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Bit of a tick up this morning probably on the back of WPP results. Unfortunately Creston's shares unlike that of WPP will never trade on a PE of 17. Good to see the spread close though this morning on only a small volume. Also good to see Rivaldo updating this board with relevant Creston news particularly as I have given up on these with respect to my holding for the time being.
News - CRE's Health Unlimited form a partnership with a social network used by 40 million people every year: Http://www.pmlive.com/pharma_news/health_unlimited_forms_partnership_with_healthunlocked_1097433 "Health Unlimited forms partnership with HealthUnlocked Aims to drive organic and new business for the agency and social network Health Unlimited has formed a partnership with HealthUnlocked, the world's largest social network dedicated to health, to bolster its consumer insight and engagement services. The UK-based marketing communications group said the tie-up would drive organic and new business for both sides and enable clients to access best practice patient recruitment, retention and engagement programmes. HealthUnlocked is used by more than 40 million people each year and has over 600 health-specific online communities, which are owned and moderated by patient organisations across the world. Nicky Walsby, executive director of Health Unlimited, said: “HealthUnlocked occupy a unique space in the healthcare market. The importance of direct-to-patient engagement will only increase as market access challenges continue to prevail, particularly in the costly chronic diseases area. “Patients want to be engaged in decisions affecting their care in a timely and authentic manner. Our partnership with HealthUnlocked will support our strategy to build a best in healthcare consumer engagement capability that delivers real value for people living with any healthcare condition.” Health Unlimited, which is part of the Creston Unlimited group, said the partnership would also create referral opportunities for HealthUnlocked across other areas of its parent company's operations. And it noted that the London-based social network is already working closely with Creston's full service market research agency ICM Unlimited. etc"
Http://www.edisoninvestmentresearch.com/research/report/creston17/preview/ They go for: this year : 12.1p EPS, 4.6p dividend next year : 12.3p EPS, 4.8p dividend They also have CRE with a £4.2m cash pile at this year end, moving up to £7m the next year end: "Creston’s full year results exceeded the expectations that had been set in January, with constant currency like-for-like revenues and headline PBT flat on the prior year. The group is making good progress in leveraging its Unlimited group branding, with an increasing number of clients working with several group agencies. Good cash conversion has led to a higher year-end cash position – there is no debt, enabling a progressive dividend (up 5% year-on-year) on a yield well ahead of sector and market. The shares trade on an unjustifiably large discount to peers and market." "Valuation: Substantial discount When compared with agency peers, Creston’s shares are trading on a discount of over 50% on an annualised 2016 EV/EBITDA basis at 4.5x. A DCF under varying conservative assumptions on WACC and terminal growth rates also indicates a share price in a range of 120p to 130p. With a (comfortably covered) dividend, the yield is well in excess of market and sector levels. DBAY Advisors, represented on the board since February by Iain Ferguson (ex-Havas), has taken advantage of the lower price and increased its shareholding to 28.1%."
CRE's agency Fever win more long-term work from Sony today.... Http://www.prweek.com/article/1397943/sony-playstation-hands-emea-pr-controls-fever "Sony PlayStation hands EMEA PR controls to Fever Added 2 hours ago by Sam Burne James Fever - which already handled UK PR for Sony's gaming range PlayStation - has been appointed to represent the brand across EMEA as its retained agency." "One of Fever's first roles will be publicising PlayStation VR – a new virtual reality system that will launch in October. The agency described the contract as "long-term". Sony Computer Entertainment Europe comms director David Wilson said: "With Fever …"
Liberum say Buy with a 170p target - here's a brief extract: Http://www.***************************/creston-plc-89-9-potential-upside-indicated-liberum-capital/412703731 ""Creston reported FY prelims this morning with headlines that exceeded revised expectations with the exception of revenues that were in line. Solid cash generation led to a 5% dividend increase to 4.4p and shows that the immediate actions taken by management on the back of a more challenging Q4 were fruitful."
