Ebiquity says full-year profit will miss market expectations

Shares in Ebiquity tumbled on Tuesday as the media and marketing consultancy group warned that full-year profits will come in below market expectations.

In an update for the six months to 30 June, Ebiquity said that while revenues from the media segment and analysts & tech segment grew 7% on the previous year on a like-for-like basis, Intel sales are down 9% in the first half on the back of uncertainty from the CMA investigation into its planned disposal, announced in February.

Ebiquity said that uncertainty from the Competition and Markets Authority's phase 2 investigation into Intel, due to begin no later than December, is likely to keep impacting revenues and profit in the second half. Intel makes up 22% of the business.

The company said it has accelerated the phasing of investment in the media and analytics & tech segments - which make up around 78% of the business - in the first half on the back of strong new business pipelines. As a result, it already has visibility into faster double-digit revenue growth within these segments in the second half. Although this accelerated investment will impact first-half operating profit, performance in these segments for the full year is anticipated to meet existing expectations.

"Overall, the impact of the performance of the Intel segment will not be entirely offset by the strong performance from media and analytics & tech and consequently the board currently anticipates profits for the year to be less than full-year market expectations," it said.

Numis maintained its profit before tax and earnings per share forecasts for the continuing businesses at £7.0m/6.1p for FY18, rising to £8.4m/7.2p for 2019. However, due to weakness in AdIntel, it cuts its group PBT/EPS forecasts to £9.3m/8.3p from £10.2m/8.8p for FY18, rising to £10.6m/9.2p from £11.5m/9.8p for 2019.

At 1410 BST, the shares were down 22% to 44.12p.