Trading has deteriorated rather than improved in the second half, contrary to previous expectations, according to advertising and public relations company, Chime Communications.
In a trading statement issued this afternoon, Chime said that the second half has has proven to be worse than the first and the full year outcome is now predicted to be well below market expectations. Accordingly, shares in the group had lost three quarters of their value by late afternoon trading, down 26.5p on yesterday’s close at just 8.5p.
The group says that advertising has continued to decline, as has hi-tech public relations and financial public relations. “Pressure on fees is extreme across the whole group,” said the statement.
In response, Chime continues to cut costs, reduce headcount and restructure the businesses to take account of adverse conditions. Accordingly, exceptional restructuring costs for the year are expected to be £12 million and this has caused the group to be in breach of its banking covenants. Chime is now in discussions with its bank, which is currently said to be ‘supportive’ of the group.
On the positive side, public affairs, consumer, healthcare, marketing services and in particular research, have continued to improve, albeit in a ‘very uncertain market’.
