NEWS: Industry is out of the doldrums says PRCA

Last year saw a pattern of solid growth in fee income and profitability among UK PR consultancies, according to research from the PRCA.

Last year saw a pattern of solid growth in fee income and profitability

among UK PR consultancies, according to research from the PRCA.



The PRCA’s annual comparative survey for 1995, which draws on data from

63 of its 175 members, shows overall fee income up six per cent to

pounds 175 million and profitability rising 11.7 per cent to pounds 26.6

million.



Profitability averaged out at 15.2 per cent of fee income.



Evidence of the industry’s emergence from recession was provided by a

dramatic fall in redundancy costs among the 63 consultancies from pounds

520,000 in 1994 to pounds 123,000 last year.



At the same time recruitment costs have risen 130 per cent to pounds

855,000 and the amount spent on training grew 16 per cent to pounds

410,000.



There was a 12.9 per cent growth in annual retainers (as opposed to ad

hoc fees) to pounds 70.6 million - equating to 79.7 per cent of all

fees.



‘The figures show that the differential between annual retainers and ad

hoc has grown and I think that demonstrates, as we in the business all

know, that PR is strategic,’ said PRCA chairman Quentin Bell.



However, over-servicing of accounts - where consultancies spend more

time on a piece of business than they are paid for - remains a problem,

representing 20 per cent of fees. ‘For some reason we haven’t tackled

that one and we’ve let clients get away with it for too long,’ added

Bell.



The research also points to an increase in new business wins over the

past 10 years. The number of new clients last year, at 4,047, was up 18

per cent on the 3,426 of 1986.



Forty-six of the consultancies sampled had fee income over pounds 1

million, compared with just 20 in 1986.



* The PRCA has said it will remove members who do not register lobbying

activity with it from its business referral system. Last year this

accounted for some pounds 24 million worth of business - up from pounds

14 million in 1994. The PRCA’s register of professional parliamentary

advisers will be available from April at a cost of pounds 50.



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