Smaller Companies: Adscene's bad news is over
Sunday 14 September 1997
The problems were concentrated in its printing division, where management problems emerged after an abortive MBO last year. That was followed by the departure of its directors.
Despite management upheavals - the group was without a finance director for a lengthy period - the core issue to confront the chairman and chief executive, Harry Lambert, is where future growth can come from. At this point, the business cycle as it affects newspapers is favourable. Advertising revenues, he said, are "comfortably ahead" in the first three months. Newsprint prices have passed their peak, and there may be the prospect of improving rates for the contract print division.
But the publishing side has the most bearing on prospects at the group. At the end of 1995, Adscene shelled out pounds 19.5m for the Tamworth Herald group of newspapers in the Midlands, and pounds 9.5m to buy 13 titles in Kent from Emap. The two purchases have now been fully integrated, and in Kent especially the resultant mix of paid-for and free sheets gives the group greater clout with advertisers. Nevertheless, the dilution from the deal, funded by a pounds 24m share placing, was a big factor in the slippage in earnings per share. The criticism was also made that the group had bitten off more than it could chew.
The future strategy remains the same: to develop in a region a mix of paid-for and free sheets, creating a more dominant local presence. But there are limited prospects for more acquisitions, as Mr Lambert acknowledges. So in the short term the question is what sort of improvement can be expected from the existing business. If exceptionals are stripped out, and allowing for continued growth in publishing, it is reasonable to see profits recovering to just over pounds 6m, without much improvement in printing. Earnings could reach 13-14p to leave the shares, at 120p, trading on a multiple of nine.
A "for sale" sign still hangs over the printing division, but Mr Lambert is in no rush to sell and there are no bidders at the moment. With the recent upheavals seemingly out of the way the shares look to offer decent value, while on the track record of the business the downturn should be seen as a one-off.
- 1 Students heading off to 'charity challenge' grounded at Gatwick after travel firm goes bust
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 5 Like Jennifer Aniston, I am no less of a woman because I am childless
Ashya King missing: Police hunt five-year-old boy with brain tumour snatched from Southampton hospital by his parents
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
Californian drought is so severe it's 'causing the ground to move'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...
£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...