Incepta sees profits fall and no second-half upturn
LONDON – UK marketing services group Incepta, which owns the Citigate international PR network, has seen pre-tax profits collapse, dropping 34% in the six months to August and said it sees no prospect of an upturn in the second half.
Turnover was down 9% year on year as it reported its interim results, falling to £132.7m from £146.5m last time. Incepta said that profitability reflected the difficult trading environment, particularly when compared with the first half of last year when the economic climate was more favourable.
It reported a strong performance from its Marketing Services division, which has benefited from the increased migration of media spend to below-the-line activities. The division saw a 9% increase in gross revenues to £28.6m, over one-third of the group's total gross revenue. The division also generated nearly half of the group's operating profits buoyed by below-the-line activity.
It has been the public relations and specialist advertising divisions that have again been most badly affected, hit hard by the reduction in corporate activity and the weakened economy. Gross revenue at its public relations division fell by 2% over the period to £41.1m. Incepta's technology PR businesses continue to face a challenging marketplace in the US and Europe, although it has continued to win new clients in both areas.
Across the group, a number of new client wins were reported in the six-month period, including ABN Amro, Bloomberg, Cable & Wireless, Cookson, Del Monte, Enagas, Gemplus, Marks & Spencer, Sears Roebuck and Yell.
David Wright, chairman of Incepta Group, said: "For the second half, we have yet to see any evidence of upturn in our markets and we have positioned our operations accordingly. We have demonstrated that we react quickly to changing market conditions in the face of economic and political uncertainty, and we remain confident in the group's medium-term prospects."
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