Huntsworth reassures as marketing returns to growth

Investment Ideas 

Huntsworth reassures as marketing returns to growth


Tip Update: Buy at 106p

Tip style
Risk rating
Our previous tip
We said BUY at 96p on 24 May 2018
Tip performance to date

Huntsworth’s (HNT) shares started the year extremely well, going from around 80p to nearly 140p between January and July. Unfortunately, since mid-year there has been a bit of a reality check and the shares have lost ground since a disappointing performance at the half-year results. However, things are looking up again.

The shares are up 10 per cent after management announced it expects full-year headline profits to "at least" hit market consensus expectations; £29.4m according to broker Peel Hunt. The marketing division has returned to like-for-like revenue growth in the second half after disappointing in the first, and both the medical and immersive divisions have clocked up double-digit revenue growth.

IC View

Huntsworth still has a way to go to recover the ground it has lost since the half year, but recovery in the marketing division is a positive sign. At 106p, the shares trade at 15 times forecast earnings, close to the rating we tipped them at in May (96p, May 24 2018). Buy.

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