TV firm reveals 26% profits push
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'WE'RE making more programmes in more genres for more broadcasters than ever before', said David Frank, chief executive of RDF Media, the acquisitive TV production play that floated on Aim in May 2005.
His words accompanied strong maiden full year figures to January, showing profits before float costs beamed 26% higher to £5.3m on turnover up 23% to £59.5m on the back of buoyant rights sales and acquisitions. Year-end cash was a reassuring £2.7m.
RDF, which continues to foster strong ties with the BBC, and has a close relationship with Channel 4, has made four acquisitions since float, including IWC Media, which made RDF the biggest independent producer in Scotland (a savvy move given that broadcasters are under pressure to commission programming from outside London) and Presentable, which brought capacity in Wales as well as a foothold in the market for gaming-based programming.
This year, the City expects pre-tax profits of £8m from a top line £92.8m, giving earnings of 14.2p and placing the 199p shares on an undemanding forward price-to-earnings ratio of 14.
Recommendation: Buy
Sutton Harbour over sold
Shares in transport and regeneration counter Sutton Harbour have fallen back from a 52-week peak of 302p to 252½p, although the good times continue to roll in terms of its financials.
Managing director Nigel Godefroy unveiled record results for the year to March, which revealed pre-tax profits powering 44% higher to £3.4m, and dividends lifted almost 19% to 3.8p. Godefroy flagged up profits growth in regeneration, including property development, investment and estate management.
Rentals will accrue this year from a completed 57,000 square foot office building in Plymouth for the Department for Works and Pensions, and other schemes to the east of the harbour are at advanced planning stages. Furthermore, the first slug of healthcare facility developments in Plymouth (through 37.2%-owned ReSound) is almost complete, and Sutton Harbour is bidding for other public/private partnerships around the country.
Air Southwest, which runs services to Gatwick, Manchester, Jersey and Bristol, provides a slightly bumpier ride. New routes introduced in 2005 – to Leeds and Dublin – have proved popular, though it is too early to call the success of even more recently launched routes, which have a cost and will take time to bed down. As management predicted Air Southwest enjoyed a sharp profits spike over the summer but suffered a winter slowdown and higher fuel costs.
Sutton Harbour has now scored a decade of incremental profits growth, and continues to offer a neat balance between steady and riskier growth, which it expects to deliver at a more modest pace this year. The shares look a buy following recent weakness.
Recommendation: Buy
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Hargreaves gains ground
County Durham-based Hargreaves Services, involved in mineral trading, coke production, waste handling and specialist bulk road haulage, pulled in £20m of fresh cash through an oversubscribed 243p float in November.
Already trading at a bumper premium, the shares gained further ground this week following the £2.1m acquisition of bulk liquid transport concern Gilbraith, which chief executive Gordon Banham says is long established, based in the North West, and boasts a 48-strong tanker fleet.
As well as its handsome reputation and client base, Gilbraith extends Hargreaves' geographic coverage by adding a 'dedicated' North West depot to its Midlands base. Hargreaves has the UK's biggest bulk delivery fleet and is the largest independent importer of domestic and industrial coal.
Banham recently unveiled a 50:50 joint venture with UK Coal – known as Coal 4 Energy – to market and distribute product to the light industrial and domestic market. The mix of UK Coal's productive capacity and Hargreaves' logistics and marketing skills should help the joint venture meet demand more efficiently, ultimately benefiting consumers. A year ago, Hargreaves bought the Monckton Coke & Chemical Company, owned by UK Coal for over a decade.
At the interim, profits boiled up from £1.25m to £3m on 104% turnover growth to £70.8m. For the year to May, analysts have set their stall out for normalised pre-tax profits of £6.6m from a top line £150m, producing earnings of 19.5p and placing the 387p shares on a full looking forward price-to-earnings ratio of 19.8. But the shares are worth holding on Hargreaves' long-term earnings visibility in growth markets which analysts consider relatively recession proof.
Recommendation: Hold
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