Huntsworth (HNT) hasn’t always been a healthcare group, but in 2017 that was the division that kept revenues ticking in the right direction. The group’s three healthcare services – marketing, medical and immersive – all reported like-for-like sales growth, which more than offset a 7 per cent decline in the historic communications division.
Huntsworth is a masterclass in good management. In just a few years it has evolved from an average public relations company operating in a dwindling marketplace to a healthcare services company in a fast-growing industry. And that change – which up until this year has been 100 per cent organic – has hardly cost a thing. Thus, in 2017, free cash flow hit £20.7m, nearly 10 times that recorded in the previous financial year.
The group also benefited from the higher margins in the healthcare business – which now contributes 79 per cent of operating profits – and the closure of two loss-making agencies in the communications group. The latter managed to report double-digit operating profit growth, despite a downturn in revenues. This excellent performance prompted broker Numis to raise its 2018 pre-tax profit and EPS estimates to £27m and 6.4p (from £24m and 5.8p in 2017) in spite of foreign exchange headwinds.
| HUNTSWORTH (HNT) | ||||
| ORD PRICE: | 80p | MARKET VALUE: | £264m | |
| TOUCH: | 80-84p | 12-MONTH HIGH: | 87p | LOW: 40p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 47.8p* | NET DEBT | 23% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 209 | 17.1 | 5.0 | 3.50 |
| 2014 | 206 | -59.6 | -17.6 | 1.75 |
| 2015 | 209 | -39.8 | -12.3 | 1.75 |
| 2016 | 216 | -16.5 | -5.6 | 1.75 |
| 2017 | 260 | 22.9 | 4.8 | 2.00 |
| % change | +20 | - | - | +14 |
| Ex-div: | 24 May | |||
| Payment: | 5 Jul | |||
| *Includes intangible assets of £181m, or 55p a share | ||||
