Now: Creston plans to sell its DLKW advertising agency to IPG-owned Lowe for £28m in cash, subject to shareholder approval.
The move will virtually wipe out current borrowings of £24.9m at a stroke, leaving the company with the financial clout to concentrate on better grow opportunities within research, communications and marketing analytics.
The news came alongside results for the year to 31 March showing a 3 per cent fall in full-year headline pre-tax profit of £13.8m, on revenue 4 per cent down at £80.5m. The 1p per share payout signals a welcome return to the dividend list after axing the last two dividend payments.
The sale price - roughly 9-times DLKW’s profits - also implies that the remaining Creston business remains significantly undervalued on a 2011 PE ratio of 6, based on Singer Capital Market’s 2011 EPS estimate of 15.8p.
When: 08/04/10
Price: 92p
Performance to date: +10%
