Touch Group plc, the AIM quoted multimedia advertising provider is trading at 30 per cent of its fair value, according to research published today by Equity Development. A conservative valuation for the company, based on sector EV/EBITDA is around £25m compared to today’s £8.2m.
The ED research also highlights the rapid growth in 2004 of Touch Local, the group’s local business and services directory websites covering 114 cities and large conurbations throughout the UK. These sites have enjoyed a sustained and impressive rise in both consumer traffic – now more than 4m unique visits a month - and revenues in the last three quarters of the year.
The research forecasts that Touch will make a modest operating profit for 2005 and will then grow aggressively with the margin improving from just under two per cent next year to 11 per cent in 2006.
ED concludes that Touch is “well positioned to perform strongly in the UK and international multimedia markets with a product that has been developed to leadership quality”.
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