3rd Feb 2015 08:00
LONDON (Alliance News) - Creston PLC Tuesday said it expects its headline pretax profit to be broadly in line with expectations for its current financial year, as it offset slowing revenue growth in the third quarter with cost cuts and warned revenue will also be below hopes in the fourth quarter as clients cut budgets.
In a statement, the marketing communications company said revenue was up just 1% on the year in the three months to end-December, its fiscal third quarter. That was a slowdown from the 5% growth it had reported in the first half of the financial year, and means revenue growth in the first nine months of the year was 3%, or 4% on a constant currency basis.
"Our Communications & Insight division continued to perform well. Our third quarter revenue performance was as a result of some client budget cuts and project delays within the UK health business, which will also affect the group's final quarter revenue. As a consequence the board expects full year group revenue growth, but for it to be lower than expectations," it said in a statement.
However, the company is cutting operating costs in response, and still thinks its headline pretax profit will be broadly in line with expectations. It also expects its headline diluted earnings per share to be in line with expectations, thanks to a lower-than-expected effective tax rate.
"While the marketing services sector remains vulnerable to the impact of macro-economic events and their potential to affect our clients' budgets in the FY15 final quarter, the board is confident that the group, with its new management, strengthened Creston Unlimited offer and first-rate blue chip client relationships, is well-placed to deliver long-term growth," the company said.
By Steve McGrath; [email protected]; @stevemcgrath1
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