Hasgrove on the mend

Project delays, cost overruns, clients holding back on spending, and investment costs pushed Hasgrove deeply into the red last year. And shareholders have been paying a high price with shares in the company more than halving from their peak last July. However, the digital and communications services group has started the new financial year with a clean slate and significantly lower levels of debt. In fact, the share price rose 7 per cent after a confident management doubled the dividend payout. Moreover, business levels in the first quarter of the new year are well up on previous years.

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.

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