The Top 150 PR Consultancies 2004: The SEC legacy

Willott Kingston Smith's Esther Carder once again searched Companies House for the latest information on some of the largest agencies unable to enter Top 150

The Sarbanes-Oxley Act has prevented some of the larger agencies, which are members of international groups, from submitting figures. Consequently, the tables do not provide a complete picture. For a more realistic view, a table has been put together that details the most recently available financial information for firms unable to submit figures.

The information in the table is from the latest financial statements filed at Companies House. This is more historic than that in the main Top 150 table, but it helps to give a more complete picture. Results of subsidiaries have been grouped for ease of reference, and no adjustments for inter-company trade or non-UK income have been made, as there was not sufficient information. No financial information was available for: Burson-Marsteller, Cohn & Wolfe, Grayling, Manning Selvage & Lee, and Ogilvy. All of these operate as divisions.

Comparing this year's Companies House table with last year's, it is evident that gross income has declined in all but a few cases. Also, employment costs and employee numbers have fallen as agencies have made cutbacks.

The latest financial information for the groups heading up these consultancies (obtained from their websites) gives a more up-to-date picture of what happened in 2003, and their predictions.

With regards to its 2003 figures, Havas stated that the decline in operating profit margin was mainly down to forecasting from Euro RSCG that, at a late stage in the year, turned out to be over-optimistic. Moving forward, the directors commented that the current climate is more auspicious than that in 2003.

In its fourth quarter 2003 conference call notes, Interpublic reported overall revenues up by 5.7 per cent, compared to the same quarter in 2002.

However, this figure was not split between disciplines. Elsewhere, Omnicom reported a 3.7 per cent growth in its PR revenue in 2003 compared to 2002, with PR representing 11.1 per cent of the total revenue of the group in 2003.

WPP revealed in its 2003 results that both public relations and public affairs revenue fell by 4.8 per cent compared to 2002. However, overall operating profits in this division have risen, with the operating profit margin increasing from 10.4 per cent to 12.9 per cent.

Overall, PR agencies are still facing difficult market conditions. The outlook for this year is uncertain, with the general consensus being that the market is set to improve, backed up by the fact that many agencies have revised their forecasts upwards for 2004. But it remains to be seen how quickly the PR sector will emerge from the downturn.

AGENCIES NOT INCLUDED IN TOP 150 TABLE

Group Company Year end Gross income Turnover

(pounds) (pounds)

