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
‘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
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
‘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.