Marketing services group Communisis (CMS) won two major contracts in 2017, renewing and expanding its work with a major (if unnamed) UK bank and developing its partnership with Proximity to provide communication services for TV licensing. In addition, it also implemented its contract with HMRC for printed customer communication.
New business wins and improved revenue from digital services contributed to enhanced performance in the customer experience division, while brand deployment benefited from the increasingly international operations of the group. Non-UK business now accounts for 30 per cent of group revenue, up from 26 per cent in 2016.
Future growth is slated to come from the group’s “value enhancement programme”. The group is focusing on expanding its digital offering, building out its international operations and improving efficiency. The programme is intended to produce a compound annual growth rate of 5-10 per cent for adjusted earnings per share over the next three years. The plans were enough for analysts at Liberum to increase their target price for the shares to 88p from 85p. They are forecasting adjusted pre-tax profit of £18.3m, giving EPS of 6.8p for 2018 (from £17.2m and 6.4p in 2017).
| COMMUNISIS (CMS) | ||||
| ORD PRICE: | 67p | MARKET VALUE: | £140m | |
| TOUCH: | 66.2-67p | 12-MONTH HIGH: | 73p | LOW: 46p |
| DIVIDEND YIELD: | 4% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 66p* | NET DEBT: | 17% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 270 | 6.2 | 2.70 | 1.80 |
| 2014 | 343 | -13.2 | -7.70 | 2.00 |
| 2015 | 354 | 17.3 | 7.00 | 2.20 |
| 2016 | 362 | 11.6 | 4.12 | 2.42 |
| 2017 | 376 | 14.4 | 5.64 | 2.66 |
| % change | +4 | +25 | +37 | +10 |
| Ex-div: | tba | |||
| Payment: | tba | |||
| *Includes intangible assets of £186m, or 89p a share | ||||
