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FTSE 250 company Ascential is on the cusp of major change. In October, it announced the sale of its digital commerce arm and its trend forecasting division, WGSN.
The deals are worth a total enterprise value of £1.4bn, with cash proceeds of £1.2bn, and shareholders are in line for £850mn of this.
Things have gone to plan so far. The sale of the digital commerce division to US media giant Omnicom completed this month, and Ascential’s chief executive Duncan Painter has left to join Omnicom. Philip Thomas, who previously headed Ascential’s intelligence and events division, has taken over as group chief executive.
The WGSN deal also appears to be on track. All regulatory clearances have now been received and the sale is due to complete at the beginning of February.
The market has responded well to the news: shares are a third higher than they were before the shake-up was announced in late October.
Chief financial officer Mandy Gradden has made the most of the uptick in market sentiment. On January 4, she sold 850,000 shares for 288p each, or more than £2.4mn in total. Her remaining shareholding consists of 424,962 ordinary shares, in addition to share awards representing 1.2mn shares
The group said this “significantly exceeds the directors’ shareholding guideline” and that Gradden’s interests “remain strongly aligned with shareholders”.
Ascential’s decision to focus exclusively on corporate events mirrors that of Informa, which sold off its pharma intelligence unit and the famous shipping journal Lloyd’s List in 2022. This allowed Informa to buy back £1bn-worth of shares and make some sizeable acquisitions in the international events market. However, analysts have flagged that both companies are now more exposed to economic cycles having divested their more defensive divisions.
Science in Sport chair seeks gains
Science in Sport makes a range of energy gels, hydration products and protein powders for athletes aimed at improving their performance.
Perhaps it’s not too churlish to suggest the company needs to make gains of its own.
Although its top-line growth has been respectable since it listed on AIM via a demerger from food supplement specialist Provexis in 2013, it has failed to generate a profit. And various dilutory fundraisings along the way have contributed to its shares delivering a negative total return of over 75 per cent since its debut, according to FactSet.
Its last full-year accounts for 2022 showed a pre-tax loss of £10.6mn on revenue of £63.8mn, which it blamed on “unprecedented” increases in input costs alongside a weakening of consumer confidence and supply chain strains. Net debt excluding leases also rose to £10mn as it completed the move of its manufacturing base from Colne in Lancashire to an expanded site in Blackburn. A strategic review completed in April found that it needed to get back to faster growth, but to do so profitably, which was perhaps not the most radical of conclusions.
Alas, chief executive Stephen Moon, who had led the company since its market debut, will not be the one to deliver this. He and former chair John Clarke both recently stepped down, with Dan Wright taking over as executive chairman in October. Wright co-founded Manchester-based private equity firm NorthEdge Capital and is currently attempting another turnaround at nearby Accrol Group.
He certainly seems to fancy his chances at Science in Sport, where last week a company associated with him bought a million shares at 11p a share. The company’s largest shareholder, Swiss private bank Lombard Odier also spent £1mn increasing its holding to 25.75 per cent.
