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Vitesse Media

  • BY: Andrew Hore |
  • POSTED: 13/10/2009 |

House broker Seymour Pierce has initiated coverage on Vitesse Media and it expects the financial information publisher and events organiser to break even in the year to January 2010.

Seymour Pierce praises management for the quick reduction in the Vitesse cost base and the broker expects the full benefit to show through in the second half of the financial year.

Seymour Pierce believes that online and print revenues should improve in the second half but events remains weak.

Revenues are forecast to drop from £5m to £3.9m but the loss of £500,000 reported in 2008-09 will be wiped out. The company should be cash neutral at the end of January 2010 helped by the sale of Smallbusiness.co.uk to the private interests of part of Vitesse’s management for £170,000. Vitesse has the right to buy back the website within the next three years for the same amount.

The business is highly operationally geared and Seymour Pierce believes that an improvement in revenues to £4.3m in the year to January 2011 should yield a profit of £400,000. That should also mean that Vitesse will have £500,000 in the bank by the end of January 2011. It may choose to use some of the cash to buy back Smallbusiness.co.uk.

At 12.25p a share, Vitesse is valued at £3.14m. The shares are trading on nine times prospective 20010-11 earnings.

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