Huntsworth, which owns Grayling, The Red Consultancy and Citigate, this week announced a 1.5 per cent rise in revenue during 2011, but saw a 28 per cent fall in pre-tax profit.
The results were impacted by the cancellation of £4m of client projects, particularly in its healthcare division.
As a result, Huntsworth embarked on a cost-cutting programme that led to restructuring costs of £2.4m.
Chadlington said the group anticipated Q1 like-for-like revenue growth of three per cent, adding: ‘The group’s new business pipeline is strong and we expect the improvement in profitability to be maintained both in the first half and for the year as a whole.’
He told PRWeek that the international market for PR had remained tough since the global economic downturn took hold in late 2008: ‘We all try to be buoyant, but the reality is that it has taken longer for PR firms to pick up than those in some other marketing disciplines.’
Chadlington noted that the industry remained ‘extremely competitive’. ‘There is a significant amount of undercutting on prices,’ he said. ‘One sees agencies taking on businesses at what must be a loss and clients are still taking a long time to make decisions.’
However, he argued that globally there were ‘strong signs the market is improving in quite a big way’.
Chadlington pointed to a ‘volume of business we haven’t seen in a long time’, primarily from clients that had previously been holding off projects and PR programmes.
Overall, the UK-listed group saw annual revenue rise to £176.3m in the year to the end of December, from £173.6m during 2010. Pre-tax profits fell to £19.1m, down from £26.7m in 2010. Net debt rose by 34 per cent to £71.1m, from £52.9m.