Isentia Group (ISD.ASX)is the leading media intelligence group in the APAC region. We wrote extensively about our turnaround thesis for the business. Unfortunately, this has not played out to our satisfaction so far. To some degree we underestimated the time it has taken to remove costs and, at the same time, bring the software set and new functionalities up to date. During this time, ISD has seen its main Australian competitor, Streem, snipe away at some of its more lucrative government contracts.
Although ISD has continued to retain the majority of its government clients, this has in some instances seen pricing pressure.We got some good news this month in the form of EBITDA guidance of $20-$21m. This includes a $1.3m loss from the North Asian operations which the group is finally exiting. With an underlying EBITDA of $22m and healthy cash generation,ISD is trading on an EV multiple of about 3x.In further good news, the South East Asian division continues to show good growth prospects, (albeit not enough to offset the price pressure at home).We will stick with the turnaround as we firmly believe corporate activity will eventually emerge.
ISD Price at posting:
18.0¢ Sentiment: Hold Disclosure: Held
