10th Apr 2015 07:05
LONDON (Alliance News) - PR and communications firm Huntsworth posted a swing to a pretax loss in 2014 as a result of booking heavy impairment charges related to its declining Grayling business, and following a board shake-up has launched of a strategic and operation review.
Huntsworth proposed a final dividend of 0.75 pence, taking its total dividend for the year to 1.75 pence, down from 3.50 pence in 2013. It said that the decision to cut the dividend was to better align it with the dividend payout ratio of its peer group.
The company posted a pretax loss of GBP59.6 million, swung from a pretax profit of GBP17.1 million in 2013, as revenue reduced to GBP206.0 million from GBP209.0 million, and it booked heavy exceptional costs of GBP76.2 million, including a GBP71.5 million impairment of goodwill mostly in relation to its Grayling business.
Stripping out these exceptional costs, Huntsworth posted a decline in pretax profit to GBP16.0 million from GBP20.1 million.
Revenue in its Grayling business fell 6.3% on a like-for-like basis, as the business continued to experience challenging markets in Europe. The business has undergone some changes at the start of 2015 - with Chief Executive Pete Pedersen stepping down, and a programme started to dispose of underperforming, non-core businesses.
However, the improvement of the business will take longer than expected, Huntsworth said, which led it to recognise an impairment against the businesses goodwill of GBP65 million.
Grayling has continued to find trading conditions challenging in the first quarter of 2015, Huntsworth said, and despite the early reorganisation of its North American business has not won mandates which were expected.
In its Citigate business revenue was down 3.7% on a like-for-like basis, as strong growth in Asia Pacific was offset by declines in London and Europe.
Its Huntsworth Health business saw revenues up 8.4% like-for-like, boosted by strong growth in digital and new business wins. This business has continued to see strong growth in the first quarter of 2015, the company said.
In December last year Derek Mapp took up the position of non-executive chairman and chief operating officer and finance director Sally Withey stepped down. Paul Taaffe was appointed chief executive officer with effect from Tuesday, and Interim Chief Financial Officer Brian Porritt will remain in the role until a successor is appointed.
Taaffee has begun a strategic and operational review of the business, and the company expects to announce the outcome of this review, along with a more detailed outlook, with its interim results.
Shares in Huntsworth are trading down 20.6% at 35.75 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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