As St Ives (SIV) continues its acquisitive realignment towards marketing services and away from a reliance on print, it is encountering increased potential for winning new business across the group. Chief executive Patrick Martell is confident of a continued flow of new business in the second half and beyond. "We're finding that having both parts of the business, print and marketing services, gives credibility to each other, allowing good cross-selling opportunities," he says, pointing to the fact that more than 50 clients pay for services from more than one part of the group.
Marketing services is now the main driver for growth, with revenues up 36 per cent to £31m in the first half and operating profits swelled to 31 per cent of the group total, up from 20 per cent a year ago. Consultancy enjoys a strong pipeline and field marketing spies a stronger second half. The acquisition of digital marketing business Amaze for £15.3m in cash will add a crucial fourth leg later this month, and means marketing services will account for at least 35 per cent of profits next financial year.
After the exit from lower-margin sectors of its print business, this unit looks more stable with continued cost-cutting and efficiency drives helping to edge up profits despite diminishing revenues. It is also generating cash, which helped fund the raised half-year dividend. Taking into account a small contribution from Amaze and adjusting for acquisition costs, broker Numis Securities forecasts full-year pre-tax profits of £26.7m and EPS of 16.8p (from £24.2m and 15.6p in 2012).
ST IVES (SIV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136p | MARKET VALUE: | £162m | |
| TOUCH: | 135-137p | 12-MONTH HIGH: | 137.5p | LOW: 67.5p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 123p* | NET DEBT: | 5% | |
| Half-year to 1 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012** | 168 | -1.55 | -2.69 | 1.75 |
| 2013 | 167 | 2.00 | 0.74 | 2.00 |
| % change | -1 | - | - | +14 |
*Includes intangible assets of £96m, or 80p a share **Restated | ||||
