Testing is not just for Covid

Pearson released a decent Q3 trading update thanks to the very strong dynamism in Pearson VUE and PTE sale offsetting the Higher Education division which continues to suffer. This publication was welcomed by the markets due to the upwards revision to the guidance.

H1 23: Robust results amid AI concerns

Pearson delivered decent results in H1 23 with consensus-beating revenue and operating profit in line. (Generative) Artificial Intelligence was at the heart of this earnings release but for the moment there is no materiality in one sense or the other. The group reaffirmed its guidance for FY23 and its mid-term outlook.

A Q1 23 full of positive surprises/ Chegg shock

Following a good Q1 23 trading update, Pearson reaffirmed its guidance and announced a share buyback programme of £350m starting in H2 23. On May, 2 Pearson was rocked by negative inferences from GPTs on Chegg’s business

Pearson, the threat of declining HE revenues overshadows the good FY22 results.

Pearson’s stock is down 2% after the FY22 report. Profits posted an increase although Higher Education declined. The FY dividend was raised. The share buy-back programme of £350m in FY22 went smoothly but was not exceeded unlike for many of the peers.

Q3 22: Back-to-school in (almost) full force

Pearson is up as much as +10% today after issuing a reassuring 9-month 2022 trading update, stating that it is “confident of being able to navigate the challenging macro-economic environment”. The FY22e guidance was re-affirmed. After FY21, Q1 22, and H1 22 updates, this is the fourth publication that has been acclaimed by investors, giving increasing credibility to the group’s digital transformation.

The digital strategy is paying off

Pearson was up as much as 12% today after reporting better-than-expected H1 22 results. The company said that it will meet its FY25 guidance two years in advance, i.e. in FY23, thanks to £100m in cost savings identified (synergies and efficiencies from the recent reorganisation). Again, a very pleasant surprise.

Solid Q1 22 paints a rosy picture for the full-year and beyond

Pearson’s stock is up 3% following an encouraging Q1 22 trading update in which the company reaffirmed its guidance and announced a promising acquisition.

Pearson boosts investor morale with a buy-back and an upbeat outlook

Pearson’s stock is up 12% after the company confirmed its recent FY21 estimates and raised its FY dividend. Investors also welcomed an unexpected £350m share buy-back programme for FY22e.

A good run in FY21 despite some setbacks

Pearson issued a very satisfactory trading update (FY21 unaudited figures), highlighting a strong top- and bottom-line performance, ahead of expectations, as well as a robust financial position. Although Higher Education continued to decline, it did so at a slower rate than anticipated.

Q3 21 trading update: good but not great

Pearson shares are down 12% this morning following the publication of the group’s 9-month trading update. The drop in Higher Education has dampened investors’ confidence.

Lukewarm H1 21 results

Pearson published satisfactory H1 results, with revenues and adjusted OP above expectations. However, as international markets are reopening more slowly than anticipated due to new COVID-19 variants, the group left its FY21e guidance unchanged. The strategic review of international courseware local publishing businesses launched in March is now largely complete.

The digital strategy is starting to bear fruit

Pearson published an encouraging Q1 21 trading update, with revenues up 5% organically despite tough comparisons. The FY21e guidance remains unchanged.

New year, new reorganisation, fed up

Pearson confirmed its recent FY20 estimates (see our Latest, 20/01/2021), reporting in line figures (-10% organic growth, adjusted OP: £313m, adjusted EPS: 28.7p). Final dividend is unchanged at 13.5p. Positive outlook: Despite a tough FY20, the group forecasts a return to revenue growth from Q2 21 and adjusted OP to be in line with current market expectations. Pearson also announced plans to cut office space and a new reorganisation into five divisions in FY21e at a cost of £40-70m.

FY20 in line, surfing on the wave of online learning

Pearson’s 2020 trading update is in line with a 10% organic sales decline and adjusted operating profit in the range of £310-315m (AV at £309m). Global Online Learning (+30% in Q4) pulled the group due to the wave of distance learning. The pandemic still clouds visibility.

In line with expectations but still high uncertainties ahead

Pearson’s 9-month trading update highlighted that the rising digital activities were unable to offset the test centre and school closures linked to COVID-19. The group’s solid financial position remains a positive point to retain. We are likely to raise our forecasts considering our below average expectations but expect to reiterate our cautious view on the stock.

