Chime expects full-year results to be below expectations

Good Relations owner Chime Communications says it expects full-year results to be "below expectations" due to delays in two major international contract negotiations.

Chime CEO Christopher Satterthwaite: Firm making good progress despite slow start
Chime CEO Christopher Satterthwaite: Firm making good progress despite slow start

Announcing a trading update this morning for the first four months of 2015, Chime said the year had "started slowly" in sports marketing, "with further delays in two major international contract negotiations".

"All other divisions are trading in line with expectations. Consequently, the full-year results will be below expectations."

However, the firm said even without any income from the delayed contracts, it anticipated double-digit operating profit growth for 2015, with the rate of growth improving in 2016 through "strong organic growth" in its Sport and Entertainment divisions.

Chime said the long-term prospects for its Sport and Entertainment arm "remain very promising" following the initial restructuring in March, which saw Good Relations PR added to the division and Zak Brown taking over as divisional CEO.

"We are expecting good growth from this division in 2015 and beyond, although the phasing of income in 2015 around major events will mean the second-half performance will be better than the first half. 

"We have confidence in our growth targets for 2016 and beyond because of the restructuring of our management, the continuing growth prospects of the sports market and our improving list of client opportunities including around the 2016 Olympic Games."

Major sporting events in which Chime is involved in 2015 include the Rugby World Cup in the UK, the European Games in Baku and the Ashes Series in England.

Chime said its Advertising and Marketing Services division, which now includes PR agencies Team Spirit and Harvard, "has continued its strong performance in 2014 into 2015 with good new business wins".

"We are continuing to look at expansion opportunities both by increasing the services we can provide to clients in the UK and expanding our international reach," the company stated.

Chime said its Healthcare Communications arm, which includes the Open Health comms agency, "has had a good start to 2015 and is expected to continue to grow".

"As in previous years, the second half of the year will be better than the first half."

Chime announced that it had increased its stake in digital research business Watermelon to more than 90 per cent. That business forms part of the Insight and Engagement division, which the firm said had "started well" in 2015, "with income ahead of last year and margin still well ahead of the marketplace".

Chime CEO Christopher Satterthwaite said: "We have had a slow start to the year owing to delays in global contract negotiations in our Sport and Entertainment division.

"However we continue to make good progress in our plan of becoming a world-leading international communications and sports marketing group."

The restructure announced in March saw the number of divisions reduced from five to four, with the Public Relations arm integrated into other divisions.

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