Ebiquity - Margin boost from digital media solutions

Ebiquity’s trading update shows revenues are in line with our forecasts, but with a much better operating profit performance at £4.7m versus £4.1m. This reflects strong progress made in its newer (higher margin) digital media solutions and prudent cost management, accelerating the timing of modelled margin recovery. It has also translated into faster improvement in the balance sheet, with year-end net debt of £4.8m, against our forecast £8.7m. The group has made a small acquisition in Canada, extending North American capability. The shares have performed very strongly over the last year, yet the rating remains attractive.