Communications and sports marketing group Chime Communications (CHW) gains 3.6% to 320p as it announces a significant bump in pre-tax profit from £590,000 to £9.6 million. The company enjoyed a boost from the football World Cup, Commonwealth Games and Winter Olympics.

The strong operational performance overshadows a warning of the need for an 'adjustment' to guidance if the pound remains strong relative to the Brazilian real and US dollar.

Looking at the numbers in more detail Chime reports operating income growth of 26% to £97.6 million,? operating profit growth of 50% to £17.2 million and an?operating profit margin of 17.6% up from 14.8%.

Beyond the headline numbers there were also encouraging signs in the group's key performance indicators. Average fee per client was £73,000, against £57,000 in the first half of 2013. The largest client represented 9.2% of total income in the first half compared with the same period in 2013. Top 30 clients represented 43% of total income in the first half of 2014 compared to 46% in the first half of 2013.

CHIME COMMS - Comparison Line Chart (Rebased to first)

The results get a positive response from analysts across the board. Peel Hunt moves from hold to buy off the back of today's announcement and reiterates its 370p price target.

Analyst Malcolm Morgan comments: 'The results were pretty much as expected, with underlying revenue growth of 8% and profit growth of 25%. The dividend was usefully increased by 15%. Net debt was again impacted by working capital and now stands at £46.5 million. The company confirms that it has started to negotiate Olympic contracts, which we see as very positive for sentiment.'

Numis stays at buy with a more bullish price target of 438p. 'The group has a strong pipeline for 2015 (Rugby World Cup, Ashes and Cricket World Cup) while 2016 will see the quadrennial boost from the Rio Olympics and Euro 2016 Championship,' the broker says. 'After a strong 2013, the shares have fallen -15% from their January high and in our view look compelling value at under 12x earnings given the robust momentum across the group.'

Investec also retains its buy take and 395p target noting the company is unlikely to be distracted by M&A despite speculation linking it with a bid for peer Huntsworth (HNT). 'The trading message and outlook comment is good, underpinning momentum and importantly we do not see Chime as interested in Huntsworth.'

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Issue Date: 27 Aug 2014