Huveaux

Publishing and media group Huveaux, a former GCI profile which recently warned 2007 numbers would disappoint, has political drivers at the heart of its publications.

The UK and EU market leader in political publishing, the company is behind Dods Parliamentary Companion, The House Magazine and Epolitix.com, and provides online learning to the private and public sector. It recently acquired the famed Letts study guides brand and provides specialist publications for the French medical profession.

Interims to June revealed an alarming profits drop to £100,000 (£1.4m) on modest 8% sales growth to £21.7m, driven by acquisitions, with organic growth in the political and education divisions offset by revenue reversals in learning, where a slowdown in training spend ahead of Gordon Brown’s appointment as Prime Minister hit home and in healthcare, where Huveaux felt the pain of a dip in advertising within the French pharmaceutical sector.

Despite these set backs, chairman John van Kuffeler insists prospects are encouraging at the second-half weighted group, with the education arm performing well and Brown’s move to Number 10 set to drive an even busier second half for the political division as well as free up training spend. A profits improvement drive – cost cutting twinned with the launch of new publications, conferences and exhibitions – should herald a return to growth in 2008.

Moreover, ‘in every year of our existence, we’ve increased sales and profits and we pay out in cash, having increased dividends every year’. For 2007, Dresdner Kleinwort’s Richard Menzies-Gow sees pre-tax profits of £5.5m (£4.8m), 2.56p of earnings, up from last year’s 2.41p, as well as a rise in dividends from 1.21p to 1.31p. Trading on a forward p/e of 12.7 with a 4% yield Growth Company Investor views the shares as dramatically oversold. Buying by directors underpins our long-term confidence. Hold.