Events-to-magazine publisher group Centaur Media (CAU) falls 7.5% to 65p on a lacklustre trading update and proposed subsidiary sale which could result in significant dilution to earnings forecasts.
There's been no overall revenue growth in the first four months of 2014 as a hike in paid-for content sales is offset by weakness in its financial portfolio which includes business-to-business publications Money Marketing and Fund Strategy. Centaur says external and legacy issues in its financial and human resources portfolios will 'adversely' impact group profit in the first half of the year.
While it falls short of issuing a profit warning, insisting that trading for the full-year remains 'broadly' in line with expectations, there's clearly elevated risks to the stock. Failure to reassure the market when it next updates on trading could trigger another sell-off.
Centaur has proposed to sell its financial documents arm Perfect Information to Mergermarket for £26 million. It says the 'single format' business doesn't fit the group strategy and has a limited overlap with core customers, content and technology.
The media group says it will also settle the outstanding payment for July 2012's acquisition of Econsultancy for £12.5 million cash, far earlier than expected. It originally paid £12 million for the business with deferred performance-based consideration of up to £38 million due in 2016.
Westhouse Securities analyst Roddy Davidson reckons all-in-all this is a positive set of news from Centaur. He comments that it provides 'evidence that much needed change within the business is actually taking place.'
At the interims in February, Davison had favourable reviews towards new chief executive officer Andria Vidler who joined in November 2013, having previously run EMI Music UK & Ireland and previously had senior roles at Bauer Media, Magic FM and the BBC.
'She seems to have been very active during the first few months of her tenure and to have more thoroughly reviewed brands, end markets and the group’s strengths, weaknesses and growth opportunities than her predecessors,' wrote the Westhouse analyst analyst in February. 'Key imperatives identified include revitalising core brands, accelerating digital functionality, creating a single unified organisation (from a “federation of small businesses”) and building synergies.'
