BREAKUP?12 Aug 2014 12:52
But analysts at Peel Hunt are more interested in what the exit of Lord Chadlington means. "We expect the market will start to speculate on the breakup of Huntsworth, post Lord Chadlington’s departure," says the broker.
A 20% stake in Huntsworth taken by Chinese PR giant Blue Focus with whom the UK firm subsequently set up a joint venture in Asia certainly adds spice. So, too, does the 3% stake, now worth almost £5 million, acquired by canny investor Matthew Freud. Chairman Lord Myners is confident. He bought 100,000 shares at 46p each after Monday's news.
Peel Hunt has placed its forecast and target price under review. "Once the speculation has faded the company will still face important structural issues," it says. It will indeed.
Elsewhere, Numis Securities has cut forecasts for this year by 15%, and now expects adjusted pre-tax profit of £15 million, giving adjusted earnings per share of 4p. At 51p, Huntsworth shares trade on almost 13 times forward earnings, dropping to just over 11 in 2015. Numis still reckons the shares are "materially undervalued" and sticks with its 60p target price.
There's that dividend, too. Huntsworth kept the interim payout at 1p and there's a prospective dividend yield of 7.4%. Quite what the new boss will think of that level of payout, however, remains to be seen.