Ebiquity dives after profit warning

22nd Nov 2018 11:12

(Sharecast News) - Marketing group Ebiquity dropped sharply on Thursday after warning investors that its annual operating profit will come in "materially below" current market expectations.The independent marketing and media consultancy outfit said this comes as a result of a slowdown in growth from its Advertising Intelligence business, continued underperformance of the US Digital Analytics practice and delays in closing recent Media practice opportunities in Germany.However, following approval from the CMA for the sale of Advertising Intelligence to Nielsen Media Research, Ebiquity's net debt position will be materially improved following the receipt of proceeds now anticipated to be around the end of the year.The AIM traded company said disposal of the underperforming business unit would "simplify" the group and allow for focus on core activities.The core media, analytics and tech practices yielded overall revenue growth in line with expectations at approximately 8% following a strong performance in the UK & Ireland and French markets.New business wins in the second half of the year include a multi-year assignment from VW and a global analytics partnership with Nestle, though continued investment in the core business has further hampered profits in the short term.Analysts from Shore Capital said: "Trading update highlights continued weakness in the business to be exited, and despite good underlying growth in the continuing core businesses, investment implies near term profit pressure. We see the business as better focused post Ad Intelligence exit and while we expect share price pressure today, we see good value here."Ebiquity's shares were down 19.70% at 53.00p at 0946 GMT.