QMS Media Limited

Continued to deliver on its Operational targets, with solid revenue growth: QMS Media Limited (ASX: QMS) is a small-cap Australia-based outdoor media company with the market capitalisation of circa $248.25 Mn as of 5 June 2019. It is primarily involved in the provision of Out-of-Home advertising and media servicing over a portfolio of owned and represented digital and static billboards, street furniture and transit media across Australia and overseas. On 23^rd May 2019, the company released its AGM presentation in which key financial metrics were discussed. The company mentioned that they have moved from a financial year reporting period to a calendar year end reporting period, in order to streamline the reporting periods across all QMS entities and to align with industry standard. Resultantly, the company reported its six-month period ended 31 December 2018 (or 2HCY18) results with total statutory group revenue growth of 9% to $107 Mn as compared to the prior corresponding period. On the business segmental front, QMS Australia had outperformed the market through quality. QMS Australia reported revenue and underlying EBITDA of $66.3 Mn and $20.3 Mn, respectively in the six months to December 2018. The Roadside billboard revenue witnessed a rise of 13% in 2HCY18.Currently, it has 110 landmark digital billboards across Australia.

While the QMS New Zealand is positioning the business for growth, it had reported revenue and underlying EBITDA of $28.2 Mn and $5.8 Mn, respectively. Its digital revenue represents 59% of total media revenue. Further, the companypointed out that robust financial results represent its ability to effectively manage changing sector dynamics to drive value and growth.


Group Financial Performance (Source: Company Reports)
 
What to Expect from QMS: The company’s defined business segments differentiate QMS as an attractive value proposition for future growth. The company stated that the out of home industry continues to be leading growth sector within the media landscape and strong business in QMS Australia, happens to be well positioned for growth.It is focused on quality and audience engagement so that it can continue to deliver revenue and earnings growth. Additionally, it had also provided the EBITDA guidance for CY19 in the range of $60Mn - $62Mn.

Stock Recommendation: QMS Media Limited is delivering results on its strategic plan throughout its business segments, which has been underpinned by its quality digital portfolio and proprietary data and analytics platform.When it comes to the performance of financial metrics, it had shown satisfying numbers. The current ratio of the company stood at 3.26x in 2HCY18, showing a better liquidity position to address its short-term obligation. On the stock performance front, it had witnessed a rise of 8.57% in the time span of one-month. However, in the past six months, it witnessed a fall of -15.56%, which reflects that the stock is quite volatile. Currently, the stock is trading close to its 52-week low price of $0.660 with reasonable PE multiple of 13.57x, indication a decent opportunity for accumulation. Based on the foregoing and decent outlook along with current trading level, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.770 (up 1.316% on 5 June 2019).

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