The Mission Group strengthens financial strategy with £17.4m sale of April Six

The Mission Group plc (AIM: TMG), a prominent UK-based collective of digital marketing and communications agencies, has announced the sale of April Six Limited and its subsidiary April Six Inc. to Marketbridge, Inc. for a potential total consideration of £17.4 million. This transaction marks a pivotal step in Mission’s financial transformation and sets the stage for renewed shareholder confidence through debt reduction, streamlined operations, and an enhanced capital allocation strategy.

April Six Sale Reflects Strategic Alignment

April Six, known for its expertise in technology and science marketing, operates across the United States and the UK. The agency boasts a blue-chip client portfolio and a strong foothold in the US, its largest growth market. Mission’s board has articulated that transferring ownership of April Six to Marketbridge, a US-headquartered firm, better aligns with April Six’s ambitions and regional opportunities.

The sale agreement includes an upfront payment of £10.5 million, delivered on a cash-free and debt-free basis, adjusted for working capital and associated transaction costs. An additional earn-out of up to £4.2 million, contingent on April Six’s EBITDA performance between December 2024 and February 2025, is scheduled for payment in June 2025.

Fiona Shepherd, April Six’s founder and CEO, will remain with the agency following the sale. However, Shepherd has stepped down from Mission’s board, ending a 14-year tenure during which she played a vital role in the Group’s growth and diversification.

Financial Impact of the Disposal

The sale of April Six represents the culmination of The Mission Group’s Value Restoration Plan (VRP), a comprehensive initiative launched in December 2023 to strengthen the Group’s financial health. Through targeted operational improvements and strategic disposals, Mission has achieved £5 million in annualised cost savings, bolstered profitability, and reduced complexity within its portfolio.

The proceeds from the April Six transaction have been allocated primarily to debt reduction. At the close of 2024, Mission reported net bank debt of £17 million. Following the receipt of £10.5 million from this sale, pro forma net debt stands at a significantly reduced £6.5 million.

Under Mission’s financing agreement with NatWest, the transaction qualifies as a “deleveraging event,” unlocking improved covenant terms, including better leverage and interest coverage ratios. The anticipated earn-out payment in mid-2025 is expected to further enhance these metrics, leaving the Group in a stronger financial position as it enters 2025.

Updated Capital Allocation Policy

As part of its financial restructuring, Mission has unveiled a forward-looking capital allocation strategy. This policy prioritises financial stability, organic growth investments, and shareholder returns. The Group aims to maintain a leverage ratio between net cash and 1.0x EBITDA over the medium term, with flexibility to exceed this threshold when necessary to meet operational demands.

Mission intends to allocate surplus cash towards high-return growth initiatives while returning value to shareholders through dividends and share buybacks. The Group plans to resume paying ordinary dividends in 2026, maintaining a dividend cover ratio of 3x to 4x headline earnings per share.

As an immediate step, Mission has approved an on-market share buyback program of up to £1.5 million, which will begin immediately. Shares repurchased will be held in treasury for potential future use.

A Leaner, Stronger Business Model

David Morgan, Non-Executive Chair of Mission, emphasised that the disposal of April Six underscores the intrinsic value of the Group’s agency portfolio. He noted that while disposals have been necessary to restore financial stability, future shareholder value will be derived from organic growth, operational excellence, and prudent financial management.

Morgan highlighted that Mission enters 2025 with a leaner, more focused structure and a strengthened balance sheet. The board remains committed to delivering exceptional client service and fostering collaboration across its agencies to drive sustainable growth.

A trading update for the year ending 31 December 2024 is expected during the week commencing 20 January 2025, providing further insights into the Group’s operational and financial progress.