Investors showed Huntsworth (HNT) little mercy, sending its shares down 4 per cent on results day. Weak trading at Grayling and Citigate meant the communications group stomached a goodwill write-down of about £49m, but ignore that and operating profit still fell 29 per cent to £6.3m.
Huntsworth - which has more than 1,500 clients and offices in 30 countries - was saved from greater losses by its healthcare PR agencies. Assignments from several pharmaceutical giants and mounting demand for digital consumer marketing fuelled a 16 per cent rise in their operating profit to £6.6m.
Grayling won work with US car-hire giant Uber and opened offices in Oman, Abu Dhabi and Kenya. But the troubled PR shop's operating profit tumbled by more than three-quarters as recent restructuring weighed on sales and margins. Management has appointed new leaders in six territories, shuttered five offices and downsized underperforming operations: it hopes those steps will improve the division's profitability in 2016.
Financial PR specialist Citigate advised on the public flotations of HSS Hire (HSS) and French pharmaceutical company Abivax, but fierce competition in London for deal mandates meant its margins narrowed sharply. More positively, PR agency Red returned to top-line growth as it signed contracts with Heathrow Airport and UK housebuilder Crest Nicholson (CRST).
Broker Numis Securities slashed its forecasts and now expects pre-tax profit of £13m, giving EPS of 2.9p (from £16m and 3.7p in 2014).
| HUNTSWORTH (HNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 36.5p | MARKET VALUE: | £119m | |
| TOUCH: | 36.3-38p | 12-MONTH HIGH: | 53p | LOW: 33p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 45p* | NET DEBT: | 23% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 98 | 6.3 | 1.5 | 1.0 |
| 2015 | 101 | -45.9 | -13.5 | 0.5 |
| % change | +3 | - | - | -50 |
Ex-div: 1 Oct Payment: 6 Nov *Includes intangible assets of £174m, or 53p a share | ||||
