17th Jun 2014 08:23
LONDON (Alliance News) - Media services group Avesco Group PLC saw its shares rise Tuesday despite the company saying it swung to a loss in the first half of the year with broadly flat revenues, as it said that its full year results are likely to exceed its expectations.
Avesco Group shares were up 16% at 112.40 pence Tuesday morning.
The group, which provides services for live events, posted a pretax loss of GBP1.1 million for the six months ended March 31, compared with a pretax profit of GBP1.9 million the prior year.
Avesco said it swung to a loss in the period largely due to hefty restructuring costs amounting to GBP5.0 million, relating to the restructuring of its struggling creative technology business in Germany.
Revenues in the period were marginally lower at GBP65.4 million, compared with GBP65.9 million a year earlier, due the the lack of a major event.
However, Avesco said that trading is currently ahead of plan and is confident of its outlook for the remainder of the year. Underpinning its confident, the company raised its interim dividend to 1.5 pence, up from 1.0 pence for the prior six month period.
"Trading in the six months to 31 March 2014 has exceeded our expectations and the outlook for the final six months of the financial year is similarly encouraging with some major sporting events due to take place in the second half, including the World Cup in Brazil and the 2014 Ryder Cup," said Chairman Richard Murray in a statement.
Avesco has just completed the restructuring of its loss-making businesses in Europe. The company said that having increased the focus of equipment in fewer locations, it has seen overhead savings and improved gross margin. It also said it has renewed its bank facilities on improved terms.
"We believe that the difficult steps we have taken in the period to eliminate or restructure those businesses that have been a drag on the group's performance will leave us in good stead to produce more stable and less volatile trading results," said Murray.
During the period, Avesco said it completed two significant transactions funded by its share of the proceeds of the Disney litigation, including the buy-back of 7.6 million of the company's shares from Taya Communications Ltd for GBP9.4 million, reducing Taya's holding to 1.09%.
In March 2013, Avesco received a GBP45.7 million share of a USD319 million settlement with Walt Disney Co related to litigation in the US brought by Celador International Ltd. against Walt Disney and others over the US profits from the TV show 'Who Wants To Be A Millionaire?'.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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