UK advertising and public relations group, Chime Communications, this morning confirmed that it had achieved its target of double-digit growth, despite ‘the horrors’ of 2001.
Announcing its financial results for the year ended 31 December 2001, the group said that despite some optimistic comments made at the end of last year, the market remains pretty weak. It is expected that H2 2002 will show an improvement, whilst H1 remains fairly poor; this is in line with the general consensus.
After a raft of exceptional charges, pre-tax profit fell from £14.3 million to £9.1 million; prior to these charges it rose to £16.3 million. Turnover was up from £147.9 million to £155.2 million and operating income increased by 14% to £95.1 million.
Advertising Chime’s advertising businesses showed organic growth in operating profits of 12% whilst operating income was similar to last year.
“Although on the face of it these results are good, the detail of our different advertising brands is mixed, which is not surprising given that the advertising market experienced its first decline since the early ’90s,” the company said.
Creative agency HHCL lost some major clients – AA, Egg, Tango and Amazon; but also won the pan European work for Captain Birds Eye and a place on the Mars roster. This resulted in a decline in both operating income and operating profit.
However, overall this was offset by strong performances from Roose and Partners, Teamspirit, AMD Girardot and AMD OJM (media buying).
Agency globalisation Responding to the continual globalisation of agencies, Chime says that it is time for HHCL to move from its position as a creative UK-based advertising agency to become able to offer delivery across the international markets.
There is a plan to achieve this which should come to fruition in the first part of this year, the company said.
Outlook Experience so far in 2002 suggests that market conditions have not improved, according to Chime. Anticipating no improvement until H2, the company has further reduced costs, particularly of personnel and especially in the advertising business.
The group says that there are signs that the US economy is recovering and that this will flow through to the UK and other European economies. “The UK economy appears to have been less affected by the global downturn, consumer spending is strong and with low inflation and low interest rates it is reasonable to be optimistic about the second half,” reads the statement.
By late morning shares in Chime Communications were down 2p at 129p.