Holdings RNS just out - Artemis have bought another 535,000 shares in CRE. They now own 9.18m shares, or 15.64%. Together with DBay they now own almost 44% of CRE..... Http://www.investegate.co.uk/creston-plc--cre-/rns/holding-s--in-company/201606081126066082A/
The results are pretty decent imo considering the slow H1 with only 4.98p EPS. H2 produced 7.04p EPS, which annualised would bring over 14p EPS. The most recent forecast for this year is consensus 12.08p EPS, with a 4.4p dividend. That's a P/E of just 7.7 and a 4.7% divi yield at 93.5p. This H1 should be in line at worst imo given (1) the football Euros, (2) the US elections, (3) the Euro elections with ICM heavily involved, (4) the operating cost reductions introduced last year and (5) the new client wins last H2 in partiuclar, including Vodafone, Sony Mobile, BA, Weetabix etc where marketing campaigns should start to be implemented this year.
Results are out, and are ahead of expectations. The headline 12.04p EPS compares to forecast 11.3p EPS, and the 4.4p dividend is right at the top end of forecasts. The goodwill write-offs are non-cash and were already signalled. And CRE is now in net cash, with a £1.4m cash pile. Perhaps an acquisition or two to come. Incidentally, CRE's top 20 clients have an average 10 year retention rate (got my 10 and 20 mixed up earlier!) - highly impressive. The CEO says the business is in "good health", signalled by this paragraph: "Particularly positive is the growth in business from clients completely new to the Group and its agencies. These brands, which make up 63 per cent of the total annualised new business revenue, provide good opportunity for future growth. New business wins in the period include CRM strategy for the Vodafone Customer Value Marketing account, an appointment as Sony Mobile's global lead digital strategic agency, Creston Unlimited's appointment as British Airways' CRM and data strategy adviser, the local marketing of Bosch Home and Garden, and the CRM and digital strategy for Weetabix."
Results are next Wednesday, which we know will be in line with expectations and with a £1m cash pile. Consensus forecasts are: last year : 11.3p EPS, 4.2p dividend this year : 12.08p EPS, 4.4p dividend Given the average 20-year client retention rate, and the blue chip client base, I'm positive CRE will be taken over at some point. In the meantime the divi yield, cheap fundamentals and decent prospects for the year ahead (Euros, Olympics, US elections, Euro elections) mean I'm happy to hold.
Big kudos for CRE just announced Http://www.thedrum.com/news/2016/04/28/ipg-group-and-creston-named-holding-companies-year-rar-awards "28 April 2016 - 10:49pm | posted by Stephen Lepitak IPG Group and Creston named Holding Companies of the Year at RAR Awards InterPublic Group (IPG) and Creston have been named as the Holding Companies of the Year in their individual categories by the Recommended Agency Register (RAR) Awards 2016. IPG was named as Holding Company with £1bn + Turnover while Creston won the corresponding category with less than £1bn Turnover.... ...The RAR awards are based on client recommendations and reviews of their agencies, with satisfaction scores used as a measurement for success. Client ratings are collected for criteria such as creativity, effectiveness, strategic thinking, client service, etc. Said Steve Antoniewicz; MD of the RAR: “The response from agencies and brands this year has been incredible. The finalists and winners deserve huge credit for their achieving superb levels of performance and satisfaction for their clients. “These awards continue to be a real indicator of the most trusted agencies, not just in the UK but now internationally. Congratulations to everyone and special mention to our Grand Prix winners and to IPG and Creston who have proved a high level performance right across their groups.”"
L'Oreal are a pretty impressive new client, and it sounds like there may be more to come... Http://www.campaignlive.co.uk/article/tmw-unlimited-picks-loreal-briefs/1392158 "TMW Unlimited picks up L'Oréal briefs by Gurjit Degun April 21, 2016 L'Oréal, the beauty company, has appointed TMW Unlimited to handle its integrated ad business for three brands. TMW will work on the Clarisonic brand, which produces a range of facial cleansing brushes, and haircare brands Redken and Kératese. The agency has also won a place on the L’Oréal roster. There is no incumbent on the accounts. L’Oréal put a tender out for the brief in September last year. Agencies pitching for the business were impressed that the company offered them £5,000 for expenses."
