News blog

Tangent Communications

• BY: Andrew Hore |
• POSTED: 21/08/2014 |

Print and digital communications services provider Tangent Communications says that a poor performance from digital agency Tangent Snowball will lead to a shortfall in interim profit expectations.

In the most recent results Tangent talked about new ways of generating revenues from the agency business but these do not appear to have made much difference. The agency generated a profit before central costs of £1.05m last year. Last year’s first half contribution was £626,000 and in the latest six months it will slump by £450,000 on revenues one-fifth lower at £4.5m. Two clients cut their budgets and redundancies will cost £250,000.

The core online print business is expected to increase revenues by 10% to £8.7m with most of the growth coming from printed.com. Adding photography to the service will boost second half revenues.

At 7.5p a share, down 1.75p, Tangent is valued at £20.8m. Underlying profit for the year to February 2015 is expected to be similar to the 2013-14 outcome of £2.33m. Net cash is expected to fall from £2.81m to £2.5m, although this is partly due to buying back shares. The shares are trading on 12 times prospective 2014-15 earnings and the yield is 3.2%.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFAugust2014_59.pdf