11th Jun 2014 11:15
LONDON (Alliance News) - Creston PLC Wednesday raised its total dividend for the year to end-March and announced a share buy-back for up to GBP2 million of shares, as its pretax profit was hit by costs relating to the consolidation of its London businesses.
The marketing group raised its total dividend to 3.90 pence, up from 3.67 pence in the previous year.
Creston posted a pretax profit of GBP7.2 million for the financial year to March 31, down from GBP9.8 million the year before, as revenue declined slightly to GBP74.9 million from GBP75.2 million and it posted exceptional costs of GBP2.4 million for the recent year.
These exceptional items included GBP1.4 million in costs from co-locating its London businesses, GBP630,000 in acquisition and start up costs, and GBP252,000 in future acquisition payments to employees.
Creston has been consolidating all of its London businesses into a single location, leading to an increase in property costs. However the company said that co-location of its businesses had increased collaboration between its businesses and contributed to new client wins. It said 36% of the company's revenue for the recent year was derived from clients shared across its businesses.
During the year, the company launched a new digital healthcare agency in the US, a brand and creative agency, a conflict healthcare PR agency, and a social media agency.
Following a weaker first half, the company saw strong growth in its second half on new business wins. Revenue in the second half rose 3%, although this growth was not quite enough to offset the shortfall in the first half.
The company won new business worth GBP8.6 million in revenue on a yearly basis, including new business with existing clients such as Unilever PLC and J Sainsbury PLC, as well as landing new clients including Novartis International AG and HSBC Holdings PLC.
Over 50% of the company's revenue was derived from digital and online work, Creston said, a target it had originally set for the financial year 2015. Creston said that this digital work is a key driver for its new business opportunities, and demand for these services had continued into the new financial year.
Creston said that the new year would be one of investment as it realigns its business into a unified group. Although the company remains cautious about the broader macro-economic climate affecting its clients' budgets, it is confident its new strategy will allow it to deliver higher growth over the medium term.
The company said it has appointed Liberum Capital Ltd to manage a new share buy-back programme to purchase up to GBP2 million worth of shares at "an appropriate price."
Shares in Creston were trading up 0.5% at 107.50 pence Wednesday midday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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