Investors in business publisher Centaur Media (CAU) have been left hanging after a shock profit warning and departure of the group’s chief executive officer (CEO) Geoff Wilmot, the architect of its turnaround plan.
The £48 million cap fell 29% in early trade to 33.5p on news that full-year results to the end of next month would fall short of expectations. Advertising revenues connected to the group’s print financial titles look set to be particularly poor in May and June but the real shock was the worse-than-expected performance of the group’s recently-acquired digital assets.
Wilmot unveiled his two-stage restructuring in June 2011 which began with a series of cuts and rationalisation of the print stable and was followed up with a rapid-fire series of acquisitions. Between July 2011 and July 2012 it acquired five companies, the most recent of which being Econsultancy, a provider of services to the digital marketing industry.
News in the update that Econsultancy’s overseas operations had incurred losses, primarily as a result of corporate training contracts being deferred into 2014, was therefore quite worrying and possibly sealed Wilmot’s fate.
A classic value play, trading on a very lowly price/earnings(PE) ratio, analysts at Numis continue to rate the stock a ‘buy’. On the house broker’s reduced earnings per share forecast for 2013 of 4.3p (previously 5.4p), the company trades on a PE of 7.8 but some might fear this latent value might not be realised until the newsflow improves.
If there are any potential further shocks to come then it is likely that a new incoming CEO will want to get any potential additional bad news out in the open. Finance director Mark Kerswell will become the interim CEO.