EDITORIAL: Take heart from Chime interims

The first major piece of hard evidence that PR has grown more

resilient in the face of economic adversity emerged this week as Lord

Tim Bell's Chime Communications unveiled the company's interim results.

Chime appears to have protected its profit margin in a tough market,

without resorting - so far at least - to the sort of widespread

redundancies we have seen at the other major quoted holding

companies.



Although this is only one set of half-year results - and although the

double-digit leaps in income and earnings can in part be attributed to

acquisitions now being factored in to Chime's data for the first time -

it goes to show what can still be achieved, even as elsewhere in the

market less accomplished operators are shedding jobs and seeing profits

fall.



These results stand proud against the assumption that PR should be the

first casualty of budgetary realignment in tough times. It is surely no

coincidence that Chime's flagship ad agency HHCL emerges from the

announcement of results slightly more battered and bruised than the PR

businesses, Bell Pottinger Communications and the Good Relations

group.



Complacency is the enemy of progress, however, and Chime managers are

aware of the need to cut headcount across the group by up to ten per

cent.



Income of £50m for the first six months of 2001 will only be

repeated in the second six months if Chime's new business function

performs above par. And the margin - an above industry average 18 per

cent - can only be protected if there is greater focus on slimming the

cost base. In short, there are grounds for optimism, but jobs may have

to go.



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