An ongoing restructuring hit profits at marketing company Communisis (CMS) in 2016, pushing its operating profit down 32 per cent to £14.4m for the year. The group incurred £4.3m in restructuring costs, mostly staff redundancies as well as some costs relating to site closures. Lower down the income statement, pre-tax profits were made to look worse by a £4m credit in 2015, mostly due to the renegotiation of an earn-out acquisition agreement. Exclude one-offs, and the statutory decline becomes a 9 per cent constant currency gain.
At a divisional level, growth in revenues for the brand deployment business, which includes shopper marketing and print sourcing, more than offset declines in the customer experience business. The latter's turnover fell to £185m, from £210m in 2015, as a result of lower agency spend and the impact of converting from print to digital communication channels. Brand deployment revenues grew by a fifth to £177m, as a result of recovery in the shopper marketing business, and international expansion - overseas revenue accounted for just over half the divisional contribution.
Analysts at Liberum are forecasting adjusted profit before tax of £17.3m for 2017, giving adjusted EPS of 6.3p (up from £16.7m and 6.1p in 2016).
COMMUNISIS (CMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 52p | MARKET VALUE: | £108m | |
| TOUCH: | 51.5-52.5p | 12-MONTH HIGH: | 53p | LOW: 33p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 25% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 230 | 5.1 | 2.8 | 1.65 |
| 2013 | 270 | 6.2 | 2.7 | 1.80 |
| 2014 | 343 | -13.2 | -7.7 | 2.00 |
| 2015 | 354 | 17.3 | 7.0 | 2.20 |
| 2016 | 362 | 11.6 | 4.1 | 2.42 |
| % change | +2 | -33 | -41 | +10 |
Ex-div: 27 Apr Payment: 26 May *Includes intangible assets of £188m, or 90p a share | ||||
