"Imagine if every change was 50 per cent threat and 50 per cent opportunity," suggests one of the pages on Maintel 's (MAI) website. Despite the corporatese, the maxim encapsulates the managed communication services group's last financial year. Faced with slowing customer orders and sliding revenues in each of its three divisions, the group took the opportunity to double its top line through the £1 acquisition of peer Azzurri - with assumed debts, of course.
With eight months of trading under its belt, the purchase has already shown its worth. Adjusted cash profits of £12.6m were £4.9m up on last year - the same amount as the contribution from Azzurri. Stickier customers inherited from the new business also pushed up recurring orders from 69 to 73 per cent of all revenues. Of equal importance, the tie-up had already provided £2.2m in cost synergies by the end of 2016, a saving well ahead of management's stated target.
And, while organic turnover was essentially flat year on year, the historic Maintel business still managed to reverse a first-half decline in revenues within the core managed services and technology division.
Broker FinnCap expects full-year adjusted pre-tax profits of £15.5m and EPS of 89.3p, rising to £16.9m and 95.2p in 2018.
MAINTEL HOLDINGS (MAI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,038p | MARKET VALUE: | £147m | |
| TOUCH: | 975-1,100p | 12-MONTH HIGH: | 1,138p | LOW: 690p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 65 | |
| NET ASSET VALUE: | 199p* | NET DEBT: | 70% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 28.2 | 1.41 | 3.40 | 13.6 |
| 2013 | 31.1 | 3.64 | 25.0 | 15.7 |
| 2014 | 41.9 | 3.81 | 27.6 | 20.9 |
| 2015 | 50.6 | 4.15 | 38.0 | 29.3 |
| 2016 | 108 | 2.11 | 16.0 | 30.8 |
| % change | +114 | -49 | -58 | +5 |
Ex-div: 30 Mar Payment: 18 May *Includes intangible assets of £63m, or 445p a share. | ||||
