11th Aug 2014 08:29
LONDON (Alliance News) - Public relations and healthcare communications group Huntsworth PLC Monday reported a drop in profit for the first half, as its investment programme cut into margins and took longer than expected to implement.
The company also said Lord Chadlington is to step down as Chief Executive.
Chadlington, a donor to the UK Conservative Party, said: "It has been my intention for some while to stand down and I am delighted that I will do so just as the economies of the world are turning for the better and that we have a management team which will make the most of this all-important investment plan which is now well under way."
The company, which has four main brands including Citigate Dewer Rogerson, said a professional search process has been initiated and Lord Chadlington will remain as CEO until a new appointment is made at which time he will become a group senior adviser.
London-based Huntsworth posted pretax profit of GBP6.3 million for the six months-ended June 30, down from GBP8.3 million a year earlier, as revenue fell to GBP83.6 million, from GBP88.9 million.
Huntsworth said its investment progress to build multi-office business, increase digital revenue, and accelerate revenue growth in the US, Middle East and Asia Pacific hurt its margins. However it said it expects material revenue growth in 2015.
The company said Citigate revenue fell 8%, reflecting weakness in the UK domestic merger and acquisition market, where deal levels declined.
However, it said the merger and acquisition market shows signs of improvement, and Citigate has benefited from opportunities with US-listed companies.
Grayling revenue fell 4.9%, despite a number of positive developments. Huntsworth said progress for the communications business was offset by a disappointing performances in the UK and Europe.
Revenues for the Red Consultancy fell 8.1% despite winning a number of blue-chip clients including Coca-Cola.
Financially, net debt fell to GBP35.5 million from GBP69.0 million a year earlier. Net debt at December 31 was GBP32.0 million.
"At the 2013 year end we reported that we would continue our investment programme for a second year in order to build multi-office business, to increase our digital revenues and to increase revenue growth in the USA, the Middle East and Asia Pacific, thereby reducing our high dependence on the UK and Europe," Lord Chadlington said in a statement.
"While the pace of these increases in the first half has been slower than we hoped, we are making some good progress, which we expect will continue in the second half and accelerate in 2015."
On the back of its performance, the company maintained its interim dividend of 1.0 pence.
Huntsworth shares quoted up 12% at 46.00 pence Monday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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