Public relations specialist Huntsworth is making progress with its strategy of becoming a global agency but it is taking longer than expected to feed through to revenue growth, and is now chipping into margins. Chief executive Peter Chadlington says margins will stabilise in the second half, and added that Huntsworth is still expecting 7 per cent revenue growth in the full year.
Longer procurement processes have meant that Huntsworth has had to commit resources to projects that have yet to take off and this squeezed operating margins from 20.6 per cent to 17.8 per cent. These projects are expected to come onstream in the second half of the year, and chief executive Peter Chadlington assures that margins will stabilise over the year, and will return to "more normal levels" in 2012.
Divisionally, Huntsworth Health's revenues rose 2.1 per cent to £25.7m, while Grayling - which accounts for almost half of group sales - recorded sales growth of 2.6 per cent to £43m. Niche PR business Red grew sales by 1.8 per cent too, all of which compensated for a 2.5 per cent contraction in revenues from Citigate.
Reassuringly, 88 per cent of full-year revenues are already committed.
Analysts at Peel Hunt are expecting full-year pre-tax profits of £28.4m, giving EPS 9p (2010: £27.1m/8.5p).
HUNTSWORTH (HNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 60p | MARKET VALUE: | £146.6m | |
| TOUCH: | 57.75-60p | 12-MONTH HIGH: | 87p | LOW: 58p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 85p* | NET DEBT: | 35% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 112 | 9.58 | 3.0 | 0.9 |
| 2011 | 108 | 6.20 | 2.2 | 1.0 |
| % change | - | - | - | +11 |
Ex-div: 5 Oct Payment: 11 Nov *Includes intangible assets of £306.7m, or 125p per share | ||||