Team Internet Group - Growth and returns, acquisition bolsters outlook

Team Internet’s FY23 results exceeded our forecasts and consensus on revenue and EBITDA. Online Marketing was driven by increased consumer engagement, reflecting investment in delivering more targeted ads across a wider array of channels. The group’s latest acquisition, Shinez, strengthens Online Marketing via diversification of publishers and is earnings accretive with scope for further synergies. Online Presence returned to strong revenue growth, driven by demand for exotic domains, pricing op

SpaceandPeople (SAL LN) - 2023a: return to profitability and growth

SpaceandPeople has reported a strong recovery with growing revenue, a return to profit and a healthy net cash position. Revenue was up 24% y-o-y to £5.8m, just ahead of our forecast for £5.7m. PBT, at £103k, was also ahead of our expectation for about break-even. Net cash improved to c. £700k vs. c. £400k in 2022a. Growth returned across all units with the UK reporting sales up 16% in promotions and 28% in retail, and German retail recorded revenue up an impressive 43%. New products such as the

Allenby Capital: Mirriad Advertising plc: Update

Mirriad Advertising plc (MIRI.L), a leading global provider of in-content advertising and virtual product placement (VPP) technology and services, has conditionally raised £6.8m (gross) at 1.25p/share. The additional funds will be used for working capital as Mirriad’s product set is substantially complete after several years of heavy investment and it is now leveraging the sales and marketing operations of its supply side major entertainment partners. These account for c. 40% of the US TV advert

LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

Eagle Eye+ (EYE, House Stock at 470p) - Tesco: a new AI reference client!

LBG Media (LBG LN) - Strong momentum into FY24

Resilient growth in core markets: Revenue of £67.5m is +7.5% YOY (FY22: £62.8m) and +0.7% vs. Zeus estimate of £67.0m, with growth across Direct and Indirect divisions benefitting from increased activity with new and existing clients.

The MISSION Group - FY25 operating income target of £100m

The MISSION Group’s FY22 results are in line with the year-end trading update at the operating income level and a little ahead at the headline PBT and EPS level. Organic revenue growth of 6% was boosted to +10% by acquisition, with a headline operating margin of 10.9%, a shade behind the prior year figure of 11.1% reflecting well-documented cost pressures. The group has been extending its offering through acquisition and organic growth, with a particular focus on data, digital and social media.

The Pebble Group - Two distinct businesses in one

The Pebble Group’s AGM update confirms that trading is in line with FY24 expectations, with attractive opportunities for its two distinct businesses in the large, fragmented promotional products sector. Facilisgroup is a SaaS business, helping North American distributors to optimise their operations, with access to an approved supplier roster. Brand Addition services global brands’ needs for branded product for in-house and external programmes. The well-publicised dip in tech sector marketing sp

Nexxen - Q4 results +2-4% ahead of cons, FY24E forecasts +3-4% ahead

Nexxen has announced Q4 net revenue +2% ahead of consensus, Q4 adjusted EBITDA +4% ahead of consensus, and FY24 guidance that leads our FY24E revenue and EBITDA to be +3% and +4% ahead of consensus. Q4 net revenue of $90.5m is +2% ahead of Q4 consensus of $88.5m, with the Programmatic division’s $86.0m of net revenue delivering 95% of group net revenue. After successfully realising $65m of annualised synergies from the Amobee acquisition at Q2 23 results, strong cost control has driven Q4 adjust

Next 15 Group PLC

While 2.5% revenue growth and 6.1% EBIT growth is relatively pedestrian by Next 15’s historic track record, we see the last year as one of the most impressive reported by Next 15. Revenue growth and margin expansion has been delivered in the face of a significant slowdown in demand from the group’s historic core technology sector clients. We believe a number of factors are in play here, not least the growing diversity of Next 15’s client and business mix as a result of M&A over the last th

LIBERUM: Agents of change: Evolving for modern demands

Team Internet Group (TIG LN) - Online Marketing bolt-on

Following the record FY23 results announced yesterday, Team Internet announced an accretive bolt-on acquisition for an initial consideration of $42m. The Group is continuing its strategy of making accretive bolt-on acquisitions, aiming to diversify its revenue model and expand its traffic monetisation options and capabilities. The deal is expected to complete in late May 2024, at which point we will incorporate the impact into our forecasts. We continue to believe that Team Internet’s strong tra

Headwinds persist, yet green-shoots emerge

Headline trading to 23rd April was in-line with expectations and highlights continuation of existing trends, with weak industry-wide digital advertising spend partially offset by resilient performance in Print. Group revenues fell 6% y/y, with Digital down -15%. In Digital, alongside the weaker advertising spend backdrop, a shift by Facebook towards short-form video/ reels and away from digital news has impacted traffic referrals to Reach we continue to see some muted structural risk to traffic

Allenby Capital TMT Update - 04.03.24 - ENSI.L, MIRI.L, BIRD.L, PPS.L, CHSS.L, ENET.L, SEEN.L

Please find below our weekly update covering themes that we feel that are of interest to investors and participants in the small and mid-cap TMT sector as well as commentary on recent newsflow.

Allenby Capital: Mirriad Advertising plc: Update

Mirriad Advertising plc (MIRI.L) is a leader in virtual product placement (VPP) and in-content advertising technology and services, dynamically inserting brands and products into video content. It provides new revenue opportunities for content producers/media companies and is proven with consumers to be significantly more effective and less intrusive than traditional formats. After several years of heavy investment, Mirriad is moving from market building to a growth phase. This should accelerate