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Olympic effort from Chime

RESULTS: Chime has demonstrated good underlying growth following after the sale of Bell Pottinger PR operation
August 29, 2012

Selling its Bell Pottinger public relations (PR) arm appears to have been a smart move by Chime Communications - judging by these better-than-expected results. Olympics and Paralympics work has been lucrative and, with a string of high-profile events to come, the potential of its fast-growing sports marketing business is clear.

IC TIP: Buy at 200p

Strip-out Bell Pottinger and operating profit jumped 45 per cent to £11.3m, driven largely by the high margin sports and entertainment division. There, managing hospitality and event presentation for London 2012 meant profit grew over two-thirds to £7.5m. The British Lions tour of Australia next year and Football World Cup in 2014 should chip in significantly, too, and the Olympics in Brazil two years later threatens to generate more sponsorship revenue than London. Growing overseas, particularly in emerging markets, is important as well and there’s plenty of fire-power for acquisitions and new offices. Management also has high hopes for its fledging healthcare PR business - busy establishing a presence in Europe - and for advertising, although investment in new offices and expensive pitches meant profits at the division suffered in the half

Peel Hunt expects full-year adjusted pre-tax profit of £26.5m, giving adjusted EPS of 22.7p (2011: £31.7m/27.3p).

CHIME COMMUNICATIONS (CHW)

ORD PRICE:200pMARKET VALUE:£163.8m
TOUCH:197-200p12-MONTH HIGH:255pLow:   143p  
DIVIDEND YIELD:3.3%PE RATIO:12
NET ASSET VALUE:205p*NET CASH:£21.8m

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201113411.411.02.08
20121686.728.192.10
% change+25-41-26+1

Ex-div: 19 Sep

Payment: 12 Oct

*Includes intangible assets of £192m, or 235p per share