Companies: IMSG    TMMG    TWE   

London’s marketing services stars will be familiar to many readers – the likes of Creston and Media Square sport merry bands of City followers. However, investors may be less familiar with three emerging AIM players with differing angles on growth.

Iain Ferguson, chief executive of The Mission Marketing Group, tells me his acquisitive strategy is ‘about location, with a focus on big businesses that aren’t London-centric or TV-centric’. The ambitious Scot plans to build the first ‘regional super-agency’ with the help of key marketing service executives including Tory chairman Francis Maude.

Ferguson floated The Mission in April, at the same time acquiring Bray Leino, a deal that created the UK’s third biggest regional agency. Ferguson is scouting for other regionally based agencies, although he vows not to overpay.

Regional agencies have lower costs, and therefore higher margins, than London counterparts and The Mission should benefit from a rising proportion of the marketing budget being allocated to regional players. This strategy attracted strong support from institutions suffering from a certain degree of marketing services overkill in the capital.

Before acquisitions, analysts think the company should make pre-tax profits of £2.1 million from £35.1 million sales this year, ahead of £4.8 million from £58.3 million next year. Predicted earnings of 13.4p for ‘07 place the 121p shares on a budget multiple of nine times. I urge readers to investigate further.

Thain plays emerging markets game

Greg Thain is the confident founder, chief executive and chairman of International Marketing & Sales Group (IMSG), an emerging markets-focused venture servicing clients in Russia, Turkey, Ukraine and Kazakhstan.

Thain brought IMSG to market in December another float that institutions warmed to, and we met as he unveiled the acquisition of a 66 per cent slug of Indian marketing star Brainreserve. Trading as Candid Marketing, this profitable venture provides sales promotion, trade marketing and event marketing services in India for Pepsi and Motorola among others.

Thain hints that Candid could be the first of further moves into India, where growth prospects are immense.

More recent news flow has also intrigued, with IMSG acquiring a business training simulation system called Storewars – which is used by heavy-hitters like Nestlé and Unilever – and unveiling a joint venture to establish a digital advertising sales business serving digital publishers and advertisers in emerging markets.

2005 was an annus mirabilis, with turnover lifted 110 per cent and profits spiralling 164 per cent north to US$4.8 million. Investors might expect a surge to $7.1 million this year. I believe the recent drop in the share price from a post-float summit of 255p back to the 190p placing price level presents a terrific buying opportunity for investors looking to play the emerging markets game.

Lancaster’s Twenty vision

Also worth keeping an eye on, though more speculative until further trading details are out, is ‘data-centric’ play Twenty, steered by chief executive Ian Lancaster, best known (to date) as the founder of Virgin Cars. Twenty moved up from OFEX in April with the £10.5 million reverse acquisition of Dataforce, a deal marking its first step towards becoming a ‘customer intelligence centric marketing services group’.

Expect Lancaster to use Dataforce as a springboard to build his ‘data focused’ multi-channel marketing services star. I have gleaned that the business provides customer relationship management solutions, as well as analytical data and database services, to clients including Heinz, Ladbrokes and Daimler Chrysler, ‘with no single one representing more than ten per cent of turnover’. Looking for healthy growth in 2006, and assuring me ‘bolt-on deals are high on the list of priorities’, Lancaster could soon flush the current 15.75p share price into the history books.