Chime reveals 27% growth in profits
LONDON - Chime Communications, the PR, advertising and research group, is proving immune to the slowdown with a 27.3% rise in first half pre-tax profits to £8.2m.
Revenues for the six months to June 30 rose 22% to £115.5m, with advertising and marketing services accounting for much of the growth. Organic revenue growth came in at 11.1%.
The group, which owns advertising agency VCCP, warned that there was "some visibility of reduced expenditure by clients in the advertising sector and the research sector".
It said it was paying particular attention to cost control and cash management, but believes its diversified model should help protect it in the event of an economic downturn.
Its PR and sports marketing businesses, which include Bell Pottinger and Fast Track, are more insulated from budget cuts, with "no signs of clients reducing the budgets out of the ordinary".
Lord Bell, chairman of Chime, said the group was benefitting from a different attitude by clients compared with previous downturns.
Bell said: "I think part of it is that in this particular downturn people have decided to explain their problems to the outside world and are spending as much money covering bad results as they are when they've got good results.
"In previous recessions they've tended to shut up and wait for the storm to blow over but I think this time everybody is busy explaining what is going on.
Chime is preparing to launch a digital research business in the autumn, which will be named Caucus. It will initially be focused on UK clients with longer-term ambitions to go global.
Bell said: "It'll be digital deliberative research and it will be slightly different to number crunching.
"It'll kick off in the UK but of course the net is a global medium so you can't be discrete to one country. Whatever we do on it will be visible across the world so we'll expand it as quickly as we can.
"It's not a competitor to YouGov, which is a polling organisation. This is a deliberative, consultative research process carried out through digital technology."
Although the company has succeeded in arranging a new £32m five-year borrowing facility with Royal Bank of Scotland, it is "not in acquisition mode" and will be focusing on start-ups.
The money is intended as a cushion for hard times if needed, according to Bell: "It's what you do when things look bad, you have to put some insurance policies in place.
"When people keep on telling you that trading is going to decline, although ours hasn't, you need to prepare yourself for that situation because you may need to have higher debt for a period."
The company's shares gained 2.82% in early trading, climbing to 109p.
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