Yesterday Brave Bison (LON:BBSN) issued its Trading Update for the first six months of its current year.
On net revenue up just 1% to £10.1m for the six months to end June, the digital advertising and technology services reported that it has made a 20% advance in its adjusted pre-tax profits to £1.8m.
In that same period the company’s net cash balance was up 58% at £6.8m, which is compared to its market capitalisation of just £30.5m.
Its shares responded with a 16.5% leap in price to 2.65p – they have since slipped back slightly, but there is more to come.
The Business
The company states that it operates in a world where complexity is the only constant, it demands a new breed of company and as such it has Brave Bison, which is a different beast: a media, marketing and technology company purpose built for the digital era.
The group has an impressive list of top-name clients including Currys, TikTok, Asus, General Mills, Primark, Muller, Fiskars, KFC, Furniture Village, Jameson Irish Whiskey, Pfizer, MKM Building Supplies, LinkedIn, New Balance and Prime Video, amongst many others.
With its headquarters in London, the group operates through a globally distributed workforce in over nine countries providing its services to global brands and advertisers through its four business units.
- Brave Bison Performance is a paid and organic media practice, which plans and buys digital media on platforms like Google, Meta, TikTok, Amazon and YouTube, as well as providing search engine optimisation and digital PR services.
- SocialChain is a social media advertising practice, creating content for social media platforms and which works with influencers to create and distribute marketing content.
- Brave Bison Commerce is a digital commerce practice that creates, improves and maintains ecommerce websites and manages the customer experience in a digital environment.
- Brave Bison Media Network is a portfolio of channels across YouTube, Facebook, Snapchat, TikTok and Instagram, they generate hundreds of millions of monthly views, and the advertising inventory from each channel is sold through online advertising exchanges, with popular channels including The Hook, PGA Tour, US Open and Link Up TV.
Management Comment
Executive Chairman Oliver Green stated that:
“We are pleased to report strong underlying performance in the first half of the year and remain confident that momentum will build as we head towards peak trading at the end of 2024.
With SocialChain now fully integrated into the Brave Bison platform, our proposition to advertisers connects content, data and technology and allows us to run campaigns across the marketing funnel from brand through to performance.
Our strong balance sheet and net cash position will allow us to invest further into the business which is well primed for growth in an AI-driven and increasingly complex digital world.”
The Equity
With nearly 1.3bn shares in issue, Michael Ashcroft is the largest holder with 24.68% of the equity.
Others include the Green Family (19.47%), Jarvis Investment Management (10.29%), Tangent Marketing Services (8.87%), James Russell DeLeon (7.38%), Hargreaves Lansdown Asset Management (5.11%), Slater Investments (4.66%), Merchant Capital Manager (4.40%), Vesuvius Ltd (4.35%) and Dr Graham Cooley (2.99%).
Analyst View
Andrew Renton at Cavendish Capital Markets has taken the view that the group’s shares look compelling at a rating just over half that of its peers.
He has a Price Objective of 3.4p on the shares.
For the current year to end December he is looking for net revenues of £21.0m (£20.9m), with adjusted pre-tax profits of £3.2m (£3.6m), generating 0.23p ((0.27p) per share in earnings.
My View
Two months ago, pursuing its earnings accretive acquisition strategy, the group made an all-share offer approach to The Mission Group (LON:TMG), a fairly similar-based operation.
It did not open its books to BBSN for due diligence, which in turn saw the approach fall apart, at a cost of less than £50,000 to the company as it walked away.
I think that the debt-laden Mission Group probably missed a big trick in its refusal – because such a deal could have created significant benefits to both sides.
The shares of Brave Bison, at just 2.35p each, will edge ever closer to their five-year High and could well break through that 3.2p level fairly soon, especially if other deals come to the fore.