Public relations and brutal honesty rarely go together. Yet communications group Huntsworth (HNT) packaged weak full-year figures and a halving of the dividend with frank comments about an "unusually turbulent" year, "disruptive and distracting" board changes and a "longer-than-expected" turnaround at its Grayling unit. The news sent the shares down 10 per cent on results day.
Digital investments, overseas expansion and a reorganisation failed to arrest a slide in sales and operating profits in three of Huntsworth's four divisions. Group operating profits slid 23 per cent to £18.2m as the margin at long-ailing PR business Grayling narrowed from 14.3 per cent to 7.7 per cent. And that doesn't include a £71.5m non-cash impairment charge that management booked to reflect the need for further restructuring at Grayling.
Financial PR shop Citigate advised on half-a-dozen UK floats, including those of Game Digital and Poundland, but fierce competition weighed on its sales in Europe. The star performer was Huntsworth Health, where soaring digital sales pushed operating profits up to £12.3m.
Huntsworth recently appointed a new chief executive and several new directors. They have their work cut out: Grayling has continued to struggle this year, winning fewer US mandates than expected.
Broker Numis slashed its full-year pre-tax profit and EPS forecasts by about a quarter to £15m and 3.4p respectively (from £16m and 3.7p in 2014).
| HUNTSWORTH (HNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 40p | MARKET VALUE: | £130m | |
| TOUCH: | 40-41p | 12-MONTH HIGH: | 72p | LOW: 33p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 18% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 224 | 21.8 | 7.4 | 3.50 |
| 2011 | 221 | 10.6 | 4.1 | 3.50 |
| 2012 | 216 | 18.8 | 6.3 | 3.50 |
| 2013 | 209 | 17.1 | 5.0 | 3.50 |
| 2014 | 206 | -59.6 | -17.6 | 1.75 |
| % change | -1 | - | - | -50 |
Ex-div: 28 May Payment: 6 July *Includes intangible assets of £226m, or 69p a share | ||||
