NEWS: Shandwick bullish after release of year-end results

Shandwick posted a five per cent jump in pre-tax profits to pounds 7.7 million, before exceptional items of pounds 5.2 million, in its annual results this week. Operating income for the year to 31 October rose from pounds 106.8 to pounds 108.8 million.

Shandwick posted a five per cent jump in pre-tax profits to pounds 7.7

million, before exceptional items of pounds 5.2 million, in its annual

results this week. Operating income for the year to 31 October rose from

pounds 106.8 to pounds 108.8 million.



The exceptional items relate to goodwill written off on the disposal of

non-core PR businesses - such as the Kaufman advertising agency in the

US - and a provision for further disposals.



The share price fell slightly on the news, but group chief executive

Dermot McNulty said the results proved the company was ‘back in the

normal zone’.



‘It’s a good result by any standard,’ he said. ‘But given the amount of

structural change, particularly in North America, it’s especially good.’



The UK businesses, which account for around 24 per cent of income,

showed flat revenue growth but improved profit margins - up to 19.9 per

cent - mainly as a result of streamlining operations in to key agency

brands. ‘We’ve re-organised the business the way it should be,’ said

McNulty.



Over the last year Shandwick has launched both a major worldwide

rebranding exercise, and an ambitious investment in technology. The

company also recently refinanced its debts.



McNulty cited recent major international wins, such as Digital, as a

pointer to future growth. ‘It’s a verification of our change of

strategy.



‘Clients are now far more demanding in making sure that your network

really works,’ he said.

* Shandwick has bought the public relations operation of the Testa

group, Italy’s largest advertising agency. It is the group’s first

acquisition after a long moratorium. Shandwick will pay up to pounds

400,000, provided earn-out targets are met. The deal should boost

operating income in Italy by one third.



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