'Grown-up start-up' Good Relations Group sees 50% profit growth

Chime's public relations division has demonstrated it is on an upward track following the sale of Bell Pottinger with a 50 per cent year-on-year surge in first-half profits.

Chris Satterthwaite: Chime chief executive
Chris Satterthwaite: Chime chief executive

The division, which encompasses the Good Relations Group, showed 18 per cent like-for-like growth in operating income to £11.1m, reversing a slight drop in its full-year performance in 2012.

Operating profit surged from £1m to £1.5m, with the operating profit margin lifting from 10.2 per cent to 13.9 per cent.

Chris Satterthwaite, chief executive of Chime Communications, said: ‘The improvement in the profit margin reflects a company that’s growing and reflects services that a large part of the PR industry doesn’t have, such as a specialism in corporate responsibility.’

Adding that GRG’s tech-focused constituent Harvard PR had also registered good growth, he claimed the group’s progress validated last summer’s decision to sell 75 per cent of Bell Pottinger to its management.

The £19.6m Chime netted from the transaction has been invested primarily in acquisitions for its sports marketing business, but also in staffing up GRG, which Satterthwaite described as ‘a bit of a grown-up start-up’.

‘We have invested in public relations but it’s been more in people than in acquisitions. I think we’ve made four board-level hires in the past six months. It’s a very different company than it was a year ago.’

The appointments include those of GRG chief executive Jackie Brock-Doyle, who started work in June, and executive creative director Simon Shaw.

Satterthwaite said that overseas PR acquisitions to extend GRG’s presence beyond current offices in the UK and Germany would be on the cards but the immediate priority was to grow GRG at home.

‘We see opportunities for acquisitions in PR, but primarily in Europe for the time being,’ he said. ‘We’re concentrating on getting the model right in the UK before we export it, and international expansion is more likely in 2014 or 2015 than this year.’

Chime’s ambition is for GRG to break into the top five of PRWeek’s Top 150 PR Consultancies. It is 15th in this year’s table and the feat would require doubling its £16m fee income on current projections.

Satterthwaite, who oversees a group spanning advertising, healthcare, research and sports marketing businesses, believes brand PR is a fertile area for growth.

‘In my mind brand public relations remains a strong marketplace and there’s the growth of social media within that. Our experience is that big brands realise they need a new approach to PR based on the brand being open to all the social channels.’

Overall Chime’s pre-tax profit was up two per cent to £11.2m after a six per cent rise in operating income to £77.8m.

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