Be Heard Group plc (LON:BHRD), the digital marketing services group, has issued the following trading update for the six months ending 30 June 2017.
The Board remains confident in the Group’s outlook for the full year.
Highlights
· Net revenue growth of over 155 per cent to £8.4million (2016: £3.3 million)
· Very strong organic growth at agenda21 and MMT Digital (‘MMT’), including a high volume of new business wins
· Kameleon impacted by suspension of activity by two clients, and also Government work following announcement of General Election, but now starting to recover
· Strong new business performance with 25 new client wins including Addison Lee, Brakes Brothers, The Forestry Commission, Gresham House, GSK, Save the Children, Sovereign, Unilever Food Solutions and Vodafone Enterprise
· Additional work from key existing clients including Casumo, ComparetheMarket, SSE, Unilever and Vodafone
· Investment in additional staff and facilities at MMT and group-level hires to facilitate and promote further growth
· Six clients now served by two or more Be Heard Group companies representing 23 per cent of Group net revenue in the first half
· Strong pipeline of work from existing and new clients for the second half of the year, with 73 per cent of current forecast revenue billed or committed
The Group’s net revenue grew by 155 percent to £8.4 million (H1 2016: £3.3 million) as a result of the impact of a full six months’ contribution from MMT and Kameleon, four months’ contribution from Freemavens, which was acquired in February 2017 and recent new business wins.
Net revenue at MMT and agenda21 rose by an encouraging 44 per cent and 21 per cent respectively including additional business from existing clients and significant new client wins. The scale of new business success at MMT called for investment in additional employees and facilities ahead of plan, leading to an increase in costs to support future contracted work.
Kameleon, the Group’s content agency, experienced a slowdown due to the suspension of all Government work following the announcement of the General Election in April, and of activity by two clients. Kameleon has since started to recover, including winning new clients and working with other Group companies to deliver creative content solutions to clients.
The Group has also strengthened its central resource with the appointment of Richard Costa D’Sa as Chief Growth Officer and Andrew Dunderdale as Financial Director. Both appointments represent investment to drive and manage future growth, by focusing on increasing cross-group work.
Notable new client wins in the first half included Addison Lee, Brakes Brothers and Vodafone Enterprise at agenda21; Unilever Food Solutions and GSK at Freemavens; The Forestry Commission, Gresham House, Save The Children, Sovereign and Vodafone Enterprise at MMT; and ACCA, Public Health England and the Society of Petroleum Engineers at Kameleon. Across the Group key existing clients including Casumo, ComparetheMarket, SSE, Unilever and Vodafone also expanded their briefs.
The Group has started broadening relationships with clients by connecting skill sets to follow and deliver against key stages of the digital customer journey. agenda21 extended its relationship with Vodafone by winning the Enterprise Business Unit SEO account and MMT also expanded its Vodafone relationship, which now operates under the Be Heard umbrella contract with Vodafone. Similarly, Be Heard has continued to make progress extending existing relationships with Apetito/Wiltshire Farm Foods, BDO, CitySprint/OntheDot, Essilor, Northumbria Water and Vodafone, now served by two or more companies within the Group. In total, clients served by two or more Be Heard Group companies represented 23 per cent of Group net revenue in the first half.
Despite macro economic and political uncertainties the Group is seeing a strong pipeline of work from existing and new clients for the second half of the year, with 73 per cent of current forecast revenue for 2017 billed or committed. In addition, the Board is encouraged by the increasing number of opportunities for our partner companies to work together to deliver connected solutions for clients, a key element of Be Heard’s growth strategy.
The company is also developing new proprietary products. These include Content Compass, a new tool created by agenda21 to enable companies to optimise and streamline user journeys. Vodafone has publicly credited Content Compass with significantly improving its search visibility and enabling it to deliver more targeted content. We expect to launch a number of other new tools and services in the second half of the year
While the Group is in the early stages of its development, the Board is encouraged by the levels of revenue growth at MMT and agenda21 in particular, and by client cross referral across partner companies and remains confident in the Group’s outlook for the full year.
Gresham House Strategic PLC has a total interest of 10.6% in Be Heard Group PLC correct as of 30 June 2017 month end NAV announcement, released 03 July 2017.
