UPDATE: Centaur Media's Advertising Recovery Continues

8th Jul 2010 12:20

(Adds detail, analyst comments, share price.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Publisher Centaur Media PLC (CAU.LN) Thursday said a recovery of the advertising market has continued in to its current fiscal year, as it announced a 10% on-year rise in second-half advertising revenue. The result implies a strong end to its fiscal year to June 30, as earlier this year Centaur said advertising revenue was up 5% on the year in the four months to April. Centaur--which publishes titles like The Lawyer and Marketing Week--said strong demand from the marketing and legal sectors was behind the advertising recovery. Recruitment advertising has had the strongest turnaround, with revenue up about 20% on the year in the second half. Centaur said print and online also both delivered growth during the period, although specific figures weren't provided. The company remains on track to post fiscal 2010 profit in line with its board's expectations, although it didn't say what these were. According to FactSet analysts expect the group to make a pretax profit of between GBP2.9 million and GBP3.7 million. Centaur, like most publishers, has been hard hit by reduced spending by advertisers during the recession. In the six months to Dec. 31 its recruitment advertising revenue halved as companies laid off staff to save costs during the economic downturn. However, Centaur isn't solely dependant on advertising sales, as it also makes cash from hosting exhibitions and conferences. Its events division had a busy end to the year, with its two major exhibitions achieving revenue growth of 12% in the final two months of the fiscal year. Numis Securities analyst Paul Richards--who rates the stock a "buy"--told clients in a note that his fiscal 2011 forecasts will likely prove conservative. He currently forecasts Centaur to make a fiscal 2010 pretax profit of GBP6 million on sales of GBP61.5 million. "We believe the downturn has been largely cyclical rather than structural and expect profits to rebound vigorously as its served markets recover," Richards told clients in a note Thursday. Altium Securities analyst Roddy Davidson said he is leaving his middle-of-the-range forecasts for Centaur unchanged. However he said risk remains on the upside, due to the accelerating revenue momentum and because the company has a flexible cost base. "We believe Centaur's current valuation doesn't reflect its substantial earnings growth potential, particularly in light of a period of flat relative performance," he told clients. He rates the stock "buy." Centaur said the economic environment remains uncertain, although it expects to benefit from its strong portfolio of brands, new product pipeline and experienced management team. At 1112 GMT its shares were trading 4 pence, or 8%, higher at 50 pence, outperforming a 0.7% rise in the Dow Jones U.K. Smaller Companies index. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires July 08, 2010 07:20 ET (11:20 GMT)