Http://www.gorkana.com/2016/04/criteo-hands-uk-pr-brief-to-nelson-bostock-unlimited/ "Nelson Bostock Unlimited secures Criteo UK brief April 19, 2016/in Industry News /by Richard O'Donnell Global digital marketing company Criteo has appointed Nelson Bostock Unlimited as its UK PR agency, following a competitive pitch. Criteo currently works with more than 10,000 advertisers across 80 countries on “dynamically generated ads”, which are personalised with products and services that consumers are searching for. Nelson Bostock Unlimited has been briefed to enhance Criteo’s profile as a go-to thought leader for the digital marketing and advertising industries. Sarah-Anne Bray, PR Manager, UK and Northern Europe, at Criteo, said: “Criteo is a rapidly-growing company with market-leading technology, and we’re proud of the success we’ve achieved in an industry characterised by rapid change and consolidation. “In this environment it’s crucial that our PR partners have a deep understanding of our business and the competitive landscape, to help us cut through the noise and highlight the central role Criteo plays in the performance marketing space. “The Nelson Bostock Unlimited team impressed us with their wealth of experience in the advertising and marketing technology industry, as well as their creative ideas for helping us to engage with our UK audience.” Nick Clark, MD of Nelson Bostock Unlimited, added: “We’re incredibly excited to work with Criteo, a true market leader and global innovator. We’re looking forward to helping the company hone its story for the UK market, and solidify its position as an industry thought leader. This win is a real boost to our already strong portfolio of marketing, advertising and high-growth technology companies, demonstrating the depth of industry expertise our team has built over the years.”"
Good news today. The year end trading statement confirms trading in line with expectations of around 11.3p EPS - and a 4.2p dividend. With around consensus 12.1p EPS forecast for this year, CRE are on a P/E of just 8.7, with a 4% divi yield. Most importantly, the statement notes that clients' prospects have stabilised and improved.
It seems that the share price is being held within the current range probably for the benefit of DBAY whilst they mop up any share sales. Getting some what impatient whilst this plays itself out, as it would be nice to sell my holding although not at the current price.
DBay continue to buy and are up above 28% with 16.45m shares: Http://www.investegate.co.uk/creston-plc--cre-/rns/holding-s--in-company/201604130700089843U/ With Artemis now at almost 15% the two of them own 43% between them. I suspect some form of corporate action - including potentially a sale of the company - will follow at some point.
Another 1 million late reported trade from 6 April. Any guesses as to who may have acquired these - DBAY perhaps.
So DBAY have picked up another million shares increasing their holding to 27.91%. Probably explains the large number of sales of late without any apparent market purchases. Interesting to see what happens if they acquire another 2%, lets hope so.
Well this has taken quite a hit since the 160p peak 6 months ago and now seems to be drifting. Market conditions tough for CRE with business confidence not high, and brexit having a wide impact. I wouldnt buy now, so the logic for me at least is to sell -and use the loss to mitigate gains elsewhere, to avoid CGT at 28%. But I will keep on my watch list and check out any signs of life....
Picked up another 1% of Creston shares. Surely we must see some corporate action soon.
So Dbay Advisors have realised that their large investment in Creston is not performing according to expectations, hence their man Iain Ferguson joining the board with immediate effect as a non exec. Let's hope he can exact some value from Creston for the benefit of shareholders who have witnessed a roller coaster ride of late.
