Full-year profits grow at Good Relations as parent Chime scraps standalone PR arm

Good Relations saw 2014 profits grow by "over 10 per cent" as parent company Chime targets global expansion for the agency as it announces a business restructure that will see the abolition of its standalone PR division.

Jackie Brock-Doyle: Good Relations chair has "big, bold and brave" plans for global expansion
Jackie Brock-Doyle: Good Relations chair has "big, bold and brave" plans for global expansion

The number of divisions has been reduced from five to four, with the Public Relations arm integrated into two other divisions. Good Relations has become part of the Sport and Entertainment division, which this morning announced the appointment of Zak Brown, currently CEO of Chime's new motorsport business JMI, as chief executive of the division, with Roopesh Prashar named finance director.

Other PR businesses Team Spirit and Harvard have joined the Chime Specialist Group, part of the Advertising and Marketing Services division. Profits at Team Spirit and Harvard grew 13 per cent and 18 per cent respectively in 2014.

Chime said Good Relations grew profits by over 10 per cent in 2014 "and is expected to show continuing strong growth as it increases its international expansion using the sports marketing and entertainment (CSM) international network".

It said global new business pitches using this model are already underway. Good Relations has already worked alongside CSM for events such as the Inviticus Games.

Jackie Brock-Doyle, whose job title moves from CEO of Good Relations Group to chairman of Good Relations under the restructure, told PRWeek that there are "big, bold and brave" plans to expand the UK-focused agency internationally under the CSM network.

"One of the opportunities we see is to take Good Relations global, and doing that from the CSM network is going to be quite powerful because they are in 13 countries around the world."

Operating profit in the Sports and Entertainment division grew one per cent on a like-for-like basis to £13.5m, although overall profits in the division were up 25 per cent with the addition of Good Relations. Operating profit margin in the division fell from 17.1 per cent to 16.6 per cent. Operating income was up 28 per cent at £81.2m, but was unchanged on a like-for-like basis.

The group said the three major sporting events in 2014 - the World Cup in Brazil, the Winter Olympics in Sochi, and the Commonwealth Games in Glasgow - "were successful for us".

Chime said the new Sports and Entertainment management team has begun an investment and restructuring programme "to ensure we are well placed to achieve our future growth targets and properly control and forecast the major contracts we are winning".

"We continue to operate strongly in seven of the top ten sports by value in the world and as the global sports market continues to grow, we are exploring many new opportunities, particularly in North America where Zak Brown's experience will be invaluable."

New business wins in Sports and Entertainment included International Paralympic Committee, Unilever, Ford, VW, Epson, Bose, Haas F1, Verizon IndyCar Series, Williams Martini Racing, Coca-Cola, MetLife, Infiniti, Samsung and Southeastern. The company said it is handling Land Rover’s sponsorship of the 2015 Rugby World Cup in the UK and managing 82 players from the eight top world ranked countries.

Chime’s Advertising and Marketing Services group saw operating profit grow 30 per cent, or 23 per cent on a like-for-like basis, to £12.4m. Operating income was up 12 per cent to £86.8m (like-for-like: +11 per cent).

Jo Parker, who moves from being CEO of Team Spirit to chief executive of the Chime Specialist Group, told PRWeek that Team Spirit and Harvard had a "fantastic year". New business wins in the division included BMW Motorad, Kia, World First, Royal London, ING (Australia), Qatari Diar, BILD and CBRE.

Meanwhile, Chime’s Healthcare Communications division, which includes the Open Health brand, saw operating profit rise 13 per cent to £4.3m. Operating income was up 18 per cent to £21.8m.

New business wins in the year included Astra Zeneca, Eisai, Celgene, Novartis and Janssen.

Chime said: "A year of successful consolidation of previous acquisitions with the strong focus on market access and patient data delivering both double digit income and profit growth. All Open Health communications agencies showed strong growth and we continue to invest in digital communications."

Overall, Chime said its performance in 2014 was "well ahead of 2013", with growth in operating income and profits across all four divisions.

The firm reported a 19 per cent rise in headline pre-tax profit to £30.1m in 2014, with growth of six per cent on a like-for-like basis.

Operating income grew 18 per cent to £198.9m, with like-for-like growth of six per cent. Operating profit was up 24 per cent (like-for-like: +10 per cent) to £32.2m. Total dividend grew 14 per cent to 8.4p and earnings per share were up 12 per cent to 22p.

Chime said net new business of £31 million had already been won for 2015, compared to £23 million in the same period last year.

CEO Christopher Satterthwaite said: "2014 was a year of good growth and saw the development of CSM as a global player in the sport and entertainment marketing businesses. Our communications businesses continue to grow and with the proportion of shared clients also increasing, we are sharpening our competitiveness as an international communications and sports marketing group."

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