Centaur releases trading update and new 2023 targets

As reported by Centaur Media:

The Board is pleased to report that it achieved the revenue, profit and cash performance expected at the time of its last trading update in October.

Despite the severe impact of COVID-19, the Group's overall performance continues to be resilient and, as the result of clear and decisive actions undertaken, trading has started to improve gradually. This has given the Board the confidence to provide new targets for its Margin Acceleration Plan, previously known as MAP22. Under Margin Acceleration Plan 2023 (“MAP23”), Centaur is focused on raising group EBITDA margins to 23% by 2023 while increasing revenue to at least £45m, in line with the strategy outlined below.

Trading Update

Centaur expects to report revenues from continuing operations of at least £32m for the year ended 31 December 2020, in line with the full year outlook provided on 28 October. The Group’s adjusted EBITDA margin is expected to be slightly ahead of our 10% target. Group underlying revenue from continuing operations, which excludes MarketMakers, the telemarketing business that was closed in August, is 16% down on the prior year, reflecting the severe impact of the pandemic on Centaur’s customers and its events.

Trading in the final quarter was modestly ahead of management expectations at both Xeim, our business unit serving the marketing sector, and The Lawyer. The drop in year-on-year revenue in the final quarter largely reflects the change of the Festival of Marketing from a physical to an online format which saw an improvement in gross profit margin despite lower turnover. Excluding the impact of events, revenues in the final quarter were flat year-on-year. Growth in revenue from Mini MBA, our online marketing course, continues to outperform expectations, offsetting COVID-related reductions in some of our premium content and marketing services.

Through a focus on prudent financial management and continuing tight control of costs, Centaur ended the year with a cash balance of £8.3m at 31 December 2020. This is after paying £1.2m in exceptional costs in H2, including those related to the closure of MarketMakers.

MAP23: EBITDA margins to 23% by 2023 while increasing revenue to at least £45m

The current momentum in the business has provided the Board with sufficient confidence to review and update its strategy to drive organic revenue and profit growth over the next three years. The revenue growth, combined with a relatively fixed cost base, will increase operational leverage within Centaur and deliver year-on-year improvements to profit margins. The key drivers of revenue growth during the period of MAP23 are expected to come from our “Flagship 4” brands, which will be a priority for investment and resource allocation. The Flagship 4 comprises:

• Econsultancy – Our platform that accelerates the performance of customers’ marketing and ecommerce through digital marketing transformation delivered as online training, insight and essential information.
• Influencer Intelligence – The market-leading data intelligence search and measurement platform for influencer and talent-led marketing campaigns, providing data-driven information, tools and proprietary analysis. The influencer marketing industry is forecast to be worth more than US$15 billion in 2022, according to Mediakix data.
• Mini MBA – Our online MBA-level course in marketing developed under the Marketing Week brand.
• The Lawyer – The most trusted brand for the UK legal profession and a leading provider of intelligence to the global legal market.

These brands have demonstrated their resilience through the pandemic. Econsultancy and Mini MBA have continued to secure significant new contracts from blue-chip clients. Renewals at The Lawyer were also encouraging, highlighting its value to national and international law firms, and its virtual events were well-received. Influencer Intelligence has seen a recovery in its renewal rates during the second half after the initial impact of the pandemic. Customer engagement and usage have improved for each of the Flagship 4 brands.

The Group’s wider portfolio of core brands, including Marketing Week, the Festival of Marketing, Creative Review, Really B2B and Xeim Labs, will continue to play an important role in creating opportunities for Centaur by demonstrating the depth of our business intelligence and also the understanding of and service to our customers.

The Company plans to announce its results for the year ended 31 December 2020 on 17 March 2021.

Swag Mukerji, Chief Executive Officer, commented: “2020 was a difficult year for Centaur and its customers. I am pleased by the resilience and agility the Group has shown as well as the excellent commitment demonstrated by our people. Despite the impact of the pandemic, we ended the year well with trading and margin ahead of the expectations outlined by the Board in October. While uncertainty remains, our strong balance sheet and growing momentum give me confidence that we have the strategy and resources in place to achieve organic growth and increase our EBITDA margin substantially, with a target of 23% in 2023 as part of our MAP23 plan.”