The restructuring of St Ives' (SIV) businesses model seems to be doing the trick for the international marketing services group. Strip out restructuring and acquisition-related costs and underlying full-year pre-tax profit grew 10 per cent to £33m. Although St Ives' market activation and legacy print businesses reported mixed trading conditions, the restructuring changes have been justified by the strong performance of the higher-margin strategic marketing business. The segment now accounts for almost half of the group's underlying operating profit, but that contribution is expected to increase significantly over time.
Strategic marketing, which provides data, digital and consulting services to brands ranging from Hewlett Packard to Chelsea football club, grew underlying operating profit by more than a quarter to £111m via its 10 agencies. The segment's Incite agency began operating in Shanghai, part of the group's strategy to grow its overseas strategic marketing capabilities.
Following the year-end, the group also acquired specialist retail property consultancy Fripp, Sandeman & Partners. And prospects for St Ives' books business are looking up, following a deal with Penguin Random House that will secure 80 per cent of its revenue over the next three to six years.
Prior to these results, broker Peel Hunt expected adjusted EPS of 20.2p for the July 2016 year-end, up from 18.7p in 2015.
ST IVES (SIV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183p | MARKET VALUE: | £240m | |
| TOUCH: | 181-183p | 12-MONTH HIGH: | 202p | LOW: 160p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 102p* | NET DEBT: | 47% | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 297 | 16.9 | 13.2 | 5.25 |
| 2012 | 329 | 6.4 | 4.3 | 5.75 |
| 2013 | 323 | 5.5 | 3.7 | 6.50 |
| 2014 (restated) | 331 | 11.9 | 8.6 | 7.15 |
| 2015 | 345 | 8.7 | 4.4 | 7.80 |
| % change | +4 | -27 | -49 | +9 |
Ex-div: 26 Nov Payment: 22 Dec *Includes intangible assets of £183m, or 140p a share | ||||
