Chime shares rally after early fall
LONDON - Chime Communications has admitted that its advertising performance has been "variable" and that its PR and online businesses have suffered from the downturn, but it still forecasts growth for next year.
Its share price fell suddenly when the market opened today, before recovering, after the company released a trading statement in which it said it did not expect the adverse market conditions to improve until 2002.
However, it is forecasting 1% organic growth in operating profit and says "we expect to maintain our record of double-digit growth in both revenues and operating profits prior to exceptional costs" for its full-year results.
Shares, which closed yesterday at 126p, were down by 7.9% to 116p when the market opened this morning, but by late morning were trading fractionally up at 126.5p.
In order to cope with the downturn, Chime, headed by chairman Lord Bell, has laid off 15% of its staff this year. It said that exceptional restructuring charges originally estimated at £2m had gone up three-fold to £6m.
Chime ad agency HHCL & Partners has lost two major accounts this year, online bank Egg and the AA. However, it picked up the Captain Bird's Eye account for Europe and was added to the Mars roster. The financial public relations businesses have also suffered as mergers and acquisitions work dried up this year. However, Chime claimed that Good Relations, another of its PR companies, had performed well, as had Bell Pottinger Public Relations.
Chime's half-year results, published on September 11, showed profits up to £8.4m and turnover up by 36% to £86.9m.
It said that it does not anticipate making more job cuts "unless market conditions deteriorate further".
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