Huntsworth Share Discussion Threads

[laddi] 10/7/2006 07:31

HNT Sunday Telegraph Buy Recommendation Sun 9th July 2006:



Huntsworth

The fortunes of Huntsworth, the PR group with operations in more than 21 countries, look set for an upturn.

Following an uncertain start in January, Huntsworth's share price rose to a six-month high of 98p in February. This coincided with the disposal of US-based Citigate Sard Veribinem, and the acquisition of Eurotandem, the French PR consultancy group, as Huntsworth moved to focus on Europe.

The company's fortunes have been given a further boost by a positive trading statement on Tuesday. Huntsworth said organic growth for the first half of the year would be 5 per cent - ahead of analysts' forecasts of 3 per cent - and that it was well placed to meet its profit margin target of 20 per cent for 2007. The group added that it had secured £25m of new business so far this year.

Kepler Teather & Greenwood Merrion, the broker, last week reiterated its "buy" recommendation and set a price target for the shares of 124p, compared with the closing price on Friday of just 93.5p. Buy.

[markie7] 15/6/2006 21:29

oversold?

read evolutions note on this - estimate of 95p, but on a PE ratio of 14.5.

14.5 is too high in my view - lets call it 12, which is where the rest of the sector is (more or less) - gets you to around 80p fair value.

the eps numbers in there assume nil contribution from Sard Verbinnen, which is the correct way to look at it.

anything higher than that is believing the spin.

[laddi] 15/6/2006 21:12

Nice move today from oversold levels...I see that Fidelity/JP Morgan have acquired stock in the last couple of days to increase their holdings to 4.44%

[whealan] 18/5/2006 17:03

Spot on cue. 1/2m bought this afternoon at 88.5, the mid-point of the apparent support range.

Looking at all the tiny sales, who on earth thinks it appropriate to have £1000 worth of shares in Huntsworth or for that matter, any company?? It must surely still be ex-employee stuff?

[whealan] 17/5/2006 10:36

Yes, there does seem to be a sort of floor at around the 87/90 mark.

Large trades yesterday - millions - labelled WT which my level 2 help says is "Worked Principal Trade". According to Google, "a Worked Principal Agreement is one between institutional investors and broker dealers, acting as principals, to trade blocks of shares larger than 8 times normal market size at a limit price and size. The broker dealer must attempt to improve the price and/or size before the transaction is executed. The agreement is reported to the LSE but the terms are not published. The trade must be executed either by the end of the working day or when the broker dealer has found counter parties for 80% of the value of the trade, whichever is the earlier. The terms of the trade are published immediately it is executed."

2m were put through at 92.5, above the offer price, so one must assume it was a buy order being fulfilled. It will be interesting to see if there is an RNS in the next day or two.

[jimcar] 16/5/2006 16:17

Oxman
I think everyone had forgotten about it but now your post has pushed it down 1p!

[its the oxman] 16/5/2006 15:43

hnt at 92p remains oddly resilient in face of the stock market fall out - reasons anyone?

[whealan] 05/5/2006 15:09

ITO

Maybe these small sales are not well managed after all. A continual dribble of small (eg employee) sales will always drag the price down. But it really doesn't matter unless one is trying to trade these. The capital is substantially tied up with institutions and management and the real price will manifest itself when a major corporate transaction takes place. The group as it now stands needs a year to settle down and show what it can achieve. And then.....

[its the oxman] 05/5/2006 09:29

frustrating that we can't seem to hold above 90p

[whealan] 04/5/2006 16:56

Where on earth are all these tiny sales coming from? They look like ex Incepta Group employee options vesting or something like that. At least it is well managed if they are, rather than having them dribble out continually, depressing the price.

[welsheagle] 27/4/2006 20:47

Director E.Beard bought 73,000 shares today.

[markie7] 27/4/2006 17:20

ok - I was wrong about CSV - that comes out in 2007.

but try to get to £21m from the results, and work out the growth rate required....

