The Mission Marketing Group (TMMG:AIM) is up 8.8% to 37.75p as a first half trading update reveals double-digit growth and positive cash flow.

The PR and marketing outfit’s shares has suffered a post-Brexit hangover and are still below the level they were at before the referendum despite today’s healthy rise. House broker FinnCap notes it trades at ‘a significant discount to sector peers’. Based on consensus forecasts the shares are on a 2016 price to earnings ratio of 5.6.

The track record since executive chairman David Morgan and finance director Peter Fitzwilliam took over in 2010 is pretty good. The old management had overpaid for acquisitions at the top of the previous cycle and put the balance sheet in a perilous state.

Despite continuing to invest in M&A, the company has reduced its net debt from £20.1 million six years ago to £9.4 million. Its borrowings fell £1.5 million in the first six months of 2016 despite allocating £2.6 million to acquisition payments.

The company is traditionally weighted to the second half but says revenue and profit have shown double-digit increases year-on-year in the first half thanks to a combination of organic and acquisitive growth.

FinnCap analyst Mark Paddon, who reiterates a 60p price target, says: ‘The group is clearly continuing to trade well and generate cash, and there remains scope for further acquisitions in due course.’

Issue Date: 21 Jul 2016