QuickView: Perform Media

Perform Media (PER.L) is a rare beast in UK Media; a structural growth story driven by niche content rights, global reach and a growing technology platform. Financial performance continues to be impressive and the short to medium term growth profile is amongst the best in the sector. In terms of short-term catalysts, FY13 will be an important year for newsflow although H2 weighted. Share price performance is therefore likely to be driven by growth rather than a re-rating.

FY12 results: In-line, impressive progress
FY12 revenues came in at £151.6m (+47% y-o-y) and adjusted EBITDA was £37.5m (+103% y-o-y). All the KPIs showed impressive progress; critically, content costs grew by only 14%. Net cash for the end of December was £26.5m.

All eyes on FY14
Although FY13 will be a significant year in terms of delivery and growth; FY14 will see the main impact of the Watch&Bet licence renewals and the 2014 World Cup. Perform looks well-placed to leverage its niche rights and global scale. The RunningBall acquisition has also strengthened its offering to the online sportsbooks. Elsewhere, FY13 will see continued investment in the content and platform offerings.

Little change to short-term numbers but risks on the upside
We do not anticipate significant revisions to consensus FY13 estimates following these results (FY13 revenue growth of 32%, adjusted EBITDA growth of 50% and EPS growth of 46%). Early visibility for FY13 looks encouraging, with over £130m of revenue already contracted. We would not expect FY14 revisions in the absence of Watch&Bet renewals newsflow, our sense is that risks lie on the upside.

Earnings growth will be primary driver of performance
With content cost inflation running well behind revenue growth, the core profit driver for the group remains intact. Coupled with the potential for Watch&Bet licence renewal upside and the re-positioning of the goal.com portals in advance of the 2014 World Cup the medium-term growth outlook is promising. In the absence of short-term upgrades the FY13 P/E of 26.1x leaves little room for expansion investors will have to settle for a mere 46% EPS growth instead.

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