St Ives (SIV) bumped up its full-year dividend as a brace of new acquisitions helped propel net profits to £10.5m, from just £4.4m a year earlier. The marked improvement for the year ending August 1st reflects the group's success in moving its business mix towards higher-margin consultancy and marketing contracts.
During the period, St Ives acquired digital marketing agency Realise Holdings, followed by healthcare consultancy Health Hive Group, for a combined sum of around £43m in cash and shares. The acquisitions boosted revenues in St Ives' marketing services business, but even without them growth was strong, with like-for-like sales up 12 per cent. Management points out that the expansion of the marketing services division has also broadened St Ives' geographic footprint. Meanwhile, revenues fell 9 per cent in the large but low-growth print services division, but that mainly reflected the sale of the direct-mail business.
The active acquisition programme resulted in a substantial increase in net debt. However, the year-end total of £42.7m (up from £15.2 in 2013) is covered by annual cash profits - and is "easily manageable", says chief executive Matt Armitage.
N+1 Singer expects diluted EPS of 18.8p for the current year, and has raised its dividend forecast from 7.55p to 7.65p.
| ST IVES (SIV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £250m | |
| TOUCH: | 198-200p | 12-MONTH HIGH: | 225p | LOW: 160p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 115p* | NET DEBT: | 30% | |
| Year to 1 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 291 | 13.2 | 10.9 | 3.5 |
| 2011 | 297 | 16.9 | 13.2 | 5.25 |
| 2012 | 329 | 6.4 | 4.3 | 5.75 |
| 2013 † | 323 | 5.5 | 3.7 | 6.5 |
| 2014 | 331 | 11.9 | 8.6 | 7.15 |
| % change | +2 | +118 | +132 | +10 |
Ex-div: 20 Nov Payment: 18 Dec *Includes intangible assets of £167m, or 134p a share. † Restated | ||||
