Ascential PLC (LON:ASCL) upped its final dividend for 2018 on Monday after its pre-tax profits for the year jumped over 40%.
The FTSE 250 business information and exhibitions specialist reported pre-tax profits for the year ended 31 December 2018 of £28.9mln, up 42% on the prior year, while revenues surged 9.6% on a proforma basis to £348.5mln.
READ: Ascential upgraded to ‘Buy’ by Berenberg after “positive deals” boost growth forecasts
The company said key drivers of its revenue growth were its sales and product design segments, which posted proforma increases of 30% and 7% respectively, offsetting a 6% decline in its marketing division.
As a result of the strong growth, the company increased its final dividend to 3.9p per share, up from 3.8p the year before, taking the full year dividend to 5.8p from 5.6p in 2017.
In its outlook, Ascential chief executive Duncan Painter said the company’s 2018 performance had been “supported by three high-growth acquisitions”, digital marketing business WARC, analytics firm Brand View, and managed services provider Flywheel Digital, using the proceeds from a £296mln disposal of its exhibitions business in July last year.
Going forward, Painter said the focus was now on “integrating our unique information services” and that the firm had taken action to return its marketing segment to growth in 2019, including a successful reset of the Cannes Lions festival last year and a “realignment” of its MediaLink advisory firm to focus on “large brand reviews and projects”.
He added that the company was pursuing its medium-term target of “double-digit growth”.
Despite the seemingly strong numbers, Ascential’s shares were down 2.2% at 376p in mid-morning.
Peel Hunt trims target and profit forecasts
One potential explanation could be found in a note from analysts at Peel Hunt, which despite retaining their ‘Buy’ rating trimmed their target price to 460p from 485p and their 2019 pre-tax profit forecasts by 3% on the back of higher financing charges.
“The finance charge (£(9.0)mln currently) is perhaps a little light as non-cash costs are expected to be higher and the debt/cash balance drives higher cash interest cost. Overall we expect our £105.7mln pre option [pre-tax profit] forecast to reduce to £102mln”.