Though the above certainly wasn't my first thought when coming across Creston (LON:CRE), I think it's a fair tagline for the company and what they're trying to do. How much growth, whether they can achieve it, and if it's still a good investment even if they flatten out and settle down are the questions it leads me to ask, as I certainly don't consider myself a growth investor. I approach stocks conservatively and with the mindset that the future is near-impossible to predict, so one should be very careful in applying a big premium for the expectation of growth. Hence it's rare that I find a company in such an exciting industry - marketing, particularly social media, web-based platforms etc. - falling in my screens, which far more often turn up companies which investors instead think are dying breeds - take Communisis. The group itself is a ~ £66m market cap, diversified marketing and communications company, and an amalgamation of 3 different sectors which within themselves have a number of different brands. The first division, Insight, seems to be a sort of marketing and general consultancy business - services they provide include 'new product development problem solving', 'PR generation', and 'competitor analysis'. Oh how I love marketing firms! The second, Communications, is a more 'catch-all' branch - this encompasses advertising, both digital through mobile, social media and general web platforms, offline, and in-store/promotional activity. Finally, health focuses on providing what seem to be similar services to the above, but more specifically to the health sector - medical education, PR, branding etc. It should be noted the chart to the right is influenced by the disposal of a big business in 2010 - hence the sharp reduction in revenues.
41% of their revenues are generated online, and this number is growing ever larger - this year the company targets 50% of total revenues from online forms of marketing. In addition to shifting company focus towards the higher margin segments, Creston has also been proactive in disposal and acquisitions as it shifts towards growth sectors; notably their £28m disposal of DLKW last year. DLKW was a more traditional off-line marketing business, and I buy the management line on the sale. They noted that "... structural change driven by media fragmentation and the impact of the internet and digital channels on media consumption…
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