The motivation for another corporate restructure at marketing outfit St Ives (SIV) comes down to "transparency" and a "better reflection of the business", according to chief executive Matt Armitage. It's not as drastic as it sounds. The company has split its operations into three segments - strategic marketing, marketing activation and books - and will report sales and, crucially, profits for each division separately. Mr Armitage said the new structure showed investors "how the business is run internally".
The new structure forced management to clarify how the books division would secure growth. The majority of its business over the next three to six years will come from a new long-term contract with the UK's largest publishing group, Penguin Random House.
But Mr Armitage said strategic marketing services would be responsible for most of St Ives' growth. The board is still looking for acquisitions, specifically in media analytics, consultancies and US-based businesses, which it hopes to finance through a mix of debt and equity. Two acquisitions hurt the bottom line last year: over £12m in acquisition and restructuring costs took a large bite out of £14.9m in underlying pre-tax profits.
Brokerage Numis expects adjusted pre-tax profits of £31m for the full year, giving EPS of 18.8p, up from £29m and 17.7p, respectively, in 2014.
| ST IVES (SIV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 185p | MARKET VALUE: | £235m | |
| TOUCH: | 181-185p | 12-MONTH HIGH: | 225p | LOW: 168p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 52 | |
| NET ASSET VALUE: | 96p* | NET DEBT: | 35% | |
| Half-year to 30 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 168 | 6.2 | 5.89 | 2.15 |
| 2014 | 175 | 2.3 | 0.86 | 2.25 |
| % change | +4 | -63 | -85 | +5 |
Ex-div: 9 Apr Payment: 8 May *Includes intangible assets of £163m, or 128p a share | ||||
