Why Are iSentia Group Limited’s Shares Rocketing High Today?

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iSentia Group Limited (ASX: ISD) held its Annual General Meeting on 15 November 2018 and provided updates on its plans and performance so far in FY 2019. Following this news, the share price of the company increased by 30.233 percent as on 15 November 2018 (AEST 1:30 PM).

While addressing the shareholders at AGM the chairman informed that the company remains the leading provider of media intelligence with 3,420 subscription customers across 11 markets in the Asia Pacific region. He also informed that the 79 percent of the company’s revenue is recurring, and the majority of its customer contracts are of 12 to 24 months in terms of duration.

While talking about the Financial Performance of FY 2018, he told that the media intelligence revenue of $132.6 million was slightly below the company’s guidance range mainly due to the challenges in ANZ including pricing pressure, lower print and broadcast media volumes and customer churn. However, despite this, the media intelligence EBITDA of $33.1 million was in line with October 2017 guidance highlighting the company’s focus on delivering significant cost and operational efficiencies during the year. The company also experienced strong operating cash flow of $28.4m which reflects high level of recurring revenue. Further, the net debt of the company reduced from $51.7m in FY 2017 to $43.1m in FY 2018.

The company has recently put in place a dedicated new business team as part of its push towards focusing on driving new business.  It has invested in new customer relationship management (CRM) and lead-generation capabilities to have a more disciplined and data-led approach for business development. In addition to this, the company has also revised its incentives scheme to ensure continued focus on new business.

The company is also focused on Product development and that is why it is planning to introduce new project management capabilities and also it is moving to more agile development processes. In the first quarter of FY19 alone, the company released numerous product enhancements including a new analytics dashboard for improved data visualization and new content feeds that allow customers to view multiple content sets at once.

In FY 2018, the company initiated a cost-out program that could yield up to $11 million in cost savings by the end of FY 2020. The cost reduction program of the company is delivering significant savings through the shifting of functions to lower cost locations, streamlining and automation of operations, outsourcing and rationalization of property and other costs. The company has reaffirmed its FY19 revenue guidance that was provided to the market in August and the same would be in the low to mid $120 millions’ range and EBITDA to be in the low to mid $20 millions’ range.

In the last six months, the share price of the company decreased by 73.29 percent as on 14 November 2018, and traded at a PE level of 33.59x. ISD’s shares traded at $0.280 with a market capitalization of circa $43 million as on 15 November 2018 (AEST 1:30 PM).


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