Sanlam Securities Broker rating25 Apr 2014 10:38
Morning...
The below is an extract from a email I received this morning. Reinforces what I said earlier. Looking forward to the trading update on 13 May. Source : Sanlam Securities. I'll also be posting on Fastjet....
Company comment
Cello Group (CLL.L) Complimentary bolt-on acquisition
Media: Insight and strategic marketing group
Recommendation: BUY (Previously Buy, 17.04.13)
Closing price: 86.5p Target price: 105.0p Market cap: £72.0m
n The bolt-on acquisition of Line Digital, an Edinburgh based digital agency, specialising in web design and development and online marketing strategy, is complimentary to Cello Signal. The total consideration for the acquisition was small, under £0.5m.
n Strategically, the acquisition reinforces the digital capabilities. Line will be fully integrated into Cello Signal’s Blonde Digital, digital communication and web-based marketing. The addition of 13 new employees will support Blonde’s growing maturity in enterprise scale design and build.
n Line’s client base is also complimentary and includes Scottish Friendly, Standard Life, Tesco Bank, Travel Corp and Edinburgh Fringe.
n The acquisition is marginally profitable and therefore we leave our forecasts unchanged.
n Client sentiment towards increasing marketing spend is encouraging. The latest IPA (Q1 2014) Bellwether survey revealed the record largest single upwards revision to marketing budgets since the survey started in 2000. We believe that Cello Signal is well positioned to capitalise on this trend.
n A trading update will be released on 13 May 2014. We expect the positive outlook as mentioned in the prelim statement in March 2014, “continued good booking momentum and a solid new business pipeline” to be reiterated. The shares are fundamentally undervalued, trading at 7.2x 2014 EV/EBITDA and a sustainable 2014 dividend yield of 2.9%.
DYOR
Cat ate my homework
Miss G
;-))