My recent screen for cheap growing companies highlighted several familiar names, but its real value lies in identifying under-the-radar opportunities. When I find something I've not looked at before, our new briefer Stock Pitch format is perfect for getting to the heart of the investment case. This week, I'm looking at a Super Stock from the list: The Pebble Group.
Disclosure: At the time of publication, I do not hold a position in The Pebble Group.
The Pitch
Pebble (LON:PEBB) is an AIM-listed provider of technology, products and related services to the global promotional products industry. The group started as a management buyout of three businesses from within 4imprint in 2010. It expanded by the acquisition of a distinct but complementary SaaS business, Facilsgroup, in 2018, giving its current corporate structure:
- Brand Addition is a full-service branded merchandise business that designs, sources and delivers promotional products to corporate clients across many different sectors. It operates globally, generating revenues of £107.5m in FY25. The business has retained approximately 90% of its top clients since 2019 and has a typical ten-year relationship with its top 20 clients.
- Facilisgroup is a subscription-based B2B technology platform serving small and medium-sized promotional product distributors in North America. Its proprietary Syncore platform provides digital commerce tools, consolidated buying power, and a community network, with 96% of its revenue recurring in FY25. The platform processed $1.58 billion in Gross Merchandise Value (GMV) in FY25, representing an estimated 6% share of its addressable North American market. Management believes it can double the current partner base to 500 over time.
The company was listed on AIM in 2019, with the proceeds used to repay debt and satisfy obligations arising from the acquisition of Facilsnet, and to provide an exit for pre-IPO shareholders. Management retained around 9% of the shares, with CEO Christopher Lee now holding just over 4%, and CFO Claire Thompson at 2%.
Despite this slightly strange mix of a design and sourcing business, combined with a technology platform, the algorithms rate this as a high-quality stock with a Quality Rank of 95. Strong Value and Momentum Scores mean that this is a Super Stock with an impressive 98 ranking.
The group's FY25 results, released in March, showed revenue of £124.7m, flat on the prior year, but with an increased gross margin and free cash flow…
