Media distribution company Perform (PER) is in a rapid expansion phase. Specialising in supplying subscription content to gaming companies around the world, the company spent the first half of 2013 making acquisitions and snapping up additional broadcast rights in new territories. The resulting drop in gross profit margins from 51 per cent to 48 per cent, plus a number of exceptional charges totalling £4.6m, generated a statutory loss that is unlikely to reverse by the year-end.
The post-results period saw the most corporate activity with the company raising £113m through the placing of 23.9m new shares. The first tranche of that money was used to finance the takeover of data company Opta, which supplies broadcasters with sports statistics, for £40m.
Operationally, Perform's content costs rose markedly to £29.3m, up from £21m, as it acquired additional live sporting rights. This represented 32 per cent of revenues in the period, but management believes this proportion will fall over time as Perform's natural operational leverage kicks in. The order book already has £187m of revenues contracted for this year. The market is now waiting for the renewal rates for its Watch&Bet subscription service for the period 2014-2016, and management sounded broadly positive.
Broker Numis forecasts pre-tax profits for 2013 of £44m, giving EPS of 14.5p - up from £29.8m and 11.1p in 2012.
PERFORM GROUP (PER) | ||||
|---|---|---|---|---|
| ORD PRICE: | 525p | MARKET VALUE: | £1.38bn | |
| TOUCH: | 524-525p | 12-MONTH HIGH: | 600p | LOW: 340p |
| DIVIDEND YIELD: | nil | PE RATIO: | 154 | |
| NET ASSET VALUE: | 69p* | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 67.4 | 3.41 | 1.20 | nil |
| 2013 | 92.4 | -2.64 | -0.90 | nil |
| % change | +37 | - | - | - |
Ex-div:- Payment:- *Includes intangible assets of £233m, or 89p share | ||||
