The advertising and public relations market place remains ‘very weak’ according to a trading statement from Chime Communications posted this morning. In its preliminary announcement in March, Chime said that market conditions had not improved (see No Recovery Until Second Half Says Chime Communications) and this has continued to be the case for the first four months of the year.
H1 revenues to be 10% down Revenues have declined across the company’s advertising, public relations and hi-tech businesses. However, marketing services revenue has strengthened slightly. Recent trading is showing some signs of improvement, but against the background of a weak start to 2002 management’s current expectation is that revenue for the six months to 30 June 2002 will be just over 10% lower than the second half of 2001, the statement said.
Significant cost-cutting that was embarked on last year has continued into 2002, resulting in exceptional costs of around £3.0 million in the first half and ultimate annual cost savings of about £4.0 million.
Europe weak Chime says that both it and its international competitors have witnessed more severe weakness in the UK and the rest of Europe than elsewhere in the world.
It says that whilst more pitches are being made than last year, and more are being converted into contracts, the average value of these deals is lower than in 2001. In its advertising business, HHCL has stemmed the flow of lost clients and has won several new clients: Autoglass, Yorkshire Water, FIFA, COI – Food Standards Agency and the Science Museum.
Chime is intending to enable HHCL to make its offer available on a wider international basis, and is currently in negotiations to achieve this.
Outlook In March Chime said that H2 2002 should be better than H1; that remains the view but it believes that the recovery may be slower than anticipated.
At 11:30am shares in Chime Communications were down 21½p at 108½p.
