Chime Communications this week admitted its PR businesses have
suffered from the economic downturn, leading to 15 per cent cutbacks in
The firm's share price fell suddenly after it released a trading
statement on Tuesday in which it said it did not expect the adverse
market conditions to improve until late 2002.
Shares were down by 7.9 per cent when the market opened on Wednesday,
before rallying later in the morning.
In order to cope with the downturn, Chime has laid off 15 per cent of
its staff this year. It said that exceptional restructuring charges
originally estimated at £2m had gone up three-fold to £6m.
The drop in PR revenue was attributed to Chime's financial PR
businesses, which include First Financial and Smithfield Financial,
which have suffered as M&A work dried up this year.
However, Chime maintained that Good Relations, another of its PR brands,
had performed well, as had Bell Pottinger Public Relations.
The statement said that Chime does not anticipate making more job cuts
'unless market conditions deteriorate further'.