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viewTremor International Ltd

Tremor targets multi-screen revolution in advertising

Snapshot

The firm develops advertising technology through three main business arms, Tremor Video, RhythmOne and Taptica

Tremor International Ltd -

Quick facts: Tremor International Ltd

Price: 137.5 GBX

AIM:TRMR
Market: AIM
Market Cap: £168.07 m
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  • Advertising technology group

  • Offers digital advertising solutions through three divisions

  • Works with brands including Amazon, Disney and Twitter

What Tremor does:

Tremor International Ltd (LON:TRMR) is an advertising technology firm that operates in more than 60 countries.

The firm delivers its services across three divisions;

Tremor Video: Video advertising company with TV and second-screen solutions. Helps advertisers use video technology to deliver their strategies across several platforms including TV and social media

RhythmOne: Specialises in multiscreen advertising, a method of having advertising across multiple devices such as TVs, computers and mobiles simultaneously as viewers switch between devices. Recently ranked first in Seller Trust advertising index

Taptica: A mobile advertising platform that also uses big data technology to help brands target consumers

How it’s doing:

Revenues in the half-year to June 2019 rose slightly to US$144,9mln as the first contribution from RhythmOne offset further weakness at the Taptica arm.

Underlying profits were also little changed at US$21.4mln, though heavier R&D and admin outlays meant a pre-tax loss of US$3.3mln ($US$14.3mln).

Cash generation was strong again and in spite of the heavy restructuring, the balance at the half-year rose to US$66.5mln 

Inflexion points:

  • In October, Tremor launched new and improved self-service tools for video advertisers on Tremor Video which will be “an important growth engine” for the company's future
  • Tremor announced the launch of its Connected TV (CTV) advertising offering in July, in what it said was an “important milestone” for the group. The company said CTV would allow advertisers to deliver videos across all screens in real-time and reach TV audiences on second-screen devices such as smartphones and tablets
  • Costs savings from the RhythmOne deal to start coming through from now on
  • Cash generation continues to look very impressive

What the boss says – CEO Ofer Druker

Commenting on the launch of CTV, Tremor’s chief executive Ofer Druker said the new service would create a “compelling platform” for brands to realise the value of CTV as a digital advertising segment that demonstrated “robust growth”.

What the broker says:

Following the interim results in September, house finncap wrote: "We are guided to ease FY forecasts but we note Tremor has achieved great efficiencies in Branding to maintain group blended margin despite the reduction in high-margin Performance sales.

Looking ahead, Tremor has made an excellent strategic move into the booming video market, with its exchange up and running. It is well funded, streamlined and future new business on the platform should drop straight through to profit.

The broker’s target price is 550p compared to a market price of 147.5p.

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