28th Aug 2015 07:13
LONDON (Alliance News) - Huntsworth PLC said Friday that it expects to see profitability improve in the second half of 2015 as benefits from its restructuring actions it took in the first half, as heavy impairment and restructuring costs led it to report a swing to a pretax loss in its first half.
The healthcare communications and public relations firm posted a pretax loss of GBP45.9 million for the half year to end-June, swung from a pretax profit of GBP6.3 million a year before, on revenue of GBP83.2 million compared to GBP83.6 million, primarily as a result of exceptional costs of GBP51.5 million.
These included a goodwill impairment of GBP48.8 million related to its Grayling and Citigate businesses, and restructuring costs of GBP1.3 million. Stripping out these costs, pretax profit fell to GBP5.3 million from GBP7.7 million.
Huntsworth said its focus during the first half was taking steps to improve the competitiveness of all of its operations, particularly its Grayling business, where it undertook headcount reduction, closing offices, appointing new management positions and redeploying resources.
The company said that whilst revenues in a number of Grayling operations in Europe and the Middle East are now growing, returning its UK, US and Asia operations to growth will require further work, so it further impaired the carrying value of Grayling's goodwill by GBP38.0 million. Its Citigate business saw revenue and margins both fall in the first half, and whilst investment is planned to reverse this in future periods, Huntsworth opted to write down the carrying value of Citigate's goodwill by GBP10.8 million.
The company proposed an interim dividend of 0.5 pence, down from 1.0 pence a year before; at the time of its 2014 results the company said it has rebalanced its interim dividend.
"Our focus in the first half of 2015 has been to improve the competitiveness of all operations in the group. Every business has been reviewed to determine which businesses are delivering, or could deliver, sustainable profit growth. The impact of the restructuring actions already implemented, and the reinvestment of some of the savings, should see Huntsworth Health continue on its double-digit growth trajectory, and Grayling return to stronger profitability as it exits 2015," said Chief Executive Officer Paul Taaffe in a statement.
Shares in Huntsworth were down 6.5% at 36.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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