The acquisitive digital marketing company is making progress with its cross-selling initiatives, and reported in its half-year results that eight clients are now served by two or more companies within the group, and those clients generated 23% of the revenues in the first half of the year.
The longest serving agencies within the group – agenda21 and MMT Digital – notched up year-on-year revenue rises of 21% and 44% respectively, and while its Kameleon content agency made a loss in the first half, partly as a result of a lull in activity as a result of the uncertainty caused by the General Election, it is expected to return to profit in the second half.
Net revenue for the group rose to £8.3mln from £3.3mln in the first half of the previous year, while billings rose to £16.0mln from £14.7mln.
More than 85% of forecast 2017 revenue is billed or confirmed, Be Heard said.
Adjusted operating profit before central group costs are factored in rose to £1.2mln from £0.7mln the previous year.
The group is investing heavily to support its growth ambitions, and the first half of the year saw administrative expenses more than double to £11.35mln from £5.47mln, which contributed to a deepening of the loss before tax to £3.03mln from £2.18mln the previous year.
Current trading is strong, the company said, with additional assignments from existing clients, such as Axelos, ComparetheMarket, Hodder, Unilever and Vodafone, while new clients, such as Autotrader and Pittsburgh Paint Group, have signed up.
"Current visibility on revenues and progress underpins the board's confidence that the group will deliver full year results in line with market expectations and strong run-rate profitability by the year end,” said Peter Scott, executive chairman of Be Heard.
“We expect performance in the second half of the year to outperform the first half, with new business wins feeding through, increasing cross-fertilisation and the rollout of new proprietary products and services such as Content Compass and Trend Rider,” Scott added.
“As expected, EBITDA [underlying earnings] was curtailed in the half to £1.2m due to continued investment across the business in addition to headwinds at Kameleon. We maintain our 2017 revenue forecast and view our 2018 estimate as conservative, though trim 2017 PBT/EPS to £2.0m/0.22p (£2.3m/0.25p) reflecting increased investment,” said Numis Securities, which rates the shares a ‘buy’.
The consensus forecast for profit before tax prior to this morning’s results announcement was £2.17mln, while analysts had 0.23p pencilled in for earnings per share.
“We believe BeHeard has encouraging momentum and continue to view the shares as undervalued at current levels,” the broker said.