10th Mar 2015 11:55
LONDON (Alliance News) - St Ives PLC saw its shares slide Tuesday as it reported a lower pretax profit for the first half of it financial year as a result of an impairment charge related to a higher level of customer churn in its field marketing business and deferred considerations due to previous acquisitions it has made.
The marketing services company reported a pretax profit of GBP2.3 million for the 26 weeks to January 30, down from GBP6.2 million in the 26 weeks to January 30, 2014, when it had also been buoyed by a GBP1.07 million gain on the disposal of a subsidiary. It booked an impairment of nearly GBP1.5 million during the most recent half and a GBP3.1 million remeasurement of deferred considerations for acquisitions it has previously made.
It didn't go into detail about a GBP1.2 million impairment for a higher level of customer churn in the field marketing business, saying only that it was continuing to face pressure in the grocery retail market.
Excluding one-off items, the company's pretax profit rose to GBP14.9 million, from GBP12.9 million, as revenue rose to GBP175.0 million from GBP164.8 million, buoyed by strong growth in its digital and consulting arms that more than offset a decline for the data unit.
"We have generated healthy revenue growth through increased collaboration between our businesses, further investment in new service offerings and, of course, through the continued entrepreneurial drive of our individual management teams," Chief Executive Matt Armitage said in a statement as the company said over 90 of its clients were now working with more than one group businesss.
It declared an interim dividend of 2.25 pence, up from 2.15p a year earlier.
"Trading in the second half has started well and in line with our expectations and, with an improving economic climate allowing clients to increase their marketing spend, we remain confident of a positive outcome for the full year," Armitage said in a statement.
However, that wasn't enough to prevent its share price dropping 11.3% to 166.47 pence Tuesday morning, its lowest level since December 30, 2013.
By Steve McGrath; [email protected]; @stevemcgrath1
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