Great new tip for CMS8 Mar 2016 11:10
....published in the Cambridge News this morning. Extract:
Cambridge News
March 08, 2016
Private Punter: Communisis investment could be a good call
While you cannot, so it is said, "have your cake and eat it", investors attempting to satisfy an appetite for both growth and income could perhaps do worse than take a bite of AIM -quoted Communisis. At a current 46p, this provider of personalised customer communication services offers an attractive mix of solid earnings appreciation prospects, backed up by an increasingly attractive progressive dividend.
And yet, despite delivering some strong numbers in its preliminary results last week, the shares trade on a single digit forward PER of little more than seven which, in turn, is supported by a yield nudging 5%. Although such seemingly cheap valuations can often imply a muddied forward picture, speaking with CEO Andy Blundell on the back of those results, it would appear Communisis is not only well placed to deliver in the near future, but also the medium-longer term. Communisis works with and for major blue chip clients across both the UK and continental Europe, where it is very much at the centre of multichannel marketing services and everything within that space. This sees the company operating three distinct aspects of its business, where each contributes to annual revenue that is now running in excess of £350m. They are Design, Produce and Deploy which collectively, via a whole raft of services, connect Communisis' numerous clients to their own existing and potentially new customers, further driving awareness and spend.
Communisis provides specialist tailor-made web services, to high volume digital printing, along with data intelligence through social networking and content management. However, despite last year delivering pre-tax profits of £14.5m and doubling of free cash flow to £12m, the shares are extremely cheap, trading at half the value of peers. Such apparent investor indifference to a seemingly stark value situation is no doubt in part due to a profits warning late last year, after an acquisition underperformed. This came in the form of Life, a shopping marketing consultancy which, having been acquired less than 12 months earlier, was revealed to be taking longer than envisaged to contribute to the wider group. But, Communisis was quick to renegotiate the earn-out agreement which, combined with the more important wider positive group prospects, may suggest that it really is only a matter of time before the shares benefit from an overdue re-rating...
...Broker Liberum sees net debt reducing to £32m for the current year, dropping to £24m by 2017. The same broker is also pencilling in revenue of £372m and adjusted pre-tax profits of £16.2m for the year in progress, increasing to £387m and £17.5m for 2017. Those numbers would deliver fully diluted EPS of 6p and 6.3p respectively, which sees the stock standing on a si
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