Chime Communications to cut staff after US government account loss

Chime Communications, owner of Bell Pottinger, has been forced to cut staff and property costs after losing its lucrative work with the US government.

Lord Bell: Chime chairman
Lord Bell: Chime chairman
The listed marcoms group published an interim management statement this morning, in which Chime chairman Lord Bell acknowledged that the company had been forced to cut back.
 
He said: ‘Our main American government contract has ended earlier in 2011 than we expected. This has affected one of our public relations businesses. As a consequence of this we have moved quickly to reduce costs, mainly people and property, which has resulted in one-off restructuring costs in 2011.’
 
He added: ‘We don't yet have high visibility for 2012 but we are not forecasting any significant income from the American government in 2012.’
 
Bell Pottinger was contracted by the US State Department for a wide-ranging comms brief in Iraq during 2004.
 
The Iraq work was understood to bring in multimillion pound annual fees and underpinned Chime’s growth through the recession. It is also understood that the agency worked for the State Department in Afghanistan.
 
Overall, Bell said that Chime’s PR business ‘continued to perform well and grow’.
 
He also pledged to invest further in PR, commenting: ‘We are at that point in the cycle where we need to make some investments, particularly in public relations.’
 
However, he said that PR would start to contribute a smaller percentage of Chime’s revenues, with sports marketing a higher proportion of its business.
 
Bell said: ‘We have continued to trade well in a difficult economic environment. Our sports marketing business continues to grow both organically and through acquisition and our advertising and marketing services business continues to do very well, building on its strong creative reputation and client wins.
 
‘Our track record over the past six years has shown high organic growth year on year, but because of the weak global economy we continue to expect growth, but not at the same rate as the last few years.’

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