Mood Media’s (TSX:MM) fourth quarter results show that its turnaround is in the hands of a management team that is executing with “military like” precision, says Euro Pacific Canada analyst Rob Goff.
On Thursday after market, Mood Media posted its fourth quarter and fiscal 2014 results. In Q4, the company posted EBITDA of $28.9-million on revenue of $127.1-million.
“The enhancements to profitability from our comprehensive operational and efficiency program clearly showed through in our financial results in the fourth quarter and second half of the year as we expected and outlined earlier in 2014,” said CEO Steve Richard. “We concluded our wave two and three initiatives and are embarking upon wave four with an expectation of a further $4- to $5-million in annualized savings to be produced in 2015. Beyond the numbers, the operational and efficiency program is fundamentally reshaping the foundation of our operations and providing streamlined systems to enable growth. We are pleased with the revenue development initiatives we have implemented, including the launch of new solutions, more active cross-selling activities, local sales channel development, and progress with new partners for distribution and solutions.
Goff says the quarter came in slightly ahead of his expectations, despite headwinds from things like foreign exchange. He said the 2014 fiscal year “builds credibility” for the company with investors, and says that although his current target on the company does not include the potential for expansion, he is not ruling that possibility out.
“…we consider Mood’s potential to form strategic partnerships to expand geographically or increase its content and distribution capabilities. Successful execution on strategic initiatives could support significantly more aggressive forecasts. We characterize our forecasts as baseline leaving upside potential,” said the analyst.
In a research update to clients Friday, Goff reiterated his “Speculative Buy” rating on Mood Media, but raised his one year target on the stock from $0.75 to $0.80, implying a return of 35.6% at the time of publication.