Don't worry about the reported loss at marketer Chime Communications (CHW) - adjust for acquisition-related costs and pre-tax profit was roughly flat at £25m. Moreover, and despite tough comparisons with 2012's Olympics year, operating income grew 8 per cent last year.
Chime signed high-profile customers, too, including Asda and Coca-Cola, and increased its average fee per client by about 9 per cent to £99,000. It also reduced dependence on its 30 largest clients - they contributed 44 per cent of total income, down from 49 per cent. Going forward, prospects look good and management expects operating income from this year's FIFA World Cup and Commonwealth Games to exceed that generated from the Olympics.
Several overseas offices were opened as well and Chime made four decent-sized acquisitions last year, which helped reduce reliance on big events. Those deals included buying JMI, an American motorsports agency, and Shanghai's People Marketing - income from overseas offices rose by 65 per cent last year. That said, net debt soared to nearly £40m, from 2012's £4.2m net cash position.
Broker Numis Securities trimmed its forecasts by 3 per cent, citing currency headwinds. It now expects adjusted pre-tax profit of £37.5m for 2014, giving adjusted EPS of 26.7p (from 19.5p in 2013).
| CHIME COMMUNICATIONS (CHW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 334p | MARKET VALUE: | £328m | |
| TOUCH: | 333-337p | 12-MONTH HIGH: | 375p | LOW: 238p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 185p* | NET DEBT: | 22% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 123 | 18.8 | 22.5 | 5.10 |
| 2010 | 149 | 26.5 | 25.5 | 6.05 |
| 2011 | 286 | 17.8 | 16.2 | 6.58 |
| 2012 | 344 | 2.5 | -1.6 | 7.24 |
| 2013 | 299 | -4.7 | -12.6 | 7.34 |
| % change | -13 | - | - | +1 |
Ex-div: 21 May Payment: 13 Jun *Includes intangible assets of £235m, or 238p a share | ||||
