Join our community of smart investors

Ascential buys into marketing analytics

The media group's cash conversion rate remains high
July 24, 2019

The reinvention of Ascential (ASCL) continues at an exhausting pace. With its four operating segments – product design, marketing, built environment & policy and sales now settled in after a restructure, the media group has made a foray into marketing analytics, agreeing to take a 35 per cent stake in Avast (AVST) subsidiary Jumpshot for $60.8m (£48m). The underlying shareholders' agreement will include a put and call option for an additional 16 per cent of the business. 

IC TIP: Hold at 390p

The group reported solid growth across three of its four segments, though organic cash profit growth at the sales segment was constricted due to investment and integration costs linked to Ascential’s Edge data advisory business and falling revenues from some events. However, the group's ability to turn profits into cash flows, evidenced by a conversion rate of 102 per cent, underpinned a reduction in the net debt leverage to a multiple of 0.9 from 1.1 at the 2018 half-year.

Peel Hunt forecasts full-year 2019 adjusted pre-tax profits and EPS of £89.8m and 16.3p respectively, rising to £103m and 18.7p in 2020.

ASCENTIAL (ASCL)   
ORD PRICE:390pMARKET VALUE:£1.57bn
TOUCH:389-390p12-MONTH HIGH:460pLOW: 336p
DIVIDEND YIELD:1.5%PE RATIO:61
NET ASSET VALUE:138p*NET DEBT:19%
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201818923.14.01.9
201923630.55.41.8
% change+25+32+35-5
Ex-div:29 Aug   
Payment:27 Sep   
*Includes intangible assets of £772m, or 192p a share