Ascential ups dividend as efforts to reshape business continue

Ascential posted a solid first set of annual results as a listed company, with the events organiser confirming a chunky dividend after growing underlying profits by almost a third but remaining in the red due to its publishing legacy business.

As it looks to sell off its 'heritage' Emap publishing brands, the FTSE 250 company's continuing business generated £299.6m of revenue, a 17% gain on the prior year thanks to the weak pound, or almost 10% at constant currencies.

Earnings before interest, tax, depreciation and amortisation of £95.9m grew 32% or 11.5% at constant currencies, with adjusted pro forma earnings per share of 15.5p, up 47.6%.

Including discontinued businesses revenues were up +5.6% and EBITDA 6.5% and the group made a loss before tax from continuing operations of £1.8m, which was down from £43.6m the year before.

With free cash flow after tax and capex of £90.9m and net debt cut to £233.7m from £382.3m, the board recommended a final dividend of 3.2p, bringing the total dividend to 4.7p for the year.

As well as the discontinuation of the legacy publishing brands, chief executive Duncan Painter has looked to "reshape" the group towards higher organic growth with the acquisition of One Click Retail to strengthen the e-commerce analytics offering across the fashion and consumer product industries in August.

The acquisition of MediaLink, which was announced after the year end, sees the addition of a long-time Cannes Lions' partner that Painter said "reinforces our digital advisory expertise to sectors not limited to the branded communication industry".

He said the growth rate was being driven by a policy of active portfolio management, with the launch of new products such as WGSN Insight, Money20/20 Europe and Lions Entertainment all contributing to growth and geographically diversifying the business.

"The new financial year has started well. Since the year end, Spring Fair, Bett London and Pure Spring have taken place and performed overall in line with our expectations.

"While still early in 2017, we are encouraged by the current level of forward bookings and are confident of another good year of growth for the group."

House broker Numis has pushed up its estimates, seeing an expected PBT of £90.8m and EPS of 17p in 2017 for continuing operations, rising to £102.9m and 18.7p in 2018.

Net debt is expected to fall to £215.1m this year and £160m in 2018.

Shares in Ascential rose initially on Monday but by 0945 GMT were in the red, down 0.8% at 303.69p.