Listed marketing companies fair 'poorly' in 'Vulnerability test'
Vulnerability tests have rated Progressive Digital Media Group, Aegis, Adventis Group and Media Square poorly, with both apparently having ‘massive levels of debt’ in comparison with funds being provided by shareholders.
The tests, conducted by Marketing Services Financial Intelligence (MSFI), examined UK public marketing companies, with Media Square, Aegis, Progressive and Adventis having a ‘vulnterability ratio’ worse than 2:1.
The tests also found that 40% of the publicly listed marketing groups scored a ratio of 1.5:1 or more.
MSFI said that most of Media Square’s debt came from its previous ‘ambitious’ acquisition strategy, which left the company owing £15.3m to the banks as of February this year.
This meant that the company’s ‘vulnerability ratio’ was 23.4:1, while Progressive Media Group has loaned £18.4m, with £9.8m repayable on demand, although MSFI says that main shareholder Mike Danson has added an undertaking that a demand repayment will not be made for at least one year from the last balance sheet.