Consistent strong results means ITV is recommended as a ‘buy’ for investors

• ITV says first half profit growth was boosted by its expanding production business
• The broadcaster continues to grow and rebalance both creatively and commercially
• The Share Centre currently recommends ITV as a ‘buy’ for investors

As ITV reports its Q2 results, Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors.

“This morning, ITV, the UK’s biggest over-the-air commercial broadcaster, said it was on track for another strong performance in the full year as it experienced revenue growth across the business. The group said that in the six months to 30 June, net profit rose to £257m and revenue from external sources rose by 11% to £1.36bn. Furthermore, investors should acknowledge that CEO Adam Crozier has transformed the group and he continues to ‘grow and rebalance the company creatively and commercially’.

“Analysts have been encouraged by the improvement at ITV’s Studios business, as it continues to see a significant increase in new commissions and its digital offering. As a result, investors should note that ITV Studios saw revenue increase by 23% to £496m during the period.

“With so many options now available to consumers ITV has had to fight hard to maximise its audience share. In a fast changing environment, the changes that have been made in the group appear to have come in time to save what was once a troubled company. The debt situation has been addressed which has enabled the group to make a number of acquisitions, geared towards boosting its production business further and enabling strong dividend growth.

“As a result, we recommended ITV as a ‘buy’ for medium risk, growth seeking investors. Since we moved to a ‘buy’ recommendation on the shares in late 2009, the share price has risen by around 675%. Investors should therefore be aware that future growth is likely to be more conservative.”

INTENTION TO SEEK ADMISSION TO TRADING ON AIM AND PROPOSED PLACING TO RAISE UP TO £30 MILLION

Gloo Networks plc, a technology company established to acquire and operate companies in the media sector, announces its intention to seek admission of its shares to trading on AIM (“Admission”).

The Company, which is led by digital transformation experts Rebecca Miskin (Chief Executive Officer) and Juan Lopez-Valcarcel (Chief Product and Operations Officer), intends to acquire and operate trusted consumer brands in the media sector, with an enterprise value in the range of £250 million to £1 billion.

Gloo is seeking to benefit from the changing relationship between consumer brands, media owners and the advertising industry; this relationship continues to experience structural change, driven by the evolving prevalence of internet usage and the increasing adoption of data analytics, allowing businesses to better understand and serve consumers. The convergence of the internet and media sectors has created multiple investment opportunities with numerous companies or businesses identified within Gloo’s target universe.

Gloo intends to acquire businesses that appeal to attractive socio-economic groups, and through the use of data and technology, transform these businesses to fully realise their digital potential, thereby unlocking value and increasing profitability.

Gloo’s initial capital raise of up to £30 million is anticipated to receive strong backing from major institutional investors, with significant additional capital expected to be raised at the time of the target acquisition. The principal focus for a platform acquisition is the UK, the US and (to a lesser extent) Europe.

Rebecca joined Gloo from Hearst Magazines UK, where she worked as Digital Strategy Director and Change Agent. Hearst Magazines UK is the publisher of leading titles such as Cosmopolitan, Elle and Men’s Health, and is part of Hearst Corporation, one of the world’s largest diversified media and information companies spanning print, television and digital.

Juan was previously Chief Digital Officer for Pearson International. Pearson is the world’s largest education company by revenues, the parent company of the Financial Times and the owner of stakes in Penguin Random House and The Economist Group.

Rebecca and Juan will work with Marwyn, the asset management and corporate finance group,  which was founded in 2002 by James Corsellis and Mark Brangstrup Watts. It is anticipated that Marwyn Value Investors LP (“MVI LP”) will make a sizeable investment in the company.

MVI LP’s current investments include Entertainment One, the FTSE-250 listed TV and film content production and distribution business, BCA Marketplace plc, Europe’s largest used vehicle auction operator acquired by Haversham Holdings via a £1.3 billion reverse takeover in April 2015, and Zegona Communications plc, which recently announced an agreement to acquire the Telecable Group for an enterprise value of €640 million.

