Marketing company Communisis (CMS) saw its share price rocket 8 per cent following the announcement of its results, which provided a little amusement for chief executive Andy Blundell: "Our dividend did yield 7 per cent first thing this morning," he joked. Still, the interim dividend increase is sure to please shareholders.
The group has undergone a major restructuring, including split into two separate client-facing divisions which is expected to help reduce annual costs by £3m, after an initial £4m investment this year. The operations that fall into the brand deployment division performed well, with revenue here more than doubling. This helped to offset the 6 per cent revenue decline from the customer experience business, which suffered due to ongoing difficulties in migrating customers from paper to digital bills. Costs have already been reduced, which helped drive an 8 per cent increase in group adjusted operating profit, despite the flat top-line performance.
The outlook is good, with two major contracts secured in the period. The group is also more geographically diverse, with international sales now accounting for 24 per cent of overall revenue, up from 18 per cent in the comparable period of 2015.
House broker Liberum expects adjusted EPS for the 2016 financial year of 6p, up from 5.2p in 2015.
COMMUNISIS (CMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37.5p | MARKET VALUE: | £79m | |
| TOUCH: | 37-38p | 12-MONTH HIGH / LOW: | 57p | 33p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 28% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 175 | 3.2 | 1.2 | 0.73 |
| 2016 | 175 | 4.4 | 1.6 | 0.81 |
| % change | +0 | +37 | +35 | +11 |
Ex-div: 15 Sep Payment: 13 Oct *Includes intangible assets of £190m, or 91p a share | ||||
