Strategic Marketing division back on track with 30% revenue growth
Companies: Kin and Carta Plc
St Ives plc, the international marketing services group, published its preliminary results this morning showing strong revenue growth and acquisition growth across the group, but reporting lower PBT yoy and recording a loss per share of 5.93p for the year ending 29 July.
The company saw a 30% increase in revenue in its Strategic Marketing segment, a welcome recovery for the division which caused some alarm to investors in April. Overall, SIV saw 11% organic growth, 19% acquisitive growth, 3% Books growth, but a 7% decline in Marketing Activation. Strategic Marketing now contributes a material 39% of the company's revenue, a 7% increase yoy, and 58% of adj operating profit.
SIV continued to successfully cross-sell to its clients, with 150 of them using services of more than one of the Group businesses.
Broker N+1 Singer said SIV had delivered better than expected revenues and profits, as it reiterated its buy rating:
"...the dividend has been maintained signalling confidence and even the pension deficit is slightly down rather than up. Visibility for FY17 is in good shape with a good number of wins in both Strategic Marketing (58% of EBIT) and Marketing Activation underpinning the outlook. The quick reaction by management to weakness in April has steadied the ship and got it heading in the right direction again.
We maintain our profit expectations for FY17 and FY18 based on higher revenues increasing the buffer in our margin assumptions... The shares have performed incredibly well (+64.1%) since we set out our recovery case at 83.5p in July..."
Matt Armitage, Chief Executive, said:
"We are pleased to confirm that, after some short-term challenges in the final quarter of the Financial Year, trading across our Strategic Marketing segment has stabilised.
"We are excited by the opportunities that the breadth of our marketing services capabilities creates and we are making encouraging progress in bringing in new projects from both existing and new clients. We see significant opportunities to push ahead with our strategic priorities in the year ahead, particular in further organic growth in our Strategic Marketing segment.
"Whilst we remain alert to the possible impact from Brexit on business confidence, we will continue to invest in the UK, the US and Asia to support our medium term growth plans. Assuming no marked change to the current market conditions, we are well positioned to make further progress this year."