With DBay and Artemis now owning 40% between them I suspect CRE may become a bid target before too long given their fantastic - and longstanding - blue chip client base. Forecasts have now settled at consensus of: year ending soon (31/3): 11.1p EPS, 4.3p dividend next year : 11.95p EPS, 4.55p dividend News of a new partnership: Http://www.thedrum.com/news/2016/02/02/creston-agrees-partnership-ariadna-group-helping-it-grow-latam "2 February 2016 - 10:41am | posted by Stephen Lepitak Creston agrees partnership with Ariadna Group helping it grow into LatAm Creston Unlimited and Latin America-based Ariadna Holding Group have agreed a partnership to allow both to grow their international standing. The agreement between the two marketing communications groups will enable them to make the most of each other's local expertise for existing clients across the UK, US and Latin America, with joint pitches being enabled across global opportunities. Creston Unlimited, which owns agencies such as Nelson Bostock and TMW, shares major clients such as Diageo, Nissan, Toyota and Unilever with The Ariadna Group already. The pair also hold relationships with German network Serviceplan as well. Barrie Brien, chief executive of Creston’s Group, reiterated the partnership lets the company grow into the Latin American region and said that it was "thrilled". Juan David Pinzon, Ariadna Holding Group’s president and chief executive , added: “After a successful European partnership with Serviceplan, we’re extending our service offering across the UK and US with Creston Unlimited. As a specialist in Latin American marketing, this enables us to take our most successful campaign ideas global. With a similar dedication to unlocking the power of technology to meet client challenges, Creston Unlimited is the natural partner for Ariadna.” The Ariadna Group, which offers a range of marketing services such as creative, media, tech and strategy, was founded in 1999 and has 350 staff across 10 countries. Last week, Creston announced a number of new client wins within the group, including contracts with Vodafone, British Airways and Weetabix. "
RNS - Artemis have bought another 1.12m shares, and are now up to 8.64m, or 14.7%: Http://www.investegate.co.uk/creston-plc--cre-/rns/holding-s--in-company/201601281039202951N/ DBay and Artemis now own 40% of the shares between them. I just wonder if they'll begin to agitate for a sale of the company given the strength of their combined position.
Disappointing trading update. Nevertheless, the two latest forecasts post-update average at what will soon be a historic 11.1p EPS, with 11.95p EPS to March'17. The dividend yield of more than 4% should also nicely support the share price: 2016 2017 Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p) N+1 Singer 27-01-16 HOLD 9.50 10.90 4.40 10.17 11.50 4.70 Edison 27-01-16 None 9.50 11.30 4.20 10.50 12.40 4.40 Liberum have a new 150p target price (down from 170p): Http://zolmax.com/investing/liberum-capital-cuts-creston-plc-cre-price-target-to-gbx-170/347695/
Chief executive Barrie Brien said: "We continue to win an enviable list of new clients across the group, demonstrating the relevance of our Unlimited offer in the market place and representing a material increase to the wins last year. "We are disappointed to have been impacted in January by a combination of one-off circumstances specific to certain clients and a cautious outlook from others, but with the good progress against our strategy, the full year effect from our new client wins and operational efficiencies made earlier in the financial year, we are establishing a strong foundation for future growth."
Creston has warned that full year profits will be below last year's after several clients delayed or cut project spending due to increasing concerns about trading. As a result, fourth quarter revenues at the marketing communications group will fall "significantly" below management expectations. Creston said that "a number of clients, across multiple-industry sectors", with some relating to "increasing concerns that some of our clients have about the trading outlook for their businesses given the current uncertainty in the global economy". After 8% revenue growth in the first half, the third quarter has seen 11% growth, but the current quarter's anticipated decline will mean full year sales revenue are now expected to be up roughly 8% on the prior year to around £83m and flat if the impact of acquisitions is excluded. Group headline profit before tax and goodwill impairments is now estimated to be slightly below the prior year at £9.9m. Otherwise, the company was bullish about the considerable new business it had won in the third quarter, with the launch of the Creston Unlimited concept of inter-agency and partner cross-referrals "resonating with clients" and also contributing to an increased number of opportunities between Creston companies and its partners. New business wins in the period included the Vodafone Customer Value Marketing account, appointments as both Sony Mobile and McLaren's global lead digital strategy agency, Creston Unlimited's appointment as British Airways' CRM and data strategy adviser, the local marketing of Bosch Power Tools and the digital strategy for Weetabix.