St Ives' (SIV) full-year figures revealed that its ongoing efforts to move away from low-margin print business and towards higher-margin consultancy-style marketing services are paying off. Indeed, group underlying pre-tax profit grew by 10.7 per cent year on year to £26.8m.
That shift in focus away from print continued at the end of last month with the £8m disposal of St Ives Direct Bradford. In fact, it's such print-focused disposals that explain the largely flat revenues in the period, while the integration of the Branded3 and Amaze acquisitions in the period has bolstered the marketing services side. Consequently, the group achieved its target of generating over 30 per cent of group operating profit from marketing services a year ahead of schedule. What's more, the group's restructuring efforts have led to a 150 basis point increase in the group gross margin to 28.9 per cent. After spending £22.3m on acquisitions in the year, however, the group's net debt pile did rise by 13 per cent. But a rise in corporate bond yields have allowed St Ives to eliminate a £20m deficit in its pension scheme.
Broker Numis Securities expects adjusted pre-tax profit of £28.5m for 2014, giving adjusted EPS of 17.8p (from £26.8m and 16.9p in 2013).
| ST IVES (SIV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 173p | MARKET VALUE: | £211m | |
| TOUCH: | 173-176p | 12-MONTH HIGH: | 175p | LOW: 78p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 122p* | NET DEBT: | 10% | |
| Year to 2 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 387 | -7.24 | -6.14 | 2.25 |
| 2010 † | 291 | 13.2 | 10.9 | 3.50 |
| 2011 | 297 | 16.9 | 13.2 | 5.25 |
| 2012 | 329 | 6.39 | 4.31 | 5.75 |
| 2013 | 323 | 7.06 | 4.73 | 6.50 |
| % change | -2 | +10 | +10 | +13 |
Ex-div: 27 Nov Payment: 20 Dec *Includes intangible assets of £123m, or 101p a share †Restated | ||||
