Media monitoring company iSentia Group Ltd (ASX: ISD) listed in June this year at an offer price of $2.04 per share which gave the group a market capitalisation of $408 million.
It's been an exceptionally profitable purchase for shareholders who got in on the float with the stock never trading as low as its initial public offer (IPO) price and producing close to a 45% gain with the shares currently trading at $2.95. That's a massive outperformance against the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past five-and-a-half months – the index has lost 2.2% over that period.
The inaugural annual general meeting (AGM) for the firm as a listed company offers a timely opportunity to review how the business has been tracking.
- Financial year (FY) 2014 saw iSentia beat its prospectus forecasts for both revenue and net profit after tax but before amortisation (NPATA), with the group reporting pro-forma revenue of $110.6 million and NPATA of $19 million.
- The chairman reaffirmed the company's FY 2015 guidance (as per the prospectus) for revenue of $124.4 million, which represents 12% year-on-year growth and NPATA of $27.2 million which represents 43.2% growth.
- A highlight of the FY 2014 results was the 26.1% revenue growth in 'value added services' (VAS), which the group achieved thanks to enhanced services such as social media monitoring, consultancy, insight reports and database services.
- The outlook for future growth opportunities is positive not only thanks to further cross-selling opportunities in VAS but also from increased penetration of Asian markets which currently represent 18.5% of group revenue.
Valuation
Based on iSentia's guidance the stock is trading on a price-to-earnings ratio of approximately 21x. That's a hefty multiple and would require investors to be confident that further strong growth was likely to flow through in FY 2016 and beyond.