Chime says it was wrong - second half to be worse
LONDON - Lord Bell's Chime Communications has said that its full-year results will be well below market expectations, after it admitted that it got it wrong when it said the second half of the year would be better than the first, sending its shares plunging more than 74%.
Shares in the company, headed by Lord Bell, dropped 74.29% to just 9p at 4.10pm, having lost 26p shortly after issuing a trading statement. "We said at our interim report that the second half would be better than the first half. This forecast has proved to be wrong," the statement said.
"Trading conditions have deteriorated further. We expect the full-year outcome to be well below market expectations. Advertising has continued to decline, as has hi-tech public relations and financial public relations. Pressure on fees is extreme across the whole group."
The company also revealed it had broken banking covenants with restructuring costs for the year set to hit £12m. However, it said that its bank continued to support the business.
Chime owns the Bell Pottinger public relations network, and its financial public relations offering has been hard hit by the decline in mergers in acquisitions. Its advertising agency HHCL & Partners was hit by client losses last year, and has failed to bounce back.
Chime has been in talks with WPP for months over the future of HHCL, which WPP wants to form the London operation of its fourth international network Red Cell.
Amid the gloom of the statement, Chime claimed there was a positive side -- public affairs, consumer, healthcare, marketing services and research have all improved, and new business has been won from Vauxhall, Deutsche Bank, the Dubai International Finance Centre, as well as exisitng clients Nestle, British Gas and Norwich Union handing its agencies more work.
The company is continuing to cut costs by slashing staff and restructuring businesses. It plans to merge the PR agencies QBO and Bell Pottinger Public Relations.
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