Huntsworth reports pre-tax profit fall of 28%
Huntsworth, the owner of Grayling, Red and Citigate, announced a 1.5% rise in revenue during 2011, but saw pre-tax profit fall by 28%.
Lord Chadlington: Huntsworth chief executive
The UK-listed group saw annual revenue rise to £176.3m in the year to the end of December from £173.6m during 2010. Like-for-like revenues grew by 1.1%.
Pre-tax profits fell to £19.1m, down from £26.7m in 2010. Net debt rose by 34% to £71.1m from £52.9m.
As the group had previously announced, the results were impacted by the cancellation of a number of client projects, particularly in its healthcare division.
Lord Chadlington, chief executive, commented: 'Management has taken action to reduce the cost base across the group, as well as make it more flexible and better able to match clients’ requirements and spending patterns. The group’s revenue and profit profile is expected to be delivered more evenly over each quarter of the year than historically has been the case.’
Huntsworth reported costs of £2.4m associated with this restructuring, primarily as a result of severance payments, property and other contract termination costs.
He added that, during the first three quarters of 2011, the group saw strong like-for-like revenue growth, reaching its target of 7% in Q3.
He said that the group anticipates Q1 like-for-like revenue growth of 3%, with around one quarter of 2012 budgeted profits to be earned in Q1 – a significantly higher proportion than in previous years.
‘The group’s new business pipeline is strong and we expect the improvement in profitability to be maintained both in the first half and for the year as a whole.’
Red was the stand-out performer of the group’s four divisions. The agency saw like-for-like revenue growth of 7% and won clients including Adobe, Symantec and Gatwick Airport.
Grayling, which represents almost 50% of group turnover, saw like-for-like growth of 1%. New clients such as Qatar Foundation, BA and DHL helped to drive a 25% like-for-like increase in multi-office revenues.
City PR arm Citigate saw 3% like-for-like growth, with retainers growing by £1.1m year-on-year and now accounting for 67% of all revenues.
Huntsworth Health saw a 1% drop in like-for-like revenues as international pharma firms cancelled key projects late last year. The division did see digital revenues grow by 18.4% for the full year.
This article was first published on prweek.com
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