Bottom Line: MAI closes in on media target

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The Independent Online
FOR THE past two years, MAI's share rating has owed much to the expansion of its media empire. Yesterday's results suggest the business is at last beginning to catch up.

The pounds 8.7m contribution from media still pales into insignificance compared with the pounds 73.9m operating profits earned from retail and wholesale financial services.

None the less, the pounds 5m contribution from Anglia and TSMS was better than expected and the full impact of the cost-cutting has yet to come through. Together with the pounds 7m turnaround to a pounds 3.7m profit at Meridian, forecasts of a pounds 30m contribution from media this year do not look too ambitious.

That brings it closer to its target of earning 40 per cent of profits from media and information. Winning the Channel 5 franchise or taking over another Channel 3 would, however, speed that process dramatically.

The financial services cash cow, which meant liquid funds fell only about pounds 20m despite the pounds 160m spent on acquisitions, gives it headroom for such ambitions. Meanwhile, they are providing solid earnings growth.

On forecasts of about pounds 120m, the 13 times multiple leaves it roughly midway between media companies such as Carlton and moneybrokers like Exco. That could look cheap if it achieves its media ambitions.

(Graph omitted)