The Investment Column : Media tiddler strides ahead

The Media Business Group, the smallest of three specialist media buyers listed on the stock market, was floated as a penny stock in August 1995, priced at 3p. After announcing record figures yesterday it reached the dizzy heights of 8p before settling back to 7.5p, up a penny on the day.

Profits rose 42 per cent to pounds 585,000 in the six months to the end of October, including a juicy pounds 224,000 worth of interest earned on its prodigious cash flow. That increase was struck from a 29 per cent rise in sales over the same period in 1995 to pounds 63m. Earnings per share rose 33 per cent to 0.16p and the interim dividend has been raised by 17 per cent to 0.035p.

TMBG's recent client "wins" include Appleyard Group, RAC, Midland Mainline Railways, IKEA, Eastern National Gas and, since the start of the year, Mothercare and Saga's European operations. Channel 5 and digital television offer new territory to exploit, although the growth of satellite and cable television advertising will initially be at the expense of terrestrial television rather than other media.

TMBG opened a Manchester office last September and, with cash still in hand, chairman and chief executive Allan Rich is already talking to potential takeover targets to add research, teleworking and market database services to his portfolio. Stockbrokers Williams de Broe have just been appointed in order to try to interest more institutional shareholders.

They were already forecasting pounds 1.71m for the year to April and earnings per share of 0.47p, figures they plan to revise upwards. Rowan Dartington, however, has more modest earnings expectations of only about 0.38p. At between 15 and 18 times prospective earnings the tightly held shares look high enough.