Overview
Immedia Group Plc (IME) is a supplier of digital audience engagement solutions and multi-media content for global businesses and leading brands. The company is focussed on providing technology and content business to its clients to transform media channels into entertainment and engagement properties. The company’s platform Dreamstream X provides technology to convert app, web-based and physical environments into an attractive visual zone for entertainment. The company’s client includes leading industry brands which include IKEA, HSBC, FIFA, Subway, Tomatin, O2 and JD sports etc.
 
Key Statistics


Financial Highlights – H1 Financial Year 2018 (£)

(Source: Interim Report, Company Website)

 
For the first half of the financial year 2018 ending 30 June 2018, the company’s reported revenue was £2,016,677 as compared to £1,845,278 for the same period of last year. There was an increase of 9 per cent due to strong relationships with clients and an increase in the product and service development initiatives. Gross profit for H1 FY2018 surged by 6.56 per cent to £1,059,227 from £994,022 for H1 FY2017. The company’s EBITDA for H1 FY2018 was £39,878 against loss of £104,382 in H1 FY2017.Loss from operations for H1 FY2018 was £33,871against loss of £188,146 for H1 FY2017. Finance cost for the period was up by £1,232 in H1 FY2018 to £1,420from £188 in H1 FY2017. Loss after tax for H1 FY2018 was £35,220versus a loss of £188,225. Basic and diluted loss per share was 0.26 pence for H1 FY2018 against loss of 1.37 pence for H1 FY2017. Net CCE (cash & cash equivalents) balances increased to £148,825 for H1 FY2018 (H1 FY2017: £82,138), with the Group remaining virtually debt free.

Share Price Performance

Daily Chart as at May-14-19, after the market closed(Source: Thomson Reuters)

On 14th May 2019, (after the market closed), Immedia Group Plc shares ended at GBX 24.50 and remained flat against its previous day closing price. Stock's 52 weeks High and Low is GBX 33.96/GBX 15.00. The outstanding market capitalisation was around £3.57 million.

Valuation Methodology


Conclusion
There has been a decent top-line performance by the company for the period H1 FY18. The EBITDA was positive compared to a loss in H1 FY2017. The company is having a strong relationship with its clients and is helping them to exceed the forecasted figures. Cash balances increased by £66,687 in the current period. The company had made an investment in AudioBoom Group plc, the leading spoken?word audio platform which had shown significant fluctuations in value during the period. Overall the company remained positive on its investments. The company had recently partnered with JD Sports and launched JD-X app. The company’scollaboration with SUBWAY® Radio is performing exceptionally well. Thesolid improvement in revenue and profitability is reflected by new business coming on stream and the impact of cost control measures taken by the company specifically on AVC Immedia division. The company is benefited from an installation and equipment supply contract after a successful service implementation with a major UK financial services institution.The company hadsuccessfully acquired AVC media and strengthened the Board with the appointment of new COO and Financial Controller. Based on the strong growth prospects, and supported by valuation done using the above method, we have given a “Speculative BUY” recommendation at the closing price of GBX 24.50 (as on 14th May 2019) with single-digit upside potential based on 0.73x NTM EV/sales (approx.) on FY19E sales (approx.).
 
*All forecasted figures and Peer information have been taken from the Thomson Reuters.

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