Shares in RPS (RPS) headed in the right direction after the FTSE 250 energy consultancy bumped up its annual dividend by 15 per cent on the back of encouraging full-year figures for 2014.
Operating profit climbed 10 per cent to £50.4m as the group managed to broadly maintain or increase margins across its business segments - with the exception of the Built and Natural Environment (BNE) unit in North America. A slight contraction in BNE margins was easily outweighed by a near one-third jump in fee income on a constant currency basis.
Meanwhile, constant currency fee income from RPS's key energy segment increased by 14 per cent to £205m. This is noteworthy because some of the group's oil and gas clients have trimmed their operational expenses in response to the sharp fall in crude oil prices.
It would be unrealistic to expect RPS's energy business to sustain its underlying growth rate through 2015, as the effects of industry spending cuts are usually delayed. RPS also has to contend with ongoing political ructions in the Middle East, which have already resulted in some of its clients stalling their investments in the Kurdistan region of Iraq. To counter these effects, RPS is cutting costs and focusing on areas of the energy market likely to attract investment.
JPMorgan Cazenove expects EPS of 23.1p in 2015, rising to 24.5p the year after.
| RPS (RPS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 268p | MARKET VALUE: | £594m | |
| TOUCH: | 268-269p | 12-MONTH HIGH: | 358p | LOW: 182p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 174p* | NET DEBT: | 19% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 462 | 42.5 | 14.8 | 4.80 |
| 2011 | 529 | 40.5 | 13.5 | 5.60 |
| 2012 | 556 | 40.2 | 11.9 | 6.40 |
| 2013 | 568 | 43.6 | 13.1 | 7.36 |
| 2014 | 572 | 46.3 | 15.2 | 8.47 |
| % change | +1 | +6 | +16 | +15 |
Ex-div: 23 Apr Payment: 22 May *Includes intangible assets of £405, or 183p a share | ||||
