Shares in PR agency Huntsworth (HNT) slid 7 per cent on the back of this weak set of results. Although its promising health segment delivered 7 per cent sales growth, operating profits at Grayling, its largest division, slid 27 per cent to £11.2m as depressed European markets took their toll.
If you exclude £4.4m invested in international expansion and hiring 22 senior employees, however, underlying pre-tax profit grew 9 per cent to £24.5m. And trading could improve soon. Huntsworth has proposed a joint venture with Asia’s largest PR group, BlueFocus, to invest in Asia Pacific and other foreign markets. BlueFocus looks committed, having paid nearly £37m for a minority stake in Huntsworth last year.
The aim is to offset European weakness with stronger Asian growth, says chief executive Peter Chadlington. He also wants to ensure the business is "technologically and digitally led". There was certainly progress on that front, with digital revenues up 10 per cent to about £54m as Huntsworth secured further work with clients such as pizza-chain Papa John’s and its health business launched a new digital PR agency.
Following the results, broker Numis Securities cut its forecast for pre-tax profit by a quarter to £20m, giving EPS of 4.7p.
| HUNTSWORTH | ||||
|---|---|---|---|---|
| ORD PRICE: | 64p | MARKET VALUE: | £207m | |
| TOUCH: | 64-66p | 12-MONTH HIGH: | 72p | LOW: 51p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 80p* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 209 | -10.0 | -4.2 | 2.9 |
| 2010 | 224 | 21.8 | 7.4 | 3.5 |
| 2011 | 221 | 10.6 | 4.1 | 3.5 |
| 2012 | 216 | 18.8 | 6.3 | 3.5 |
| 2013 | 209 | 17.1 | 5.0 | 3.5 |
| % change | -3 | -10 | -21 | - |
Ex-div: 28 May Payment: 7 Jul *Includes intangible assets of £293m, or 91p a share | ||||
