Communisis is the leading UK manufacturer of cheque books, but it is much more than a bog-standard printing company. Cheques now only account for 10 per cent or so of turnover and are a good cash generator, but the word cheque is missing from the latest interim statement. Instead, all the news is about the company's growing capabilities in online communication, social media and specialist support content.
The emphasis is on personalised and digitised communications and more revenue growth coming outside financial services, including fast-moving consumer goods (FMCG), retail and telecoms. Over the 12 months to end-June, these new income streams helped reduce Communisis' reliance on financial services from 57 per cent to 48 per cent of the mix. That's good news, as are the better margins earned on special projects. The move into digital services is ongoing, too, helped by three recent small acquisitions.
And this is feeding through to increasing profits. In fact, underlying operating profits rose 23 per cent to £4.4m if you strip out amortisation charges on acquisitions and restructuring costs, which held back the reported figures. For the full year, broker N+1 Brewin expects underlying pre-tax profits to rise from £9m to £10.5m to produce adjusted EPS of 5.7p, up from 4.5p in 2011.
COMMUNISIS (CMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29.6p | MARKET VALUE: | £41m | |
| TOUCH: | 29-30.25p | 12-MONTH HIGH: | 39.75p | LOW: 23.75p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 93p* | NET DEBT: | 21% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 97.8 | 2.99 | 1.85 | 0.50 |
| 2012 | 112.6 | 2.72 | 1.50 | 0.55 |
| % change | +15 | -9 | -19 | +10 |
Ex-div: 5 Sep Payment: 5 Oct * Including intangible assets of £164m, or 118p a share | ||||
