Considering 2017 was supposed to be a difficult year for corporate communications group Maintel (MAI), annual numbers weren’t that bad - certainly not at face value. The acquisitions of Azzurri Communications and Intrinsic Technology have trebled the size of the business and boosted reported revenue, but if you extract exceptional costs adjusted pre-tax profits were down 2 per cent at £10.9m, while adjusted earnings contracted sharply, although this was partly due to new equity issued at the time of the Azzuri acquisition.
The acquisitions may have increased admin costs and dented margins in these numbers, but management is in the middle of an efficiency programme, which, along with the integration of Intrinsic, delivered £3m of annualised savings in the fourth quarter of 2017.
More importantly, the first few months of 2018 have seen a significant recovery in the number of orders placed via its contract with US telecoms group Avaya, which has been under Chapter 11 bankruptcy protection for the past year. The consequent uptick in revenues and continued margin recovery is why house broker FinnCap expects respective pre-tax profits and EPS of £14.4m and 85.5p in the year to December 2018 (£10m and 65.5p in 2017). The profit recovery and continued impressive cash generation mean net debt is expected to fall to 1.3 times adjusted cash profits, from 2.2 times in these numbers.
| MAINTEL (MAI) | ||||
| ORD PRICE: | 815p | MARKET VALUE: | £116m | |
| TOUCH: | 785-845p | 12-MONTH HIGH / LOW: | 1,078p | 600p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 191p* | NET DEBT: | 102% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 31.1 | 3.64 | 25.0 | 15.7 |
| 2014 | 41.9 | 3.81 | 27.6 | 20.9 |
| 2015 | 50.6 | 4.15 | 38.0 | 29.3 |
| 2016 | 108 | 2.11 | 16.0 | 30.8 |
| 2017 | 133 | 3.52 | 21.7 | 33.8 |
| % change | +23 | +67 | +36 | +10 |
| Ex-div: | 30 Mar | |||
| Payment: | 11 May | |||
| *Includes intangible assets of £67.5m, or 475p a share | ||||
