Conduit Share Discussion Threads

[madengland] 26/6/2014 17:08

I think it will Riv. I think this year we will stop flatlining profit and we will have a re rating and jump in earnings above expectation.

[rivaldo] 26/6/2014 13:47

A 25k buy at 106p has caused a positive intra-day bounce. Hopefully the long-term uptrend is continuing.

[rivaldo] 20/6/2014 10:06

Good to see then that Liberum, Singer and Edison all agree that CRE are a Buy.

The current year P/E of 8.6 reduces to probably 7 to 7.5 taking into account CRE's £7.5m net cash (and CRE are of course generating more, though offset by the dilaps).

Hopefully the momentum - and the 7.44p EPS achieved in the last H2 alone - will continue into this H1, in which case I can see the conservative 119p broker targets being increased to say 135p-140p.

[markie7] 20/6/2014 08:54

N+1 Brewin, and N+1 Singer are the same thing. Edison is paid for research. ie, advertising. Liberum is house broker, ie corporately supportive.

People can make their own minds up obviously, but lets at least do it on the basis of full facts.

[rivaldo] 20/6/2014 07:12

Liberum reiterate their Buy and 119p target - which is a P/E of 9 based on the consensus 12.25p EPS for this year (let alone the 4.1p dividend):



"Creston plc Receives Buy Rating from Liberum Capital (CRE)

June 19th, 2014 • 0 comments • Filed Under • by ABMN Staff

Creston plc (LON:CRE)'s stock had its "buy" rating reaffirmed by analysts at Liberum Capital in a research report issued to clients and investors on Thursday. They currently have a GBX 125 ($2.12) price target on the stock. Liberum Capital's target price would suggest a potential upside of 19.05% from the company's current price.

A number of other firms have also recently commented on CRE. Analysts at Edison Investment Research reiterated a "positive" rating on shares of Creston plc in a research note on Wednesday, April 23rd. Separately, analysts at Nplus1 Brewin reiterated a "buy" rating on shares of Creston plc in a research note on Wednesday, April 23rd. They now have a GBX 119 ($2.02) price target on the stock. Finally, analysts at N+1 Singer reiterated a "buy" rating on shares of Creston plc in a research note on Wednesday, April 23rd. They now have a GBX 119 ($2.02) price target on the stock."

[spooky] 19/6/2014 16:00

Perhaps Ruffer has finished selling, should get a below 3% RNS if that's the case.

[rivaldo] 19/6/2014 15:54

Great long-term uptrend over the last year, with higher highs and higher lows, and now hopefully moving up again after all that institutional buying.

[madengland] 18/6/2014 18:46

A lot of big trades reporting for sure

[rivaldo] 18/6/2014 14:44

...and now Hargreave Hale (i.e the very highly respected Giles Hargreave) have gone above 5% with 3.092m shares:

[rivaldo] 18/6/2014 07:30

Missed this - CRE have a new institutional investor, as Ignis Investments have declared a 3% stake in CRE with 1.82m shares:

[rivaldo] 17/6/2014 07:40

Shareprophets say Buy:



"Creston plc – tip of the year update
By Steve Moore | Monday 16 June 2014

Having updated on one of my share tips for 2014 earlier this month, the following updates on another after it last week announced results for a year ended 31st March 2014 and a share buy-back programme.

Marketing services group Creston plc (CRE) was a tip of the year at 87.5p – when I noted that with full-year forecasts for earnings per share of circa 11.5p and dividend per share of 3.9p (a 2.70p final payout), the shares looked attractive in both value and income terms.

The recent results showed the company delivering adjusted earnings per share of 11.8p and to recommend a dividend as expected. With the balance sheet also solid (cash (net) of £7.45 million, net current assets £7.64 million and non-current liabilities £5.67 million), the company added that it "intends to maintain a progressive dividend policy" and that it would be acquiring up to £2 million of its own shares in a buy-back programme.

Forecasts are now for earnings per share to increase towards 12.5p and the dividend 4.1p per share this year and there is clear encouragement in that for the 'Communications' division "major new business wins mean the division is well-placed for the next financial year", the 'Health' division having started to replace lost Sanofi business and the 'Insight' division continuing to benefit from some management team and structural changes which have been undertaken.

The shares now continue to trade at above 100p but the noted forecasts and the company's positive trading momentum mean I continue to consider them attractive in both value and income terms. The Nifty Fifty currently has a 115p limit buy price here. So I am still a buyer."

[rivaldo] 16/6/2014 07:23

Good to see the first buyback of 100,000 shares just announced at 106.2p:

[rivaldo] 12/6/2014 10:51

Agreed. The IC conclusion is backwards-looking and reflecting the very misconceptions which the Edison note addresses.

No-one seems to have picked up the 7.44p EPS in H2 alone.

Edison have an update note out as follows - from the sound of it we may get further earnings-enhancing acquisitions:



"Creston CRE:LN 107p Mkt cap £65m
Analyst: Fiona Orford-Williams

Continued progress/new management and exceptional value against its peers.
Results this morning were slightly ahead of forecasts, with FY15 and FY16 estimates broadly unchanged.

Net new business of £8.6m was mostly achieved in H114, with the foot deliberately slightly off the pedal in H214 as the new clients were on-boarded, with returns on the new business starting to show through in H214.

Online and digital revenues comprised over half group totals, a year ahead of schedule. The new board line-up is now mainly in place, with Barrie Brien having stepped up from CFO to CEO and a new CFO, Kathyrn Herrick, officially taking up her post on 1 July. The growth strategy is evolving, building on the progress already achieved in bringing together a previously disparate group of agencies and breaking down silos.

