Be Heard has issued its January trading update indicating organic revenue growth of 24% for 2017. This implies a c5% beat. Given the recent win rate management had expected this to turnout even more strongly but timing factors mean that these revenues will fall into 2018. Building out resource to support this very fast growth rate has however taken its toll in December and led to a mismatch on revenue and costs. While we expect to reduce our forecast EBITDA for 2017 we do not expect to make any changes to our 2018 assumptions given the client win momentum and healthy visibility. The Company has also announced board changes. Executive Chairman Peter Scott becomes CEO, NED David Morrison becomes non-executive Chairman and the Company intends to split the CFO/COO roles once they have recruited a new CFO (Robin Price to retain COO role). While in the short term there will be some disappointment on 2017 profitability the underlying factor is strong growth (something which agency groups do struggle with in terms of cost planning when growth rates are very high) and from this perspective this demonstrates that the strategy fundamentals are sound in our view.