[whealan] 27/4/2006 12:49

A speck of blue in a sea of red!

I have now got the analysts notes from Evolution and from Numis.

They are not very illuminating but Evolution's estimate of 2006 pbt is £21.0m on t/o of 139.9 with eps of 7.2p and a current forward p/e (@91p) of 12.6. They value the shares at a p/e of 14.5 which would give according to my own pro-rating a target price of 105p They have changed from "reduce" to "add" with a stated target of 93p(why?)

Numis estimate 2006 pbt at £20.5 with eps of 7.2p. They rate it a "buy" with a target price of 132p."We are disappointed that H has yet to participate in the recent marcoms rally and believe that on a 2006 p/e of just 12.5 the shares represent excellent value".

[whealan] 26/4/2006 08:28

Markie 7

Don,t know how they get to it as I haven't seen the research. I will ask my broker for it this morning. The Sard Verbinnen "disposal" doesn't kick in of course until 2007, at a 51% reduction, but I don't know how they will account for it after that and don't expect to see a profit contribution from it after writedown of carrying cost. There's a full year's cost savings too and the substantial reduction in interest from the sales to Mediasquare reducing debt and so on, but let's see.

[markie7] 24/4/2006 21:17

£20.5m?

they have only done £12.9m this year (from continuing ops)

Now - I know Incepta is only in for 8 mths, but lets assume thats another £3m on top for 2006 (generous for sure). All that is left of Incepta is Citigate, RED (both excellent agencies), and some small scale European stuff. - the rest has been flogged, or quit.

and the £12m includes full contribution from Sard Verbinnen (who all resigned - so got an MBO on the cheap) - so knock off £3m (50% of £6m).

they've bought that french agency - so lets add another £1m on, maybe.

but then, they've said that 2006 is ahead of market expectations....


happy to be corrected here...

[welsheagle] 24/4/2006 20:42

Thanks Whealan - Demonstrates that information cannot be taken at face value.

[whealan] 24/4/2006 12:53

ITO

See Citywire article on separate thread. Numis are apparently forecasting £20.5m for 2006 and £22.5m for 2007 which according to my calculations, assuming no change in issued shares and a 30% tax rate, would give eps of around 7.5p and 8.25p respectively, up from 5.7p last year but check my calculations and ADYOR. IMHO etc etc

Welsheagle

The Citywire tip in 2004 @ 23p was of course pre-consolidation. Equates to 115p now I think. So not quite so prescient as they are patting themselves on the back for - at least not quite yet.

[its the oxman] 23/4/2006 20:25

new eps forecasts anyone?

[laddi] 21/4/2006 09:35

PR group Huntsworth (LSE: HNT.L - news) trades at 12.5 times forward earnings and the shares offer good value. They stand at quite a steep discount to its rival Chime Communications (LSE: CHW.L - news) , which is unwarranted, and should be bought says the Independent.

[welsheagle] 20/4/2006 20:14

Like them or loathe them but it looks as if spin doctors are here to stay. Research carried out on behalf of quoted public relations group Huntsworth sees continued growth in the sector until 2010 at least.

That is just as well because Huntsworth (HNT), run by Lord Chadlington who made his first fortune at city PR firm Shandwick, has been on an acquisition spree taking over rivals including Citigate Dewe Rogerson, Grayling and Hudson Sander.

Tipped by Citywire at 23p in September 2004, the shares are currently 91p, valuing the business at nearly £180 million.

Following full year results showing continuing revenue fuelled by acquisitions up from £42 million to £108 million, broker Numis set a target price of 132p on the shares.

Year on year comparisons are tricky as 2005 include eight months contribution from the Incepta public relations group, with which it merged last April, as well as a contribution from a marketing services operation, sold in November.

