Investment column: Incepta thinks big

PUBLIC relations firms are never backward at coming forward, especially when talking up their own fortunes, as David Wright, chief executive of Incepta, proved again yesterday.

Not only does he want to make Incepta, which owns the Citigate PR outfit, a global player. He envisages doubling its current market capitalisation in little more than a year and plans to quadruple it within three years through acquisitions in Europe and North America.

The group was formed a year ago by the reverse takeover of the existing marketing company by Citigate. So far everything has gone to plan. The group comfortably beat forecasts yesterday when it announced pre-tax profits of pounds 5.6m for the year to February.

Of course advertising, public relations and marketing are all cyclical businesses in competitive markets, where a group can grow very rapidly and equally quickly lose its way. But we are probably still some way off reaching the peak.

And the ambitious expansion plan looks sensible, given that only firms with critical mass and a complete range of services stand much chance of winning the lucrative accounts of international companies.

The company's broker, Beeson Gregory, yesterday increased its forecasts for the current year from pounds 6m to pounds 6.7m and looking for pounds 8.3m in the year to February 2000. The shares edged up 1.75p to 24.75p, yesterday. At 12 times forecast earnings, falling to 10 the year after, they are still cheap relative to rivals like WPP and Abbott Mead Vickers.