Tuesday 14 May 2013

Portfolio Buy: Huntsworth (LSE:HNT)

Investment life for the DIY Income Investor is a hunt for sustainable high yield. By 'sustainable', I mean likely to last for the foreseeable future, without any nasty surprises. So I look for dividend cover, debt levels, cash flow, p/e and general all-round corporate health. Plus this year I am trying to diversify away from the UK and over-reliance on Sterling.

For a (very) part-time investor, this is quite time-consuming - but the time to do your homework is at the beginning. Once you have made your purchase, it is too late.

So, let's see what today's hunt's worth. (Couldn't resist it!)

Huntsworth PLC is an international public relations and healthcare communications group operating from 72 principal offices in 30 countries.

Activities are organised under four principal consultancy brands:
  • Citigate, a leading financial PR brand
  • Grayling, the world’s second largest independent PR consultancy
  • Huntsworth Health, integrated healthcare communications specialists and
  • Red, one of the leading multi-specialist public relations consultancies

The company is an LSE Small Cap, with a trailing dividend yield of 6%, a dividend cover of 2 and a p/e well below 10.

Huntsworth has ticked along nicely for a while but the main new development has been a buy-in from one of China's largest PR firms, BlueFocus, which agreed to buy 19.8% of the group and the two companies will pursure a common business strategy.

As the Holmes Report observed: "While Huntsworth has stagnated in recent years, BlueFocus has experienced meteoric growth, boosted by its decision to list on the Shenzhen Stock Exchange in 2010. The Holmes Report’s upcoming Global Rankings will reveal that BlueFocus posted fee income of almost $88m in 2012, an eye-catching 40 percent increase on its 2011 revenue of $63m."

In addition to providing an entree to the burgeoning Chinese market, the BlueFocus buy-in has allowed Huntsworth to pay off a chunk of debt.

The Annual Report for 2012 (which predates the buy-in) has a lot more information on what the company does. Now, I don't know much about PR but this sort of international tie-up looks like a major positive move.

We'll see. I hope I did enough homework!

[Purchase price: £0.5885]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. Thanks for highlighting this. Had a quick look this morning. Seems to be something I would be interested in. It wasn't on my radar which is a pity because I like to buy when the shares trade below the 200 day avg. That is not to say this wont keep rising. I will read the annual report and add to my watch list. Maybe if there is a sell in May moment it might become a bigger bargain or become too expensive if I dither too long. Keep up the good work


  2. I was about to invest with you till I saw their website. This is a global PR & Communications company - but their site, the front door to their business, is a mess. It screams 'cheap and nasty.' If they can't get that right? I'm giving them a miss.

  3. Yes, it is an unappealing website although you can get some information from it once you realize that the top bar contains all the links. They should have used Traffic Digital or someone like that. My main worry is that I do not feel that I understand much of the (presumably English) language on the site. I suppose I feel much the same if I look at any public relations site. On the positive side the dividend history is good and there is apparently some prospect of a Chinese takeover, although a partnership is what is being bruited about. I might join Sisyphus but in a very minor punt on this one.