Jeremy Harbour

Jeremy Harbour
Executive chairman The Marketing Group plc and founder of private equity firm Unity Group

Datum för intervju: 2016-08-28

Stockpicker intervjuar
The Marketing Group

Please give our readers an introduction of The Marketing Group.

The Marketing Group plc is a UK based global agglomeration of 17 profitable and debt free marketing services businesses, all run by exceptional best of breed CEOs with a stable of blue chip clients.

Can you elaborate on The Marketing Groups business model?

Our agglomeration model targets and acquires the best small to medium sized players in the marketing services sector around the world. These companies join The Marketing Group but retain their own brand and management style, all while benefiting from the scale, global coverage and access to new products and markets as well as other synergies associated with being part of a much larger group. Our 17 companies cover social media, content creation, events, PR, e-learning, app development, game development, lead generation, sponsorship, TV production, loyalty, branding, digital marketing, web and e-commerce and many other services. Our board of directors includes award winning entrepreneurs, major influencers, ex senior management from large media companies and a full M&A team. One huge advantage we have is our ability to do M&A deals through our partnership with external firm Unity Group. We are able to keep all of the cost of sourcing, due diligence and acquisition costs off of the profit & loss statement of The Marketing Group, which enables us to pay for all our transactions in shares at a much lower multiple than our own stock trades at. This has enabled us to do 4 major deals in our first 10 weeks after listing, going from 4 companies at 1.5 million Euros of EBITDA to 17 companies and over 11 million Euros of EBITDA, and that really is only the very beginning of our journey.

The Marketing Group was listed on Nasdaq First North in June this year and the share was oversubscribed by 314%. Where you surprised by this excellent reception and what has it meant for you?

We were of course very pleased with the oversubscription, and even more pleased with the way that ordinary investors appreciated the model and gave us incredible volumes and great share price appreciation.

Walk us through what has happened within The Marketing Group during the last couple of months since the listing.

Initially the stock rose from 1 to 1.85 Euros and at that point we completed our first acquisition. As our price increased we completed further acquisitions and all the acquisitions were agreed at a considerable discount to our trading P/E-multiple. So that even though we have created new shares each time the concentrating effect of those acquisitions has meant our EBITDA per share (EPS) has gone from 10 Eurocents at the time of the IPO to 35.45 Eurocents at the time of writing, putting us squarely in the top marketing services companies globally.

The key to this is that we can do so much more, our model is so scalable that we so no reason to stop until we are the number 1 globally.

Please make a short comment on The Marketing Groups latest interim report.

Our latest interim report was for the first half of 2016, then we were still 4 companies with 1.55 million Euros of EBITDA and not the 17 companies and 11 million Euros of EBITDA we now represent. We also included a pro forma of H1 as if it included the companies at that time as an illustration, but it is quite hard to paint a picture of the group that is growing so fast just using the rear view mirror of the quarterly reports. In one transaction in July we doubled the size of the company, how do you value a company that can double in a month? The key to understand is that the whole management team is focused on delivering strong fundamental value. This means more profitable debt free companies, more diversification by country, product and currency and more EBITDA for less shares and we will continue to do these deals regularly and keep driving those fundamentals. The founders board are 100% focused on customer value, they bring award winning services to some of the largest companies in the world and because they now have a peer group of outstanding companies to work with we believe that future synergies in both costs reduction and margin improvement and new sales opportunities will have a huge impact on the profitability going forwards.

What is your favourite key figure and why?

Well the share price has made us the best performing Nasdaq share of the year, which of course is a source of pride.

What are the criteria you are looking for when incorporating new businesses into The Marketing Group?

They have to be profitable, debt free, run by a leader in their field, have blue chip clients and they have to pass our non executive board and our executive board’s approval as well as go through stringent financial audit and legal and executive due diligence. It is quite a gruelling process for a new company, but one that prepares them well for life as a public company.

How many companies do you looking for to add into the Group?

We have a control structure that allows the joining founders to control the direction of the group and as it stands we have no plans to stop. We have a meeting in September with all the founders together in Singapore where the key discussions will be how to increase sales and work together, how to leverage each other better to reduce cost and improve profits, and of course what is the plan for 2017 in terms of acquisitions. Speaking purely as the Chairman, my desire is to keep going until we are the biggest player. We have made significant headway so far and we really feel that there is nothing really holding us back from going all the way. The market leader has 2,600 subsidiary companies, so that might be a nice target.

Why is buying shares in The Marketing Group a good investment?

I myself am an avid investor, and I own nothing else in my portfolio that combines the solid fundamental value of being profitable, debt free, with strong clients and good diversification and combines these with such a high level of growth. And this is not growth that comes with the traditional growing pains of say a tech company, this is predictable reliable growth (because it is acquired) and it is already serviceable within the organisation so no scaling issues. This is a company that can (and has) double in a single deal and yet has a solid foundation all the time. I don’t think that exists in many other places.

What is your long term vision for The Marketing Group?

My vision is to create the market leader in the marketing services sector, but we are an organisation built by entrepreneurs for entrepreneurs and so they will also guide the size and shape of the organisation in the future. It has been my great pleasure to have empowered so many entrepreneurs and retail investors through this project, and I would love to just continue to do that.

By bringing together best in class, entrepreneurial, marketing companies from around the world we are better able to serve our end clients who have dynamic businesses and need access to great talent in multiple territories across multiple disciplines in order to help them serve their own customer bases better.

As an addition, I have had at least 5 messages on Twitter from people who were able to quit their jobs thanks to their investment with us, if nothing else this is an awesome achievement.

“As a champion for growth and ambition, Nasdaq congratulates the continued success of The Marketing Group after its successful IPO on First North,” said Nelson Griggs, Executive Vice President of Listings Services at Nasdaq. “The Marketing Group is among the many global companies listed on Nasdaq First North that have gone on to grow, innovate, and deliver great returns for their investors. Nasdaq is proud to be the listing partner of The Marketing Group and look forward to its continued growth in the future.”

References:

 

Image: TMG and our Subsidiaries post our recent acquisition of Vodrum Group Ltd

 



Senast uppdaterad: 2016-08-28 17:53:06

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