3rd Feb 2009 07:00
3 February 2009
Tangent Communications plc ("Tangent")
Trading Update
The Board of Tangent wish to update the market on trading for the current financial year. While Tangent continues to be profitable in the second half to 28 February 2009, sales at Ravensworth, our print business for the property sector, have continued to decline. As a result profits will be below market expectations for the year ending 28 February 2009.
As we prepare for our new financial year (starting 1 March 2009) the outlook is as follows:
Tangent One, our digital agency, secured its largest ever contract in the fourth quarter of this financial year. The contract is to build five transactional websites. Business from our existing principal clients continues to grow and in the current climate we expect smaller, more cost effective agencies, such as Tangent One, to increase market share. We expect this business to grow during the new financial year.
Tangent Direct, our direct marketing business, continues to benefit from the current business climate. Tangent Direct primarily focuses on results based marketing and getting customers into local stores. Promotional activity is key to our customers as they look at new ways to get customers into stores. We continue to see marketing spend move from traditional above the line channels to below the line and more accountable ones.
Tangent On Demand is starting to generate new business from its new local surroundings (post the relocation) and we expect this to accelerate and provide revenue growth in the year ahead.
Ravensworth will experience another challenging year. We expect the first half of the financial year to February 2010 to continue to trend down against the previous year as the main impact of the decline in the property market was only felt from May 2008 onwards. However, we are starting to see gains in market share as the smaller less stable competitors are now starting to close and their clients are moving to Ravensworth. We believe though it is prudent not to forecast improvement from Ravensworth until 2010.
Tangent remains profitable and our net cash position today is £2.7m and we expect our strong cash position to be maintained during the financial year to February 2010.
The current economic environment has resulted in a significant increase in distressed sale opportunities and we continue to monitor the market place for acquisition opportunities which we believe will add value to the group.
For further information, please contact:
|
Tangent Communications plc |
020 7462 6100 |
|
Nicholas Green (Joint CEO) |
|
|
Graeme Harris (Finance Director) |
|
|
Collins Stewart |
020 7523 8350 |
|
Adian Hadden/Stewart Wallace |
About the Company:
Tangent is a leading integrator of technology and marketing strategy, delivering for its clients improved customer engagement and revenue through direct mail, web, email, mobile and print.
Tangent employs 160 people across three locations in London, Newcastle and Cheltenham and is traded on AIM (AIM: TNG). Clients include Borders Books, Citroen, Gala Coral Group, Halifax, Homeserve, The Labour Party, SAP, and Wolseley Group. For more information please visit www.tangentplc.com
Related Shares:
TNG.L