Biss Lancaster

Euro RSCG Biss Lancaster

Euro RSCG 31/12/02 6,004,390 10,593,941

The Maitland

Consultancy1 31/12/02 7,998,505 9,137,445

CGI Brandsense 31/12/02 3,423,135 4,906,072

17,426,030 24,637,458

Brodeur

Worldwide Brodeur Worldwide1 31/12/02 3,426,369 5,359,995

Buchanan

Communications Buchanan

Communications 31/12/01 5,916,190 6,763,700

Countrywide

Porter Novelli Countrywide

Porter Novelli 31/12/02 11,256,833 15,231,523

Fodor Wyllie3 31/12/02 1,228,415 1,860,186

12,485,248 17,091,709

Financial

Dynamics Financial Dynamics1 31/12/02 20,708,000 23,972,000

Fishburn Hedges Fishburn Hedges

Boys Williams1 31/12/02 10,620,977 13,912,783

Fleishman- Fleishman-Hillard UK 31/12/02 2,737,644 5,223,646

Hillard CPR Worldwide 31/12/02 2,117,777 4,608,474

CPR UK Healthcare 31/12/02 423,857 664,617

CPR The Remedy 31/12/02 618,779 961,054

GPC Group4 31/12/02 N/A N/A

Herald

Communications 31/12/02 1,478,814 1,860,215

7,376,871 13,318,006

Golin/Harris

International Golin Harris

International 31/12/01 2,595,000 4,640,000

Ludgate

Communications1,5 31/12/01 2,673,742 3,753,144

5,268,742 8,393,144

GCI/APCO GCI London 30/9/02 7,050,066 11,552,221

GCI Financial

Group2a,6 30/9/02 1,337,935 1,565,216

GCI Healthcare2b 30/9/02 545,998 1,044,080

GCI Jane Howard2c,7 30/9/02 625,244 961,219

APCO UK 30/9/02 3,182,240 4,718,343

12,741,483 19,841,079

Hill & Knowlton Hill & Knowlton 31/12/02 21,774,000 29,631,000

Ketchum Ketchum 31/12/02 11,163,617 21,021,066

Omnicom Investments8 31/12/02 N/A N/A

11,163,617 21,021,066

TBWA UK Group TCG 31/12/02 3,975,644 6,678,704

The Shire

Health Group Shire Health Group9 31/12/02 N/A 309,800

Shire Health London 31/12/02 2,267,088 3,017,970

Shire Health

International 31/12/02 3,107,013 4,382,118

4D Communications 31/12/02 1,738,550 4,813,836

Olog-E 31/12/02 478,425 570,763

7,591,076 13,094,487

Weber Shandwick Weber Shandwick

International 31/12/01 14,255,000 22,978,000

Group Company Staff costs Employees

(pounds)

Biss Lancaster

Euro RSCG Biss Lancaster Euro RSCG 2,822,776 78

The Maitland Consultancy1 3,427,760 42

CGI Brandsense 1,960,328 43

8,210,864 163

Brodeur Worldwide Brodeur Worldwide1 2,409,298 44

Buchanan

Communications Buchanan Communications 2,307,964 33

Countrywide

Porter Novelli Countrywide Porter Novelli 7,154,367 155

Fodor Wyllie3 557,999 15

7,712,366 170

Financial Dynamics Financial Dynamics1 11,920,000 145

Fishburn Hedges Fishburn Hedges Boys

Williams1 6,283,263 97

Fleishman-Hillard Fleishman-Hillard UK 1,566,714 37

CPR Worldwide 1,316,281 37

CPR UK Healthcare 225,605 4

CPR The Remedy 200,266 4

GPC Group4 N/A N/A

Herald Communications 750,562 21

4,059,428 103

Golin/Harris

International Golin Harris International 1,438,000 43

Ludgate Communications1,5 2,470,937 43

3,908,937 86

GCI/APCO GCI London 3,970,779 111

GCI Financial Group2a,6 1,118,124 18

GCI Healthcare2b 286,428 9

GCI Jane Howard2c,7 411,569 22

APCO UK 1,819,457 40

7,606,357 200

Hill & Knowlton Hill & Knowlton 11,288,000 261

Ketchum Ketchum 6,510,284 131

Omnicom Investments8 N/A NA

6,510,284 131

TBWA UK Group TCG 1,746,449 55

The Shire

Health Group Shire Health Group9 N/A N/A

Shire Health London 2,041,046 27

Shire Health International 1,008,007 24

4D Communications 667,365 23

Olog-E 359,367 6

4,075,785 80

Weber Shandwick Weber Shandwick

International 8,789,000 211

All the figures have been obtained from the latest accounts filed at

Companies House. The staff costs are total staff costs per the accounts,

including pension and social security costs. 1 These figures include

turnover and gross income from outside the UK, which is not usually

included in the PRWeek figures. 2a Figures have been pro-rated for 12

months, actual period was 9 months. 2b Figures have been pro-rated for

12 months, actual period was 8 months. 2c Figures have been pro-rated

for 12 months, actual period was 18 months. 3 The trade and assets of

this company were transferred to Countrywide Porter Novelli on 31/12/02.

4 Holding Company, therefore no figures available. 5 On 1 January 2002,

all of the trade and some of the assets and liabilities were transferred

to Golin Harris International and Square Mile Communications. 6 This

company ceased to trade with effect from 30 April 2003. 7 On 1 October

2001, the business and assets were transferred to GCI London. The

company then ceased to trade. 8 Formerly Ketchum Group. Intermediate

holding company, therefore no figures available.

9 Holding company.

- Financial Dynamics did not enter for a second year running, owing to

the completion of an MBO to acquire the company from Cordiant Group

- The Shire Health Group's gross income dropped by more than £1m

compared to last year's Companies House figures

AGENCIES WITH NO FIGURES AVAILABLE

Group Reasons for not including figures

Burson-

Marsteller Ultimate parent company is WPP - no individual figures

available

Cohn & Wolfe Ultimate parent company is WPP - no individual figures

available

Grayling Ultimate parent company is Havas Advertising - no

individual figures available

Manning

Selvage & Lee Parent company is Publicis - no individual figures

available

Ogilvy Ultimate parent company is WPP -no individual figures

available

- Weber Shandwick's Companies House figures for 2001 are only now available for publishing - Havas directors are predicting that 2004's financial climate will continue to be more auspicious than 2003's

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