28th Nov 2013 14:51
LONDON (Alliance News) - Shares in Creston PLC dropped 7.8% Thursday as pretax profit was hit by costs relating to the company's co-location of its London operations and start-up costs, and revenue declined.
Pretax profit was GBP1.6 million in the six months to end-September, down from GBP7.9 million a year earlier, hit by around GBP1.9 million in costs resulting from the co-location of its London based companies such as double rent and onerous lease provisions and the start-up of its new healthcare public relations company, Liberation Communications.
Over half of the digital communications company relocated to Creston's new London office during the period as part of its long term co-location strategy. This raised operating costs during the period, and Creston cautioned that it would add around GBP800,000 in operating costs in 2014.
The digital communications group posted revenue of GBP35.7 million, down from GBP37.2 million. Revenue was below expectations due to volatility related to the phasing of some client work and exceptional time incurred in new business activity, Creston said.
Creston's UK-based companies performed well during the half, however the company's US businesses saw declines following the loss of its 20-year partnership with Sanofi Pasteur last year.
Although full year operating costs will be hurt by the increased property costs, Creston said that it anticipates higher revenues in the second half, and full year revenues to be flat on the previous year.
As a result Creston declared an interim dividend of 1.20 pence, up 20% from 1.00 pence in the previous.
Shares in Cerston were trading down 7.8% at 91.50 Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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