Motivcom undone by events

Employee benefits and corporate events management firm Motivcom saw its shares lose almost one-sixth of their value after it issued a profit warning along with its interim figures, but the company is confident that revised market expectations for the full-year are achievable.House broker Numis Securities has cut its full-year profit before tax forecast from £5.0m to £3.8m, a level tacitly endorsed by Moticom's management."We've been downgraded by Numis," noted Sue Hocken, the group's financial director. "We have set the [full-year] forecast at a cautious level, and we have no wish to revisit it," Hocken told Sharecast.The problem with the company's interim results was not so much the half-year figures as the outlook for the second half.Revenue in the first half of 2011 rose to £52.6m from £47.3m but headline profit before tax slumped by 39% to £1.5m from £2.5m last year, though the company always knew it would be hard to match last year's performance."We had a terrific 2010, it was like two years in one," John Sylvester, the executive director of Motivcom's Motivation and Incentive Services division told Sharecast, noting that last year presented a big bounce back from a poor 2009, and was boosted by the commercial opportunities offered by the FIFA World Cup."We were hoping for some modest growth in 2011, but it has swung right back down," he added.One area of the group's business, that of finding venues for conferences and meetings, is regarded as a good indicator of business sentiment, and after tailing off as usual in the summer it has "just not seen that return we were expecting," Sylvester admitted."It's been a tough year. We have been hit by a dip in the events market that we had not anticipated, but we are reacting to it," Sylvester maintained.The good news is that the company is cash generative, has a cash pile of some £7.2m, up from £5.0m the year before, and therefore has the money to continue investing in its strategy."We will not be diverted from our strategy and we will continue to invest in the business," Sylvester proclaimed.Hocken chipped in with the information that the money is there for a small to medium acquisition as well, should the opportunity present itself.In the meantime, the interim dividend has been increased by 15% to 1.15p from 1p last year, as a sign of confidence in the future.--jh