22nd Apr 2015 08:02
LONDON (Alliance News) - Marketing communications firm Creston PLC said Wednesday it has acquired a 51% stake in London digital design and development consultancy How Splendid Ltd, and expects to post full-year results in line with market consensus.
Creston said it expects to post revenue of GBP76.9 million for the year to end-March, up from GBP74.9 million a year before.
According to consensus forecasts from four analysts provided by Morningstar, Creston is expected to post a full-year pretax profit of GBP9.9 million.
Creston will pay an initial cash sum of GBP8.7 million for the shares in How Splendid, funded from its existing cash resources. A further payment of up to GBP7 million will be paid in June 2017 dependent on the company's average profit before interest and tax between this month and March 2017.
For the remaining shares in How Splendid, Creston will have a call option over 24% from April 2017 for a value of up to GBP8.6 million, and the remaining 25% from April 2019 for up to GBP11.9 million.
How Splendid posted a pretax profit of GBP1.2 million on revenue of GBP4.0 million for the year to end-March.
"Splendid is an excellent business which enhances our Creston Unlimited offer perfectly. As part of Creston Unlimited, Splendid's consultancy expertise, which focuses on evolving the way brands do business in the digital world, will complement the group's marketing communications strength and further evolve our compelling integrated digital services capability," said Creston Chief Executive Barrie Brien in a statement.
The company will announce its full-year results June 9.
Shares in Creston are trading up 2.1% at 121.00 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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