LONDON: Chime's public relations division has demonstrated it is on an upward track following the sale of Bell Pottinger with a 50% year-on-year surge in first-half profit.
The division, which encompasses the Good Relations Group, showed 18% like-for-like growth in operating income to £11.1 million, or about $17.2 million, reversing a slight drop in its full-year performance in 2012.
Operating profit surged from £1 million to £1.5 million, or about $2.3 million, with the operating profit margin lifting from 10.2% to 13.9%.
“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 specialty in corporate responsibility,” said Chris Satterthwaite, chief executive of Chime Communications.
Adding that GRG's tech-focused constituent Harvard PR had also registered growth, he said the group's progress validated last summer's decision to sell 75% of Bell Pottinger to its management.
The £19.6 million, or about $30.4 million, Chime netted from the transaction was invested primarily in acquisitions for its sports marketing business, but also in staffing GRG, which Satterthwaite described as “a bit of a grown-up startup.”
“We have invested in public relations, but it's been more in people than in acquisitions,” he said. “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 its offices in the UK and Germany would be in 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 ranked No. 15 this year, so the feat would require doubling its £16 million fee income on current projections.
Satterthwaite, who oversees a group spanning advertising, healthcare, research, and sports marketing, 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,” he said. “Our experience is that big brands realize 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 2% to £11.2 million, or about $17.4 million, after a 6% rise in operating income to £77.8 million, or about $120.7 million.
This story originally appeared on the website of PRWeek UK.