16th Sep 2014 07:00
LONDON (Alliance News) - Porta Communications PLC said Tuesday that it swung to a pretax profit and revenue almost doubled in the first-half as the company benefited from acquisitions and growing maturity across its divisions.
In its interim results for the first-half to June 30 the AIM-listed international marketing and communications business said it swung to a pretax profit of GBP71,000, compared to a GBP1.6 million loss during the same period last year and from a GBP3.0 million loss in the full-year.
Revenue almost doubled during the period, coming in at GBP16.1 million, compared to GBP8.5 million in the first-half of 2013; the company reported revenue of GBP24.4 million for the full-year 2013.
"The Group continues to show rapid growth in both revenue and gross profit (fee income) reflecting the integrated product mix and the growing maturity of the start-up ventures together with the success of the expanding international capability," said Chief Executive David Wright.
Earnings before interest, taxation, depreciation and amortisation came in at GBP1.4 million, compared to GBP144,000 in the previous year. The company was particularly encouraged by the EBITDA reading after all costs as it comes at a time when the group has taken on substantial extra costs, including the new premises in London to facilitate future growth, and the need to abolish its LLP structures in the UK, because of proposed government legislation. These two costs total GBP1.5 million on an annualised basis, said Porta.
The marketing and communications company previously expected that start-up losses would be eliminated in the first-half of 2014, however its new consumer PR company, 13 Communications, and its financial and charity advertising agency, 21:12 Communications, have taken longer than anticipated to break into profits, it said. Porta now believes that both of these companies currently "lack the scale and range of expertise they require," therefore the company intends to expand the two companies, particularly by way of acquisition. Notwithstanding the above, following a number of recent new business wins, both of these companies are expected to report improved profitability in the second-half, it said.
On a divisional basis, Newgate Communications, Porta's main global public relations trading brand, has had a "very strong" first six months. In the UK, Newgate handled a number of IPO's while overseas there was growth in all our offices, particularly in Australia, which produced exceptional results.
Redleaf Polhill - of which the group acquired 51% cent in the first-half - also benefited from the strong London market, said Porta. The company plans to acquire the remaining 49% over the next three years and it is expected that it will become an increasingly significant part of the group.
Given the improvement expected on the advertising side together with continuing strong organic growth in the public relations businesses both in the UK and overseas, the board is optimistic about the Porta's future prospects. Looking ahead the company expects further growth and improvements in the second-half, with further acquisitions already in the pipeline. "Organic growth is expected to be strong in the second half while the management team are looking to build critical mass in all the operational areas by selective quality acquisitions," added Wright.
By Alice Attwood; [email protected]; @AliceAtAlliance
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