Rebecca Miskin, Gloo Chief Executive Officer said: “Content consumption is at an all-time high, whilst technology is disrupting media and enabling a deeper understanding of an audience than ever before. We have an exciting opportunity at Gloo to create a new blueprint to enrich the user experience, and unlock the full potential of brands. Gloo intends to acquire businesses with leading brands and, through data and technology, release and transform their real potential. We look forward to working with outstanding talent and the world’s most advanced technologies to unlock value for shareholders. London is fast becoming the global capital for fintech and fashion-tech; media-tech should be there too.”

Professional hiring up 12% as income tax receipts reach record high

Permanent vacancies increase 12% year-on-year 

• Finance & accounting sectors thriving 
• Contract vacancies rise by 1% year-on-year
• Average salaries climb, increasing by 2.9%

Professional recruitment firms now have 12% more vacancies on their books than this time last year according to new survey data from the Association of Professional Staffing Companies (APSCo). This is despite the latest data from the Office for National Statistics (ONS), revealing that overall employment levels dipped by 67,000 in the three months to May 2015. 

Finance & accounting sectors thriving

The latest data from APSCo reveals that growth in the professional staffing market continues to climb across all of the trade association’s core sector groups. Permanent vacancies across finance & accounting, IT, engineering and media & marketing are all up year-on-year (13%, 11%, 7% and 1% respectively). This positive sentiment is in line with recent figures released by the ONS which show that income tax receipts rose to £11.5bn in June as wages climbed.” 

The continuing rapid growth of the financial and accounting sectors is in keeping with reports from recruitment consultancy Morgan McKinley which found the number of new London financial services job vacancies in June was up 56% from May after a sharp dip during the General Election period. 

Average salaries continue to climb

APSCo’s figures also reveal that median salaries across all professional sectors continue to climb steadily, increasing by 6.2% year-on-year, with engineering and finance, for example, recording uplifts of 6.6% and 5.5% respectively. This rise in remuneration for professionals exceeds average salary rises reported by the ONS which found that earnings, including bonuses, grew at an annual rate of 3.2% in the three months to May 2015. 

Ann Swain, Chief Executive of APSCo comments:

“Behind reports that national employment levels have fallen quarterly for the first time in over two years, it is worth remembering that, as a percentage, the employment rate is down by just 0.1%. APSCo’s data is more representative of what the recruitment profession has witnessed of late: greater market stability and confidence in hiring, particularly within the professional sectors. The annual growth in tax receipts is indicative of the strength in the labour market, particularly strong wage growth.”

Ann Swain continues;

“The fact that wages have risen so significantly is a sure sign that market confidence is soaring. Organisations are scrambling to get their hands on the brightest talent, and only those that can offer attractive remuneration packages stand a fighting chance. The CBI’s latest growth indicator found that economic expansion in the three months to May reached its strongest rate since the same month last year, and as companies reach their saturation point in terms of output, they will face a choice between bringing on board more talent, or stunting their own growth prospects.” 

Contract vacancies remain resilient 

Temporary and contract vacancies remain steady across the professional staffing market with opportunities up by 1% across the board year-on-year. Vacancies within finance and accounting are particularly strong, increasing by 9%. 

Swain continues; 

“Contract vacancies within finance and accounting remain strong as organisations bring on board compliance specialists on a project basis to help manage legislation. Members are telling us that the new UKGAAP financial reporting standard, which came into effect in January this year, is currently creating unprecedented demand for accountants specialising in derivatives.

“Widely publicised UK job cuts within financial services, such as those announced by HSBC and Barclays in recent weeks, look set to create further demand in the area as contractors are brought on board to cover gaps left by the loss of permanent positions.” 

John Nurthen, Executive Director, Global Research for Staffing Industry Analysts, which compiles the report for APSCo, comments: 

“The data for this month suggests that the professional recruitment market is continuing to perform well. Recruiters are now benefitting from escalating demand after many years focusing purely on minimising costs. Such solid growth in median salaries across all professional sectors may indicate the beginning of a period of wage inflation. Businesses will have to adapt accordingly given that wage growth has been subdued for such a long period.”