Huntsworth ditches CSV in wake of strategy clash

Huntsworth has severed its ties with US financial PR firm Citigate Sard Verbinnen amid falling profits and fundamental disagreements over strategy.

The group, which gained CSV as a result of last year's acquisition of Incepta, said on Wednesday it had agreed to a three-year £11.5m management buyout of the firm following 'differences between Huntsworth and CSV executives, [founders George Sard and Paul Verbinnen] as to the company's future'.

Huntsworth also announced a dramatic fall in debts, from £80m to £23m and a halving of earnout costs to £9m. CEO Lord Chadlington said CSV would be the group's last significant sale.

He said CSV's client base was at odds with Huntsworth's model that PR companies start each financial year with 70 per cent of projected fees from annual contracts and long-term client commitments. Only 35 per cent of CSV's annual fees are contracted, often with just 30 days' notice. The firm is also dependent on the US market from which it draws 95 per cent of its business.

CSV made a pretax profit of £9.7m in the year to 28 February 2005, down from £10.8m in 2004.

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