The group has a quality client roster that tends to stay much longer than industry average – the average tenure of the top 20 clients is 11 years. The increasing communication and co-operation between the group's agencies mean that cross-selling expertise to existing clients and joint pitching for new ones is now straightforward and is a key part of the growth strategy now being articulated. The group has moved a long way away from the buy-and-build strategy with which many investors still associate it, making small in-fill acquisitions to add to the skill base alongside investing in small start-ups.

Meeting deferred consideration commitments is really now no longer an issue and the cash on the balance sheet of £7.5m (£5.7m after provisions for deferred payments) supports this and a suggested £2m share buyback programme, which should also help drive EPS forward. The group should now be able to break out of its current plateau.

The share price remains at a substantial discount to the sector of 34% on CY14 P/E and 36% on EV/EBITDA, which is primarily a reflection of the group's history and current earnings plateau. The new management team and clarified strategy for moving profits and earnings ahead is now in place. Delivery on market expectations, as well as a continuing strong net new business win
position, should help close this valuation gap.

On consensus forecasts, Creston trades on 8.7x 2015e P/E, 5.08x 2015e EV/EBITDA and a 2015e 3.8% dividend yield."

[madengland] 11/6/2014 20:56

Results better than expected, market picking up, beanie at the helm..... I would not rule out exceeding expectations this year

[smithie6] 11/6/2014 18:26

"Markie7 11 Jun'14 - 08:39 - 4352 of 4358 0 0

Very poor like for like gp growth in H2 v the peer group. They have hit a massively lowered consensus, big deal. Share buy back just shows a lack of imagination."

imo the share buy back is because the co. has done acquisitions for years....
and the shareholders have lost money !

so, imo the big holders have told the dirs. that they dont want to see the old plan just keep continuing into infinity...

the big acquisitions in USA were supposed to increase the EPS, imo they didnt.
despite costing perhaps 20M

the other options to use cash generated are buy backs or special divis.
they need shares anyway to satisfy the staff option plans (although they could alternatively issue new shares)

I can see the logic in wanting staff to be shareholders....motivation, retention etc.

----

Don Elgie got around 6M from his 13 or so years at Creston....
wonder what he spent it on !?
cruising round the world now in a big yacht perhaps ?!

[paleje] 11/6/2014 15:29

IC have a small article today, don't think it's right to print the lot before the magazine is out but the view:-

IC VIEW
On a forward PE ratio of eight and offering a prospective yield of 4 per cent, the rating is attractive. But meaningful revenue growth is still lacking so the shares remain on hold.

[spooky] 11/6/2014 12:32

I would assume that the seller is Ruffer, they must be almost finished, the share buy back should sort that out.

[rivaldo] 11/6/2014 11:33

Edison have a new note out, forecasting 12.4p EPS and a 4.1p dividend this year:



The 4.1p dividend should guarantee very healthy institutional support, let alone the P/E of 8.6.

Edison summarise as follows, highlighting the "wide discount to the sector":

"Creston has delivered full year results slightly ahead of expectations, and with year-end cash of £7.5m (£5.7m after provisions for deferred consideration). Net new business of £8.6m was biased to H114, starting to deliver returns in H214, with online and digital revenues comprising over half group totals, a year ahead of schedule. The new board line up is now mainly in place, and a growth strategy is evolving, building on the progress already achieved in bringing together agencies and breaking down silos. Coupled with a growing top line, this should enable profits to break out of their current plateau. This highlights the wide discount to the sector on which the shares currently trade."

[markie7] 11/6/2014 09:52

sure, it might be cheap on eps basis. that wasn't my point - it is obvious from these results why there is a discount.

[madengland] 11/6/2014 09:51

Interesting trading today. You can sell big chunks of stock for 107.1p so I don't think there is a big seller......maybe the opposite with a few mm games going on

[rivaldo] 11/6/2014 09:12

As stated previously, CRE made 7.44p EPS in H2 alone, so this H2 was extremely successful....annualised that's almost 15p EPS.

Given the focus on investment, and increased office costs, it's probably over-optimistic to assume 15p EPS this year, but a 20% increase in EPS to say 14p EPS might be possible.

Let's see what the revised broker forecasts tell us - to date they were going for 12.25p EPS this year.

All buys so far this morning (EDIT - a 50k sell has just appeared!). Given yesterday's buying as well it seems there's a seller out there, who'll hopefully be taken out by the share buybacks as well as by general buying volumes.

[markie7] 11/6/2014 08:39

Very poor like for like gp growth in H2 v the peer group. They have hit a massively lowered consensus, big deal. Share buy back just shows a lack of imagination.

[madengland] 11/6/2014 08:08

Buy back......think the share price is cheap or have nothing to throw cash at. At this stage I take either as positive. Get this asset base delivering it's potential suits me, it has lots of potential as we know and let's hope a beanie at the helm drives that.

[rivaldo] 11/6/2014 07:29

Excellent results considering the H1 position - 11.70p EPS beat the 11.2p consensus forecast by some way.

It's worth noting that H2 alone produced 7.44p EPS....if they could reproduce that for this H1 we would be in clover. And CRE are already on a single-digit historic P/E....

The 3.9p dividend is perfectly in line with forecasts.

Note that digital revenues are up to 53% now, above the 50% target one year early.

And CRE have £7.5m net cash too (though there are dilaps and earn-outs over time to take account of).

Agreed QS9, the buyback programme announced separately today should provide a useful boost to the share price. It certainly gives the impression that CRE believe their share price is cheap!

[joe say] 11/6/2014 07:17

plus a decent dividend increase