Weak advertising performance and the proposed sale of its business-to-consumer Home Interest unit puts Centaur Media (CAU) on the back foot.

The shares are down 12.7% to 40.25p, paring earlier heavier losses, as 2016 results alongside reveal strong momentum in the events and digital premium information divisions, up 10% and 19% respectively on an underlying basis held back by a 10% decline in advertising revenue.

Adjusted operating profit is down from £10.5m to £9.1m with the operating margin slipping from 14.9% to 12.6%.

CAU

GLOOMY OUTLOOK

The dividend is unchanged at 3p although a fall in high margin ad revenue will see 2017 profit fall - a situation the company says will reverse in 2018.

The Home Interest portfolio consists of three key brands; Homebuilding & Renovating, Period Living and Real Homes, and comprises seven market leading exhibitions, print and digital assets. It generated revenue of £12.9m and earnings of £4.9m in 2016.

N+1 Singer analyst Jonathan Barrett says: ‘While revenues should grow 5% in 2017 the mix effect means that we expect 2017 earnings per share (EPS) expectations to drop by circa 28%, leaving the stock on a PE of 11.8-times and a yield of 6.5%. The shares were already factoring in a tough first half. We put our forecasts, target price and rating pending formal changes’

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJBell logo

Issue Date: 29 Mar 2017