The end of big contracts, plus the requirement to move earn-out fees from the capital to the income account, meant a big fall in reported profits at media and PR company Chime Communications (CHW). The group had otherwise done well from the increased interest in sports events during the Olympic year, as well as an increase in average fees per client to £91,000 from £84,000. That creates a difficult comparison for sales growth in 2013, which is forecast to be more sedate given the absence of big sporting events.
Reflecting the summer of sport, the sport and entertainment division more than doubled its operating profit to £15.8m, while the operating margin rose to 23.9 per cent from 19.2 per cent. However, there was little evidence of growth at Chime's other main division, advertising and marketing services, with poor economic conditions and higher costs chopping underlying profit there by 38 per cent to £4.4m. However, contract wins towards the end of 2012, including Avis and Capita, should help reverse that trend this year. Moreover, the recently reorganised healthcare segment managed an impressive performance, with new business generating a 44 per cent increase in profits to £2.2m - with the margin soaring to 20.8 per cent from 7.8 per cent.
Broker Investec forecasts pre-tax profits for 2013 of £28.3m, giving EPS of 23.3p (from £25.6m and 21.6p in 2012).
CHIME COMMUNICATIONS (CHW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 247p | MARKET VALUE: | £203m | |
| TOUCH: | 247-248p | 12-MONTH HIGH: | 250p | LOW: 143p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 189p* | NET CASH: | £4.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 112 | 16.3 | 20.2 | 4.72 |
| 2009 | 123 | 18.8 | 22.5 | 5.10 |
| 2010 | 149 | 26.5 | 25.5 | 6.05 |
| 2011 | 286 | 17.8 | 16.2 | 6.58 |
| 2012 | 344 | 2.54 | -1.59 | 7.24 |
| % change | +20 | -86 | - | +10 |
Ex-div: 22 May Payment: 14 Jun *Includes intangible assets of £181m, or 221p a share | ||||
