Ebiquity : Interim Report for 6 months ended 31 June 2016

Ebiquity plc

Interim Results for the six months ended 30 June 2016

Ebiquity plc, the leading independent marketing analytics specialists, announces interim results for the six months ended 30 June 2016. Ebiquity provides services to more than 1,100 clients across 85 countries, including over 80%1 of the top 100 global advertisers.

• Total revenue up 6.8% on a reported basis to £42.3m (HY2015: £39.6m), up 5.2% on a like for like2 basis

• Revenue from MVM and MPO now account for 74% of Group revenue (HY2015: 69%)

• Underlying3 operating profit up 8.2% to £8.6m (HY2015: £7.9m)

• Underlying PBT up 8.5% to £8.0m (HY2015: £7.3m)

• Underlying diluted EPS of 6.9p (HY2015 at consistent effective tax rate: 6.7p)

• Net debt decreased by £0.8m to £28.1m (31 Dec 2015: £28.9m)

• Launch Growth Acceleration Programme to drive organic growth, take market leadership opportunity and support long term, sustainable double-digit revenue growth

  MPO and MVM divisions continue to drive growth

• Marketing Performance Optimization ("MPO") achieved record revenue growth in the first half, demonstrating our clients' increasing desire to maximise returns on marketing investments

• Media Value Measurement ("MVM") recorded a number of new business wins over the first half, and is expected to benefit from the heightened awareness of media transparency in the second half

• Market Intelligence ("MI") continues to operate in a competitive marketplace. In HY2016 we have continued to advance its core Portfolio platform offering. Upgrades to the service, which were rolled out to selected clients in Q2 2016, have been well received, and will continue to a broader client base in the second half of 2016

• Two-thirds of revenue denominated in non-Sterling currencies; results include some revenue benefit from Sterling's weakness

"Ebiquity achieved a good performance for the first six months of the year, with our MPO practice producing another standout performance. The first half also saw an increasing focus on media transparency which is translating into positive momentum for our MVM practice. Within MI, we have received a positive response from clients to our new Portfolio platform and we are excited by the upcoming launch of our digital offering.

"Overall the activity over the first six months has combined to provide forward momentum into the second half and we expect to be in line with the Board's expectations for the full year."

"The Company has engaged in a thorough process to define a Growth Acceleration Programme to enable Ebiquity to capture the growing global demand across our business but in particular for our MPO services. The Programme will build on our strong foundation and result in a higher quality business and drive double digit revenue growth."

Ebiquity's Capital Markets Day for institutional investors and analysts will take place in London in early November, where we will provide further information on Ebiquity's strategy and business outlook.

1Source: Advertising Age 2015.

2Like for like ("LFL") figures adjust the prior year results to include the results of acquisitions as if they had been owned for the same period in the prior year.

3 Underlying results are stated before highlighted items.

I am pleased to announce that for the half year to 30 June 2016 we have continued to grow our revenue and operating profit.

• Total revenue up 6.8% on a reported basis to £42.3m (HY2015: £39.6m), with like for like revenue growth of 5.2%

• Underlying operating profit growth of 8.2% to £8.6m (HY2015: £7.9m)

• Underlying PBT growth of 8.5% to £8.0m (HY2015: £7.3m)

• Underlying diluted EPS of 6.9p (HY2015 at consistent effective tax rate: 6.7p)

• Positive impact of exchange rate movements, increasing total revenue by 2.5%

  Demand for our marketing analytics services continues to grow as marketers put increasing emphasis on data driven insights and marketing ROI and as consumers expect more personalised experiences. These trends increasingly rely on data to help companies determine the right type and levels of investment to achieve their communications and business objectives. Ebiquity's services are designed to support our clients with these decisions.

  Growth Acceleration Programme

  The evolving marketing landscape combined with the changing nature and scale of client demand has created a significant opportunity for Ebiquity. In particular, our MPO practice has continued to report record year-on-year growth, reflecting the rapidly increasing demand for the division's services. We foresee a significant future growth opportunity by organically expanding MPO's service offering in the US and geographic reach in Western Europe and APAC.

  Simultaneously, the operational infrastructure of the Company requires investment in order for it to function optimally in its next stage of development. To date we have operated a "lean" structure that now requires investment in people and systems to support the MPO Growth Acceleration Programme and to capitalize on the increasing opportunity to serve clients on a more global basis.

  We will report the Growth Acceleration Programme's progress against a number of identified milestones over the next two years.

  As a result of the above strategy we plan to achieve the following business objectives:

• Group revenue CAGR of +10% from 2016 to 2021

• MPO and MVM to represent more than 80% of revenue by 2021

• A more geographically diversified revenue base

• Move to a medium-term operating profit margin of c.12-13% by 2018

Despite the continued growth anticipated from both MPO and MVM and the future acceleration of revenue growth, the investment requirement is anticipated to reduce reported earnings in 2017 and 2018, but return ahead of today's levels in 2019.