Project delays, cost overruns, clients holding back on spending, and investment costs pushed
Following the disposal of the public affairs division Interel last July, the group now has three business operations: Amaze, Interact and The Chase. Amaze pushed turnover ahead from £16.4m to £17.4m, helped by new client wins including Coats and East Coast Mainline, but project overuns and delayed client spend meant underlying operating profit almost halved to £0.8m. Creative design agency The Chase also struggled in the face of significant delays in client projects, with turnover down 24 per cent to £2.9m which in turn decimated profits, although second half trading showed some improvement.
Peel Hunt is forecasting 2012 adjusted pre-tax profits of £1.3m and EPS of 3.9p.
|ORD PRICE:||31p||MARKET VALUE:||£7.5m|
|TOUCH:||29-32p||12-MONTH HIGH:||71p||LOW: 24p|
|DIVIDEND YIELD:||3.2%||PE RATIO:||na|
|NET ASSET VALUE:||67p*||NET DEBT:||9%|
Hasgrove has taken steps to rectify the faults that occurred last year and trading in the new financial year is off to a good start. Net debt is modest, a progressive dividend policy is now in place and if the company delivers on earnings estimates then the shares are only trading on a forward PE ratio of 8. A recovery buy.
Last IC view: Buy, 51p, 7 October 2011.