Quarto (QRT) booked a record profit in 2015. But the impressive performance was overshadowed by news that the illustrated book publisher's activist shareholder Christopher Mills and chairman Tim Chadwick are stepping down. Mr Chadwick, who oversaw a restructuring programme credited for reducing debt by over a quarter and lifting adjusted pre-tax profit by a half, is understandably popular with shareholders.
Fruits of the restructuring strategy can be found here. Strong cash generation helped the group to slash net debt by a further tenth and continue boosting the dividend, as revenue climbed 6 per cent in a market supposedly in decline.
Leading the pack was the core publishing segment. A recovery in the US fuelled by Quarto's market-leading position in the fashionable adult colouring books market drove divisional adjusted operating profit up 17 per cent to $18.5m (£12.8m). A better than expected contribution from Ivy Press, the publisher of creative illustrated books and stationery acquired in March last year, was also decisive.
Following the success of recent acquisitions, management announced plans to seek out further deals as part of its drive to diversify and add new titles to its portfolio. Broker Stockdale forecasts adjusted pre-tax profit of $14.9m in 2016, giving EPS of 54.3¢ (2015: $14.1m and 49.3¢).
| QUARTO (QRT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 254p | MARKET VALUE: | £50m | |
| TOUCH: | 250-258p | 12-MONTH HIGH: | 272p | LOW: 165p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 253¢* | NET DEBT: | 108% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 186 | 9.4 | 38.9 | 7.9 |
| 2012 | 181 | 7.1 | 25.9 | 7.9 |
| 2013 | 176 | 5.8 | 18.6 | 7.9 |
| 2014† | 171 | 12.0 | 44.5 | 8.3 |
| 2015 | 182 | 12.9 | 45.0 | 9.5 |
| % change | +6 | +8 | +1 | +14 |
Ex-div: 19 May Payment: 17 Jun *Includes intangibles of $42m, or 211¢ a share †Restated £1=$1.43 | ||||
