Ebiquity shares surge 25% as its debts narrow consistently

Ebiquity shares surge 25% as its debts narrow consistently

Ahead of its preliminary results expected towards the end of March, marketing and media consultancy firm Ebiquity (LON:EBQ) has seen its shares bounce on Wednesday following an update for the year ended 31 December 2019, which showed that it had continued to improve its debt position.

The company said it traded in line with the Board’s expectations, with performance trends consistent between the first and second halves. Ebiquity said it continued to see revenue growth in its Advanced Analytics, AdTech and Contract Compliance practices, though its Media practice revenues dipped ‘slightly’ year-on-year.

The real talking point was that the company’s net debt position at the year’s end was £5.8 million, down from £7 million at the half year and representing an impressive turnaround from the £28 million debt position at the end of the previous year. 

Ebiquity said the bulk of the improvement came from the disposal of its Advertising Intelligence division, and added that the significant improvement in its net debt had increased its financial flexibility and ability to support future developments, such as its recent acquisition of Digital Decision BV. 

Ebiquity opportunities and outlook

Its statement continued:

We believe that the announced closure of Accenture’s media auditing practice highlights the need for independence in our sector and will provide opportunities for Ebiquity as the leading independent, global media consultancy to capture market share over the next year or so.”

“We remain confident that Ebiquity will be able to fulfil its potential and deliver improved performance in the medium term.”

Responding to the update, the company’s Interim CEO Alan Newman, said:

“We are pleased to have met expectations in the last year in terms of profitability and grown high potential areas of our business. We continue to re-engineer the business to deliver profitable growth and seize market opportunities that reinforce our position as the leading, independent global media and marketing consultancy, including those arising from the closure of Accenture’s media auditing practice.”

Investor notes

Following the update, Ebiquity shares rallied 24.98% or 6.49p to 32.50p per share 19/02/20 11:54 GMT. The Group’s p/e ratio is 7.03, and their dividend yield is modest at 2.22%.