Ebiquity PLC – Final Results

Ebiquity PLC – Final Results

Ebiquity plc ("Ebiquity" or the "Company"), a leading independent marketing and media consultancy, today announces its preliminary results for the 12 months ended 31 December 2019. Ebiquity works with 70 of the world's top 100 advertisers served from 18 offices and by 550 staff.

 

Headline Results1

 

2019

2018

Change

£m

£m

£m

Revenue

68.7

69.4

(0.6)

Underlying Operating Profit 2

6.2

6.3

(0.2)

Underlying Profit before Tax 2

5.3

5.2

0.1

Underlying Earnings per Share 2

3.6p

3.7p

(0.1)p

Statutory Operating Profit

(4.2)

(1.4)

(2.8)

Statutory Profit before Tax

(5.1)

(2.5)

(2.6)

Statutory Earnings per Share

(8.8)p

(6.4)p

(2.4)p

 

 

Post year-end events: COVID-19 & new CEO

·      Business operations and service delivery maintained at normal level during COVID-19 disruption with staff working remotely across global network

·      Adverse global economic and media trends are impacting revenue from some clients and sectors

·      Cost reduction measures being taken to protect business including use of government support schemes in several countries

·      Financial position at 30 April 2020 remains strong: net debt of £6 m; cash balances of £13 m and undrawn bank facilities of £5m

·      Successful banking covenant modification from July 2020 to May 2021 (to a simple liquidity test).

·      Dividend payment deferred

·      Nick Waters, former Executive Chairman, UK & Ireland, Dentsu Aegis Network appointed Group Chief Executive Officer, with effect from 1 July 2020

 

2019 highlights

·      Underlying profit before tax increased to £5.3m (2018: £5.2m) due to reduced interest charge as a result of £20m repayment of the loan facility

·      Strong balance sheet: Net debt at 31 December 2019 reduced significantly to £5.6m (31 December 2018: £27.5m) following completion of AdIntel sale in January 2019

·      Improved operating cash flow conversion of 144% (2018: 138%)

·      Significant client wins include Amazon, Facebook, Nike, Verizon Wireless and Volvo

·      Impairment charge of £5.8m taken in relation to Stratigent, the loss-making US MarTech business, following decision to wind-down its operation

 

Divisional highlights

Media: Media Management, Media Performance and Contract Compliance

·     Revenue of £54.6m, increased by 1%

·     Contract Compliance revenue increased by 13%

·     Media Performance & Management revenue declined by 1%

·     Shared service media delivery centre in Spain expanding and delivering operational efficiencies

 

Analytics and Tech: Advanced Analytics, MarTech and AdTech

·     Revenue declined 7% to £14.1m; excluding Stratigent increased by 11%

·     Operating profit reduced by 31% to £1.0m 

·     Advanced Analytics practice expanded into France and USA

·     AdTech advisory practice increased revenue by 105%

 

Note 1: all figures in the table refer to continuing operations following the disposal of the Advertising Intelligence business to Nielsen Media Research which completed on 2 January 2019.

Note 2: Underlying operating profit is defined as the operating profit excluding highlighted items. These include share-based payments, amortisation of purchased intangibles and non-recurring items. Underlying profit before tax and earnings per share are calculated based on the underlying operating profit.

 

Alan Newman, Interim CEO of Ebiquity said:   

 

"Ebiquity made good progress in 2019 and our results met the Board's profit expectations, with our high potential consulting practices growing strongly. Since the COVID-19 disruption began we have maintained  a high quality service to clients throughout and are proud of all our staff who have responded with admirable resilience and commitment to the challenges during this difficult time.

 

The Company continues to have  a strong liquidity position supported by recent cash conservation measures.   Trading in the first quarter of 2020 was as expected. However, the reduction in economic activity and marketing spend caused by COVID-19 has affected our business as some clients and sectors have reduced their service needs while others remain resilient. Our business in 2020 remains difficult to predict with confidence and we continue to withhold guidance.

 

We will continue to monitor economic conditions closely and adopt a prudent approach to our cost base as we and our clients adapt to, and emerge from the global crisis.  We believe that the rapidly changing environment and increasing complexity in advertising markets will reinforce clients' demand for transparency and data-driven advice on maximising the returns from their media spend.  

 

Despite the uncertain outlook, we remain confident that our market leadership and a management team strengthened by the newly appointed CEO, Nick Waters, will enable the Group to develop the business successfully through the remainder of this year and beyond.

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