[whealan] 20/4/2006 18:26

Citywire tipped them at 23p in Sept 2004 it is true, but that is 115p post consolidation! Nonetheless the forecast profits look most promising. It needs an analyst with a cold towel to work out the effect of all the purchases and disposals, not least Citigate Sard Verbinnen if indeed we can find out how they are going to account for future profits. Happy to leave it to the experts for the moment and see if they comment in detail.

[laddi] 20/4/2006 13:42

Hungry Huntsworth strives for more growth




Published: 11:55 Thursday 20 April 2006
By: Cliff Feltham, Companies Correspondent

Like them or loathe them but it looks as if spin doctors are here to stay. Research carried out on behalf of quoted public relations group Huntsworth sees continued growth in the sector until 2010 at least.

That is just as well because Huntsworth (HNT), run by Lord Chadlington who made his first fortune at city PR firm Shandwick, has been on an acquisition spree taking over rivals including Citigate Dewe Rogerson, Grayling and Hudson Sander.

Tipped by Citywire at 23p in September 2004, the shares are currently 91p, valuing the business at nearly £180 million.

Following full year results showing continuing revenue fuelled by acquisitions up from £42 million to £108 million, broker Numis set a target price of 132p on the shares.

Year on year comparisons are tricky as 2005 include eight months contribution from the Incepta public relations group, with which it merged last April, as well as a contribution from a marketing services operation, sold in November.
However, including trading profits from disposed businesses the pre-tax total emerges at £12.7 million, giving earnings per share of 5.9p. Full year dividends are 1.7p.
Brokers were encouraged by news that the 'momentum developed in 2005 has continued into 2006 and current trading indicates that Huntsworth is set to exceed market expectations for the half year.'
Lord Huntsworth - brother of former Tory farming minister John Gummer - wants all its businesses to be delivering margins of 20% by 2007 against 18.6% at present.
The group now has offices in 21 countries representing over 2,500 clients, among them household names such as Next, Diageo and Compass. The average fee paid by clients is £50,000 a year.
Chadlington said research carried out on its behalf showed growth of around 11% a year until at least 2010 with prospects most promising in China, India and Eastern Europe.
Numis is forecasting pre tax profits of £20.5 million rising to £22.5 million in 2007.

Citywire Verdict
Lord Chadlington is an old hand at building up a public relations empire and existing and new businesses are being set rigorous targets for growth, costs and margins. Around 44% of business is currently generated through its financial public relations arm, which is clearly benefiting from buoyant stock market conditions. The shares should have further to go.

[welsheagle] 20/4/2006 08:36

Huntsworth says made strong start to 2006, sees H1 exceeding market
expectations

LONDON (AFX) - PR group Huntsworth PLC said it made a strong start to the
current year and that it expects the first half to exceed market expectations as
it reported results for the full-year to end-dec 2005.
The period, which included eight months' contribution from Incepta which was
acquired last April 2005 and from marketing services businesses until divestment
in November, saw sales rise to 154.87 mln stg from 60.9 mln.
It made a pretax loss from continuing operations of 32.93 mln stg compared
with a 1.81 mln profit a year earlier.
Huntsworth plans to pay a final dividend of 1.2 pence per share which will
result in an increased total dividend of 1.7 pence, the highest dividend for its
shareholders for 15 years, the company said.
It won 17 mln stg of net revenues in the first quarter which will be
recognised in 2006.
"Operating margins to date for existing businesses have continued to improve
and we expect to reach our target of 20 per cent during 2007," Huntsworth added.

[whealan] 19/4/2006 15:02

ITO

It would also be nice to move above 124p, my long term averaged, diluted, consolidated cost. But I am full of confidence. Trust in Chadlington. If he thinks they were worth buying in bulk the other day, who am I, a mere mortal, to disagree.

Drink Eau de Pippleparrot and be the Baas ("The Passing Show", RDM 1950s for those who remember!)

[its the oxman] 19/4/2006 13:28

nice to move above 90p again - results tomorrow i believe - so fingers crossed