Date: 08th March 2018
Communisis PLC preliminary results 2017
Strong trading in 2017 will be followed by the launch of new strategy for next phase of growth.
Leading provider of integrated business services, Communisis plc (LSE: CMS), reports preliminary results for the year ended 31 December 2017.
Commenting on the results Communisis Chief Executive, Andy Blundell, said:
“Strong trading in 2017 saw Communisis generating profitable growth with good levels of free cash flow and a significant reduction in net debt.
“Long-term contracts have been secured with a major UK Bank and with Proximity Ltd to provide communication services to the BBC for the TV Licensing programme.
“A strategy for the Group’s next phase of growth is being launched today: a focused, three year plan to create enhanced returns to shareholders as we raise the value we provide to our clients.”
- Adjusted earnings per share up 5% to 6.4p (2016 6.1p)
- Adjusted profit before tax up 3% to £17.2m (2016 £16.7m)
- Profit before tax up 24% to £14.4m (2016 £11.6m)
- Strong free cash flow at £12.5m (2016 £12.9m)
- Net debt reduced by £6.1m to £24.3m (2016 £30.4m)
|Total revenue (£m)||375.9||361.9||+4%|
|Adjusted operating profit (£m)*||21.2||19.5||+9%|
|Adjusted profit before tax (£m)*||17.2||16.7||+3%|
|Profit before tax (£m)||14.4||11.6||+24%|
|Adjusted earnings per share (p)*||6.4||6.1||+5%|
|Proposed final dividend per share (p)||1.77||1.61||+10%|
|Free cash flow (£m) **||12.5||12.9||-3%|
|Net debt (£m)||24.3||30.4||-20%|
* Adjusted metrics are stated before exceptional items and the amortisation of acquired intangibles to give a better understanding of the underlying performance of the Group. Adjusted earnings per share is diluted and excludes the after tax effects of exceptional items, amortisation of acquired intangibles and certain tax items in respect of prior years.
** Free cash flow represents net operating cash flow less net capital expenditure.
Value Enhancement Programme (VEP) 2020 – Three Year Plan Highlights
- The financial target is to create sustainable shareholder value over the next three years (2018-2020) by growing adjusted diluted earnings per share (EPS) within a range of 5-10% CAGR.
- The VEP is a three year plan to deliver enhanced returns to our shareholders by raising the demonstrable value we deliver to our clients.
- There will be a deliberate focus on margin improvement and related pricing initiatives.
- The VEP will be driven by three key strategic themes: Digital First, Global Reach and Empowered Organisation.
- The target has now been built into in our senior management remuneration policy and the design of 2018 Long Term Incentive Plans (LTIPs).
- Major UK Bank: a new contract was won for marketing communication and an existing contract for transactional communication was renewed, both for five year terms.
- Proximity: the partnership contract to provide communication services to the BBC for TV Licensing was renewed for a six year term.
- HMRC (Her Majesty’s Revenue and Customs): good progress in the implementation of the contract for all outbound printed customer communication and forms fulfilment. Following the successful migration of all fulfilment activity to our Newcastle operation in May 2017, Communisis assumed full accountability for all printed customer communications. This includes the transition of circa 180 million packs annually into our Halifax and Liverpool transactional facilities, beginning in October 2017.
- Overseas sales now represent 30% of total turnover (2016 26%).
- New York: good progress made with our US Editions office established in May 2017 to service clients in the financial services sector with content marketing services.
- Hong Kong: Communisis will open an office in Hong Kong in April 2018 for the sourcing of “premiums”; the gifts which accompany many purchases of luxury goods.
- Technology investment: the programme to install a single platform for the management of our international supply chain for marketing execution is planned to go live in Q2 2018.
Communisis is at an exciting stage in its development with a bedrock of solid performance and deep client relationships to build upon. The growth strategy for the next phase is highly focused and we already have clear evidence of the themes of Digital First, Global Reach and Empowered Organisation, resonating in our key markets.
The Board is looking forward to another positive year for the Group.
Communisis is an integrated business services company which drives client value and sustainable profit improvement, through the provision of increasingly digitally enabled solutions for regulated transactional communication and marketing execution.