Centaur Media — Business review underway

Centaur Media (LSE: CAU)

Last close As at 18/03/2025

GBP0.27

0.00 (0.00%)

Market capitalisation

GBP41m

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Research: TMT

Centaur Media — Business review underway

Centaur Media’s full year results are broadly in line with January’s trading update, with revenue from continuing operations down 6% on the prior year. Adjusted EBITDA came in slightly better than anticipated at £5.9m (guidance was £5.6m). Key brands The Lawyer and MiniMBA both performed well, growing revenues by 7% and 5% respectively, while other brands supplying the marketing services industry were more affected by broader macroeconomic factors. A £12m impairment charge has been taken against goodwill in the group’s marketing services activities. The group’s executive chairman is currently conducting a review of the business brands and units, and we would expect to see preliminary indications of conclusions by the time of the half-year results.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

Centaur Media_resized

Media

FY24 results

19 March 2025

Price 27.00p
Market cap £41m

Net cash as at 31 December 2024

£8.9m

Shares in issue

151.4m
Code CAU
Primary exchange LSE
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 0.0 17.4 (30.8)
52-week high/low 50.5p 21.0p

Business description

Centaur Media is an international provider of business intelligence, learning and specialist consultancy. Its Xeim and The Lawyer business units serve the marketing and legal sectors respectively and offer customers a wide range of products and services targeted at helping them add value.

Next events

AGM

8 May 2025

Analyst

Fiona Orford-Williams
+44 (0)20 3077 5700

Centaur Media is a research client of Edison Investment Research Limited

Note: PBT and EPS are adjusted, excluding amortisation of acquired intangibles, exceptional items and share-based payments, and EPS are fully diluted. DPS excludes special dividend paid for FY23.

Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
12/23 37.3 7.6 4.16 1.80 6.5 6.7
12/24 35.1 3.9 1.90 1.80 14.2 6.7
12/25e 36.2 4.0 1.97 1.80 13.7 6.7
12/26e 39.0 5.2 2.55 1.80 10.6 6.7

Trust and authority

Centaur’s core competencies are in providing business intelligence, learning and specialist consultancy. To maintain its market position, it has to back those attributes up with relevant, accurate and timely insight. This is paying off successfully at The Lawyer (25% of FY24 group revenue) and with MiniMBA (FY24: 30%), although there is always more to do to optimise the offerings. The underlying trading backdrop for marketing services remains difficult, and this has shown through particularly at Econsultancy, where revenues were down 21% on FY23, and at Oystercatchers, where there were fewer agency pitches in the period after a strong prior period. The priority for FY25 at Econsultancy is to drive both advisory and learning subscription services, leveraging its reserves of data and expertise. Boosting levels of subscription income across the group is a key objective.

Cash resource gives time for decision-making

Centaur ended the year with net cash of £8.9m (including short-term deposits) and has lease debt only (FY24: £1.0m). As intended, the recommended dividend payout has been held at 1.8p, providing a premium yield. Capital expenditure requirements are modest, totalling £1.2m in FY24. This means that the strategic review can be carried out thoroughly, with the objective of maximising shareholder value.

Valuation

Centaur’s share price is 34% down over the last 12 months, reflecting the continuing malaise in UK smaller stock valuations and across the wider media sector, as well as the company-specific issues. The valuation remains well below UK and global peers. Parity across FY24–26 (on P/E and EV/EBITDA) suggests a price of 41.5p, up from 40.6p in January, and well above the current level. Closing that gap will require evidence that the strategic review can deliver value to shareholders.

Marketing services brands most affected by markets

The relative sizes of the marketing services brands have been disclosed for the first time. The two brands highlighted as the most successful and resilient over this last difficult trading period now account for more than half of group revenues.

TIG here represents The Influencer Group, comprising Influencer Intelligence, Fashion & Beauty Monitor and Foresight News, and it is worth noting that the scale here is approaching that of Econsultancy. TIG was also affected by market conditions, with renewal rates dipping from 87% to 78%, although new business was steady. The FY25 focus is on better use of data, with new tools and dashboards to improve usability and promote customer stickiness.

Econsultancy had a particularly difficult year in 2024, reflecting the challenging conditions for its clients, with renewal rates and new business affected by budget constraints. Both advisory services and learning subscription services suffered. In the current year, the focus is set to be on the higher-margin customised programmes and ‘high engagement’ learning in digital marketing and e-commerce, with improvements to the website and online learning hubs.

MiniMBA continues to be an engine for growth, with high levels of approval from alumni. Investment in courses to make sure that they are up to date and relevant is crucial. The focus for the current year is on attracting a higher number of corporate customers of a scale that can continue to push cohorts of learners through the courses on an annual basis. This includes a greater emphasis on international markets.

The Lawyer had a good year, lifting premium content revenues by 11% and with a corporate subscription renewal rate of 111% as existing customers took a wider range of services and content. The brand has extensive resources of data and the challenge will be to tailor these into productised and customised ‘must-have’ services for law firms and the wider legal market.

Forecasts broadly unchanged

We have only made minor adjustments to our forecasts in light of the publication of the full FY24 figures, as market conditions are little changed from January when we last published. For FY25, we have edged up our adjusted EBITDA figure from £5.9m to £6.1m to reflect the slight uplift in FY24 margin over previous assumptions, leaving our FY26 number, which assumed an improvement in margin, unchanged. We now model a year-end net cash position of £8.9m, up from £8.6m, and of £10.4m for end FY26, up from £9.8m, reflecting lower cash tax in FY25 as earlier losses are utilised and slightly better cash conversion in FY26.

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