Creston announced the acquisition of US-based Corkery medical public relations company in a $6m (£3.9m) as the medical agency reported underlying pre-tax profits 13 per cent higher to £4.8m on a 3.3 per cent increase in like-for-like revenues. This was mainly driven by Creston's core communications division which posted operating profits up from £2.3m to £2.9m as the business shifted into mobile phone marketing and social media.
The Crockery acquisition strengthens the group's health division and complements Cooney/Waters, the US healthcare communications specialist acquired by Creston last year. Reflecting the contribution from the Cooney/Waters acquisition, health marketing, the second-largest business segment, increased revenues 78 per cent to £8m and operating profits 50 per cent higher at £1.8m. However, the outlook for healthcare is unclear as the sector is undergoing major structural upheaval and management noted a slowdown in new business as pharmaceutical companies slashed budgets in the face of patent expiries for major drugs, in addition to governments reducing public health marketing. Austerity measures also affected the market research-dependent Insight division, which saw revenues fall 3 per cent to £7.5m and profits tumble £0.5m to £1.7m as companies reined back on non-essential spending.
Reflecting the tougher macro-economic environment, Investec trimmed its full-year adjusted EPS forecast by 4 per cent to 15.3p (2011: 12.4p).
CRESTON (CRE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 75p | MARKET VALUE: | £46.0m | |
| TOUCH: | 74-76p | 12-MONTH HIGH: | 123p | LOW:70p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 160p* | NET DEBT: | 6% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 32.0 | 4.19 | 5.02 | 0.75 |
| 2011 | 36.5 | 4.09 | 4.67 | 0.83 |
| % change | +14 | -2 | -7 | +11 |
Ex-div: 7 Dec Payment: 10 Jan *Includes intangible assets of £102m, or 167p a share | ||||
