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An underrated recovery play

Advertising and marketing group has slimmed its cost base, sold off non-core businesses and is primed for recovery
April 2, 2024
  • Revenue up 8 per cent to £86.3mn
  • Adjusted pre-tax profit falls from £7.9mn to £4.2mn
  • Underling EPS down from 6.9p to 3.1p
  • Closing net debt of £15.4mn

UK advertising and marketing specialist Mission Group (TMG: 21p) has started the 2024 financial year on a firmer financial footing than many investors feared after last autumn’s profit warning (‘No dividend until 2025: Is Mission Group still a recovery play?’, 23 October 2023).

To date, management have taken £5mn of annualised costs out of the business at a cost of £0.7mn, sold the group’s 80 per cent stake in non-core technology business, Pathfindr, for an initial cash consideration of £1mn along with a three-year earn-out, and refinanced its debt facility with NatWest. True, headline pre-tax profit declined from £7.9mn to £4.2mn, and closing net debt of £15.4mn was £4mn higher than a year before, but both metrics were better than forecast in late October.

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