The share price of Penna Consulting (PNA) rose sharply after the company said it would beat expectations and house broker Panmure Gordon raised its pre-tax profit forecast for 2016 from £5.5m to £6m. A doubling of the half-year dividend didn't hurt, either, as the human resources specialist responded to large shareholders' desire for income.
The increased payout accompanied the company's best set of half-year results since 2009, when Penna's counter-cyclical outplacement division did extremely well. While the company expects more outplacement mandates from local authorities, retail clients, and police forces, the recruitment business has been the standout performer so far this year, thanks to strong client demand and a growing appetite for consultancy-led recruitment. The division boosted net revenue by a quarter in the period, with operating profit up 16 per cent to £1.6m.
Elsewhere, the previously loss-making talent management division is now at break-even, helped by a 45 per cent growth in net revenue to £3.1m. Chief executive Gary Browning is confident these services will soon be a major contributor to group profit, as the division targets annual revenue of £10m.
Broker Panmure Gordon now expects earnings per share of 19p for the March 2016 year-end, up from 15.1p in 2015.
PENNA CONSULTING (PNA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 280p | MARKET VALUE: | £72.2m | |
| TOUCH: | 275-285p | 12-MONTH HIGH: | 282p | LOW: 128p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 87p* | NET CASH: | £4.2m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 41.1 | 2.1 | 6.6 | 2 |
| 2015 | 47.1 | 2.8 | 9.1 | 4 |
| % change | +15 | +34 | +36 | +100 |
Ex-div: 18 Feb Payment: 17 Mar *Includes intangible assets of £20.3m, or 79p a share | ||||
