Market research group BrainJuicer (BJU) saw it its sales in final quarter largely dry up - which helps explain the crash in full-year profits. The reasons for this is fairly straightforward - recession-hit companies in Europe and the US simply cancelled their unspent market research budgets towards the year-end in a general curb on extraneous spending, instead of commissioning more surveys from BrainJuicer.
Unfortunately, for a business that operates with a high level of operational gearing, BrainJuicer's own overheads rose 9 per cent during the period - which explains why there was such a disproportionate profit slide. Management admits that its forecasts on costs for the year were wrong and that more people were recruited than the eventual sales outcome merited. The other problem is the high proportion of business generated in struggling recession-hit Europe - 61 per cent of gross profit. Indeed, gross profit in Germany and Holland fell 22 per cent and 57 per cent, respectively, while the core UK market experienced an 8 per gross profit fall. Chief financial officer James Geddes said fundamental volatility in the business wouldn't change this year, but that costs have been cut with employee numbers down 9 per cent.
Analysts' forecasts are under review but, prior to these results, Edison Investment Research expected pre-tax profit for 2013 of £2.5m, giving EPS of 12.9p (7.9p in 2012).
BRAINJUICER (BJU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 239p | MARKET VALUE: | £30.1m | |
| TOUCH: | 232-245p | 12-MONTH HIGH: | 363p | LOW: 199p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 58p* | NET CASH: | £3.75m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 9.30 | 1.37 | 7.60 | 1.50 |
| 2009 | 11.8 | 1.66 | 9.20 | 1.90 |
| 2010 | 16.4 | 2.22 | 11.7 | 2.40 |
| 2011 | 20.7 | 2.76 | 14.8 | 3.00 |
| 2012 | 20.8 | 1.52 | 8.30 | 3.10 |
| % change | - | -45 | -44 | +3 |
Ex-div: 28 May Payment: 28 Jun *Includes intangible assets of £1.26m, or 10p a share | ||||
