We are pleased to share a report by Peterhouse on their client SEC Group:
The group provides public relations, advocacy, and integrated communications advice. Its services include brand equity management; financial communication; crisis and reputation management; corporate social responsibility; external and internal relations; lobbying and public affairs; issue management; community relations and political communication. SEC was founded in 1989 and is headquartered in Milan, Italy.
SEC aims to build an entity with global PR network and brand, and the international profile, credibility, geographical footprint and skillset to secure larger, longer term retained relationships with multinational clients.
That kind of global mandate can encompass a broad range of PR services and disciplines, which in management’s experience can equate to larger, longer-term contracts with better revenue scale/quality. This should, in parallel, translate into improved divisional and group margins, EPS and FCF/share.
Acquisition-led growth is at a relatively early stage, and the challenges involved in implementation of recent and prospective purchases is a key sensitivity. Projections do not build in the next phase of acquisitions - a core component of management’s plan for the next two to three years - or any material enhancement from integration of distinct geographies and disciplines.
There is arguably potential for faster growth than indicated below on the back of successful implementation of the growth strategy. As that feeds through to EPS, it may provide capacity for SEC to initiate dividends from 2020e. The shares are tightly held; c 75% is owned by the group’s founder.