Huntsworth reassures as marketing returns to growth

Investment Ideas 

Huntsworth reassures as marketing returns to growth

BUY

Tip Update: Buy at 106p

Tip style
GROWTH
Risk rating
MEDIUM
Timescale
LONG TERM
Our previous tip
We said BUY at 96p on 24 May 2018
Tip performance to date
+10%

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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