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Motivcom

  • BY: Andrew Hore |
  • POSTED: 02/10/2011 |

The first half of 2011 was a disappointment for incentives and events provider Motivcom. 

Events are highly operationally geared so a fall off in revenues can have a significant effect on profit. Events had a particularly strong recovery in 2010 and were behind the strong result last year. Events revenues improved but they did not match expectations and could not cover additional costs.

Revenue grew from £47.3m to £52.6m including an initial contribution from childcare vouchers business Allsave. The sales promotion business started the year well but did not have the expected repeat business from two clients. Brands are becoming more cautious about spending on promotions. Pre-tax profit fell from £2.35m to £1.28m.

Net cash was £7.2m at the end of June and since then £1.5m has been spent on the acquisition of Goldserve, which generates event enquiries and leads. Motivcom continues to increase its dividend. The interim was 15% higher at 1.15p a share and the full year total dividend is expected to be 3.68p a share.

Motivcom is still keen to make acquisitions. It has made two so far this year and believes that there are more realistic valuations and opportunities at the moment.

House broker Numis had expected an improvement on the 2010 profit of £4.7m but now forecasts a 2011 profit of £3. 8m.

At 69.5p a share, Motivcom is valued at £20.2m. The shares are trading on seven times 2011 prospective earnings. 

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