St Ives – 137p

12 March – interim results

The group has announced solid interim results for the six months to 1 February with underlying pre-tax profits up by 10.1% to £12.2m (2012: £11.1m) despite a fall in revenues to £162m (2012: £166m).  Underlying earnings per share increased to 7.7p (2012: 7.1p) and the interim dividend was raised to 2p (2012: 1.75p).  The group’s move away from lower margin print activities towards the higher margin marketing activities has helped margins and profits improve and the group has made further progress in this area with the acquisition of Amaze plc which has also been announced.  Amaze is a leading marketing and technology consultancy employing 200 staff serving a large number of clients including international brand names.  The cost of the acquisition is £15.1m in cash with up to a further £9.0m payable depending on Amaze’s performance in 2013.  These are impressive figures and the group is in a strong position to make further progress.  The market does not seem to recognise the potential at the group as with pre-tax profits for the full year forecast to be £26.7m for earnings per share of 16.8p, the shares stand on a p/e ratio of just 8.2x.  BUY.


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