Public relations firm Huntsworth reported an underlying 9 per cent rise in first-half pre-tax profits to £12m helped by bumper M&A work.
Bigger deals on which it spun its PR magic include Babcock’s £132bn acquisition of VT Group, and the $1.35bn (£870m) purchase of Heritage Oil's Ugandan assets by Tullow Oil in the six months to 30 June. This marked a return to like-for-like revenue growth, albeit limited to 0.4 per cent as the re-branding of its biggest division, Grayling, meant low-margin work was let go. Its £41.8m revenue implies a 4.9 per cent like-for-like fall, although new business worth £5m in the half promises improvement. As does a $3m communications contract with Novartis on the health side, its biggest to date. Elsewhere, expanded remits for Land Rover and Skype show the scope for up-selling existing clients.
This means that Huntsworth's organic revenue growth targets - ambitiously pitched at 7 per cent for next year, against typical rates of 3.5-4 per cent in the past - are within reach. Citigate, The Red Consultancy and Huntsworth Health all made stellar progress towards this, up 4 per cent, 5 per cent and 7 per cent, respectively. Factor in Grayling's continued recovery, and EPS forecasts from broker Numis of 8.5p, rising to 9.1p in 2011, look well supported.
HUNTSWORTH (HNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72p | MARKET VALUE: | £166m | |
| TOUCH: | 72.5-75p | 12-MONTH HIGH: | 89p | LOW: 60p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | NA | |
| NET ASSET VALUE: | 85p* | NET DEBT: | 28% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 100 | 1.46 | 0.10 | 0.75 |
| 2010 | 112 | 9.58 | 3.00 | 0.90 |
| % change | +11 | +558 | +2900 | +20 |
Ex-div: 29 Sep Payment: 5 Nov *Includes intangible assets of £290m, or 126p a share | ||||
