional holders with 5% plus stakes
(so they are here for the l.term whcih says great thinsg re mgt team and value)
- the 'cost' for this was - some dilution with sahres issued at 28p when 'true value' (IMHO) is c.40p+
This time its Herald (HIML) - also a good fund... significantly increasing its stake...
IMHO - I think TMMG has a long way to go - Morgan has got the company back to a position of health and is cranking up the growth organically and through acquisition.
Not sure whether this is a concern or an opportunity but for an advisory business operating margins look low - interesting that pre tax at the new acquisition (Bull Dog) are £700k on revenue of £6mill.
well great news that that 750k picked up
by long term small cap investor
esp. as they happy to increase holding in a relatively illiquid stock
i think gives confirmation that 1p divi next year
which is a nice 3% yield on top of everything else
well on the face of it this seems like 2 great bits of news...
buying 6m of t/o and 0.6m of profit for 3.5m of which only 0.5m paid upfront!
the company confirms it will add to eps next year
i guess on the face of it 0.6m PBT would add c.10% to eps
the level of profit seems reasonable for 6m of turnover
with 80 staff though the business seems less productive than TMMG
which i think is potentially an opportunity
eve if overstaffed by c.5 people that might add 110k to 150k to PBT
so in total seems like an absolute bargin and will improve the ebitda ratio
which will put on more people's radar esp. when divi comes to the fore next year
so for me with eps of 5p + not too far away i think a P/E of 8 at least is more appropriate
have tried to think of any risks but other than the normal its a people business / loss of clients
i think it just reflects a privste business purchase price and the david morgan TMMG family factor
well on the upside - it provides more liquidity
and ultimately it is good news to see 5% of the shares being bought
as that shows the institutions are interested which can only help rating
i did wonder why they needed the CASH at all.....
the acquisition is very deferred in terms of CASH flow
so in effect can pay for itself so is this just a step change to take debt down so can now head towards a 1.5 ratio. i can see from the companies view point that until debt is down they are limited with the acquisitions they will buy unless the share price is on a good rating. but what is holdin the rating is too much debt. on esoltion would be to just rade it out over 12 to 18 mths
but if they are seeing more opportunities for in fill acquisitions then makes more sense to give debt a hit and thus hope to get a share price rise and thus be able to fund those in-fill acquisitions with equity..... all just speculation on my part.
stronger trading would also mean that cahs flow is temporarily held back
though of course it could be the negative scenario and all not as rosy as appears.
i;ve considered this but just does not seem to be pointing this way.... the the acquisition, the tone of the RNS, the previous trading updates, the banking support, the share price trend, if any problems they would have gone for > £1m
so i;ve decided that overall its good news
yes a some dilution when i would rather they were geared but great increase to EPS
and just great that they out of fire fighting mode and able to grow with institutional support!
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