Marketing Group's (ST:TMGR) Q3 results show that it is now properly focused on growing the business, with group agencies worldwide taking on larger pieces of work in collaboration. EBITDA margin to net revenue has grown in each of the last three quarters and we have moved our full year, FY18 and FY19 earnings’ forecasts ahead by c 10%. Net cash at the end of the quarter had increased to €1.7m from €0.9m at end June. This is facilitating investment in new initiatives, including the group’s new blockchain-enabled global media agency, Truth. The rating should start to improve as confidence builds that management can deliver on its strategy.
Progress on the ground
Turnover of €7.0m (Q2: €6.3m) contained a one-off element (of undisclosed scale) from media business over the course of the general election in New Zealand, where the National Party is a client. The theory of global teamwork is now being put into practice with collaborative pitches, with account management close to the client and the subsequent implementation work done in the group agency best placed to deliver on the brief, regardless of geographic location. This approach is facilitated by TMG’s internally-developed inter-agency collaboration platform, Temba, launched in August 2017. It should help TMG achieve scalability without needing to replicate resource, driving margin alongside net revenue growth.
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