ST Ives (LON:SIV) (FTSE Small Cap Index) I have bought a holding in publishing and marketing company, St Ives. The company had a pretty torrid time during the 2000's with the shares falling from a peak of 650p in December 1999 to as low as 46p during 2009. Over the last 18 months or so the share price has staged a recovery as the momentum in the business has changed. The Company has to some extent re-positioned itself away from commoditised bulk printing to more value added services through the addition of marketing services. It now works with its clients on marketing strategy and providing them with the tools to execute it. During the last couple of years it has made some acquisitions in this area; Tactical Solutions, a leading field marketing company, Response One, who provide integrated marketing solutions , Pragma, a leading consultancy specialising in retail and consumer markets and Incite Marketing Planning Limited, an industry leading market research and insights consultancy. The Company also made an investment in Sponge Limited, a leading provider of mobile marketing solutions.
Recent results have started to show the fruits of these investments. The latest trading statement from the company issued on the 27th November was fairly upbeat with management talking about higher margins being achieved and improved operating profits as the balance of the business shifted towards the higher value added marketing operations.
This brings me to valuation where on consensus forecasts the Company is valued at only 7.3x earnings for the year to July 2013 falling to 6.8x July 2014. Enterprise Value (net debt + market capitalisation) is less than half turnover. A more than 2x covered dividend of 6.3p is forecast for the current year giving a prospective yield at 120p of 5.3%.
Although the shares have performed well over the last six months or so my view is that they could have a lot further to go. I have bought a 3.5% holding in the JIC portfolio with the proceeds of yesterday's sale of Halfords. (see transaction history)
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