Shares in Veltyco are up 123% since its mid-2016 IPO

Companies: B90 Holdings plc

AIM-listed marketing firm Veltyco Group plc says its full-year results, due in April, will be "significantly" ahead of expectations when released after December trading capped a strong finish to the year.

The online marketing company, which specialises in gaming, lottery and financial trading businesses, told investors on Tuesday that it expected net revenues to be in excess of €5.7m, more than double 2015, with adj operating EBITDA to be in excess of €2m.

As a result, the Board now expects full-year results for the year ended 31 December to significantly beat market consensus.

Veltyco shares jumped 25% in early trading on Tuesday. The micro-cap listed last June and has since seen its share price increase 123%.

In an October initiation research note, broker Zeus Capital said Veltyco had a solid opportunity in a growing sector:

"The business operates in a significantly large online market which generates c. €30bn (£26bn) of annual gross revenues and there are significant opportunities to grow the business both organically, through investing in marketing, and through acquisitions which will scale the business faster."

With an experienced management team with ample gaming industry experience, Zeus said Veltyco should increase significantly for shareholders:

"Increasing scale of revenues and leveraging the current cost base increases margins significantly over our forecast period. The margin step change (EBITDA c. 40% from 28%) combined with high levels of cash conversion (in excess of 90%) will increase returns significantly for shareholders, FCF yield grows to >19% in FY18."

The information contained within this post is based on personal experience and opinion and should not be considered as a recommendation to trade nor financial advice.