Profits surge at Freshwater UK as revenue rises and costs decline

Freshwater UK saw pre-tax profits increase more than fourfold from £119,818 to £515,974 in the year to 31 August, as it returned to "normal levels of profitability".

Steve Howell: Performance follows several difficult years of depressed profits
Steve Howell: Performance follows several difficult years of depressed profits

The performance was due to revenue from fees and commissions growing seven per cent to £3.4m, along with a six per cent decline in costs, said CEO Steve Howell.

Operating profit also grew sharply over the 12 months, from £152,731 to £550,149, and overall turnover rose four per cent to £4.1m.

The growth in revenue has been attributed to several new business wins including the University of South Wales, the League Against Cruel Sports, Lancashire Care NHS Foundation Trust and Buckinghamshire Healthcare NHS Trust, as well as new projects from existing clients such as Thompsons Solicitors, Unite, Specsavers, BT and the Football Association of Wales.

Howell, a former BBC journalist who founded the Cardiff-based consultancy in 1997 and rebranded it 10 years ago, said: "The increase in profits is taking us back to normal levels of profitability, albeit at the upper end of the spectrum (three percentage points above the industry average of 13.3 per cent) after several difficult years of depressed profits.

"This has been achieved through a combination of a seven per cent revenue increase and a six per cent reduction in costs, mainly due to savings on office overheads, such as a full year’s benefit of using less space in our Cardiff office.

"The two together have increased our profit margin substantially."

Freshwater said that since the rebrand, annual revenue has grown by 244 per cent and staff numbers have grown from 21 to 53.

Howell said: "We have achieved our objective of creating a respected UK-wide communications consultancy while retaining our Welsh identity and continuing to be headquartered in Cardiff."

Freshwater joined the Alternative Investment Market in 2007 but delisted in 2010 because "investor sentiment had turned against small companies".

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