Marketing services provider Hasgrove moved into profit in the first half of 2012 but it should make much more profit in the second half and pay a significant dividend.
Revenues increased 16% to £12.2m in the first half of 2012. Underlying interim profit fell from £713,000 to £687,000 although this represents an improvement on breakeven in the second half of 2011.
Marketing and technology company Amaze is the largest business following last year’s group restructuring and it is winning new business following a poor second half to 2011. Intelligent intranet software provider Interact has won its first US contracts. Design consultancy The Chase had a poor start to the year because of delayed spending by major clients.
Net debt was reduced from £1.5m to £1m in the six months to June 2012. Since then a further £300,000 has been received for last year’s disposal of Interel. There could be a further £400,000 of deferred consideration.
Hasgrove is confident that it will be able to meet the Peel Hunt forecast of a £1.3m profit in 2012. At 37.5p a share, Hasgrove is valued at £9m.
The shares are trading on less than ten times prospective 2012 earnings, while a forecast 2.5p a share dividend provides a yield of 6.7%.
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