Sports marketing and player agency group Essentially is benefiting from the sport of cricket being pulled into a new paradigm by the piles of cash being thrown around in the new Indian Premier League.

Although traditional supporters of the gentlemanly game are up in arms about the brash new league, where teams have names such as the Kolkata Knight Riders, it is good news for London-based Essentially, where Kiwi chief executive Bart Campbell boasts of placing 14 of the 50 foreign players on three-year contracts, including Jacques Kallis, Shivnarine Chanderpaul and Justin Langer. This netted the group a ‘seven-figure’ sum in US dollars, with ongoing player representation of India’s captain Anil ‘Jumbo’ Kumble proving very lucrative as well.

Having entered the cricket world via two acquisitions last summer to supplement and complement its marketing and player representation expertise in Formula 1 and rugby, and enjoying the first full contributions from previous purchases, Essentially’s revenues for calendar year 2007 grew 418% to £9.2m and adjusted pre-tax profits increased 281% to £2.1m. However after amortisation of assets and interest, Essentially made a loss before tax of £107,000, halved from the year before.

Going forward, Campbell says the real run rate of the business can be inferred by the second half pre-tax profit of £1.8m, implying next year’s forecast of £3m might prove conservative. He adds that 60% of the current year’s revenues being already booked makes for ‘great visibility’ and should help protect against a media spending slowdown.

Based on an EPS forecast of 1.7p, Essentially is trading on less than seven times this year's earnings and trading at half the market value it enjoyed two years ago. The company looks fundamentally undervalued.

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Essentially Group	AIM	£14.29m	7.25p	0.00p
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