Senior executives took the lion's share of first-half profits at Progressive Digital Media (PRO) after a long-term incentive plan vested in March. Share-based payment charges at the business information specialist ballooned more than sevenfold to £3m, wiping out more than nine-tenths of operating profits.
Profits were also eroded by restructuring costs, which quadrupled to £0.7m as the group integrated its Pyramid Research acquisition. Exclude these, though, and adjusted cash profits rose 7 per cent to £6m.
The group also agreed last month to acquire business intelligence provider CurrentAnalysis for a little under £20m in a bid to boost its exposure to the IT industry and broaden its presence geographically. But its acquisition spree may have a downside - dollar-denominated revenues now account for more than a third of Progressive's sales, further exposing it to currency movements.
The group's prospects still look strong, with deferred revenue rising a fifth to more than £16m. It also agreed a £30m new five-year banking facility with the Royal Bank of Scotland. But the company expects full-year share-based payment charges to rise by £3.2m, all but ruling out a profit rally.
Broker N+1 Singer expects cash profits of £14.1m, giving EPS of 10.8p, rising to £17.8m and 14.4p in 2015.
| PROGRESSIVE DIGITAL MEDIA (PRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 270p | MARKET VALUE: | £206m | |
| TOUCH: | 265-275p | 12-MONTH HIGH: | 273p | LOW: 215p |
| DIVIDEND YIELD: | Nil | PE RATIO: | 59 | |
| NET ASSET VALUE: | 47p* | NET CASH: | £5.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 28.4 | 3.6 | 3.4 | nil |
| 2014 | 30.7 | 0.2 | 1.2 | nil |
| % change | +8 | -94 | -63 | - |
*Includes intangible assets of £27.2m, or 35.7p a share | ||||
