Huntsworth reports first-half revenue increase while profits fall by 20%

UK-listed marcoms group Huntsworth, which owns Grayling, Citigate and Red, saw first-half like-for-like revenues increase by 1.6%, but pre-tax profit fall by 20%.

Lord Chadlington: Huntsworth chief exec
Lord Chadlington: Huntsworth chief exec

The company saw revenue up to £88.1m during the first half of the year, compared with £87m during the same period last year. Operating profits fell to £11.5m, from £13.6m. while pre-tax profit fell to £9.6m, from £12m.  

Lord Chadlington, Huntsworth’s chief executive, said: ‘Our brand rationalisation - which is now complete - is in response to the demands of this new marketplace and we are beginning to see the benefits showing through.’  

He pointed out that global and multi-office business accounted for 46% of revenues in the first half – up from 33% in the first half two years ago.  

Adding: ‘We are confident of reaching our targeted like-for-like revenue growth rate of 7% during 2011 – significantly ahead of our historic results.’  

Grayling, which contributes 49% of group revenues, saw like-for-like revenue growth of 2.6% following its launch as a global division 18 months ago. Like-for-like revenue growth accelerated to 5.6% during the second quarter.  

Huntsworth Health also saw a small rise in like-for-like revenue, climbing 2.1%, while Red saw like-for-like revenue growth of 1.8%. The company said that Red’s like-for-like growth, excluding the loss of public sector income, was 23.9%.  

Financial PR business Citigate saw a like-for-like revenue decline of 2.5%, blamed on ‘a subdued IPO and M&A market’. Huntsworth added: ‘The public policy division has found trading challenging, as have some of our Asian offices where transaction income has decreased.’  

Geographically, UK revenue was up 0.3%, the USA up 4.8% and Eastern Europe up 13.4%. The Western European countries were down 4.7%, affected by the economic situation in the Eurozone, and the Rest of World was down 1.2%.  

In terms of outlook, the company said: ‘Subject to global economic circumstances, we expect our increasingly global and multi-office revenues to deliver a steeply rising revenue curve into 2012.’  

‘While we wait for these larger accounts to come on stream, particularly in Q4 and in 2012, it has been necessary for us to hold the resource in place to service the expected revenue increases, in turn putting short-term pressure on margins.’

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