Hasgrove

Having scaled the heights of 177p earlier this year, pan European communications counter Hasgrove has fallen back to the levels at which GCI originally recommended the shares.

This reflects nothing more than illiquidity in the stock and news of a surge in sales and profits for the six months to June as well as two exciting acquisitions in the high-growth digital space should ensure investors remain upbeat.

Profits powered ahead 147% to £1.2m on turnover increased 115% to £10.1m – earnings rose 43% to 4.4p and Hasgrove finished the period with £2.2m of net cash. Rod Hyde, chief executive, said the results reflected key acquisitions as well as ‘considerable’ investment in organic growth.

This was a half of good profitable growth in the public affairs and corporate communications division, augmented by the acquisition of Cabinet Stewart earlier this year. Operating profits in the design division increased to £685,000 (£280,000), with all of the group’s design companies including recent acquisition Hailstones benefiting from re-branding work arising from an increasing number of organisations choosing to headquarter in Brussels.

There was good growth in Hasgrove’s marketing services division although clients are increasingly looking to reach consumers digitally, where they can measure their return on investment. Accompanying the interims results was the news of two earnings-enhancing acquisitions – Pavilion Communication Services for a maximum £9.9m and Odyssey Interactive for £3.7m – that will give Hasgrove ‘an exceptionally strong digital focus’. Sporting a new £10m facility to assist with further acquisitions, Hasgrove is a high-growth sector gem. If you bought on our advice, consider adding to your holding.

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