Comms drives 'outstanding' full-year growth at Porta

Porta Communications has reported positive underlying earnings (EBITDA) for the first time in 2014, with its PR business performing particularly strongly in a year of "outstanding growth" as fee income rose 135 per cent to £19.4m.

Porta CEO David Wright: Looking to double the size of the business
Porta CEO David Wright: Looking to double the size of the business

The company reported organic growth of 75 per cent and a "very strong" performance from its four acquisitions in the year. EBITDA was £671,363, against negative underlying earnings of £2.2m in 2013.

Revenue rose from £9.3m to £23.3m and the firm said it was looking to double in size.

The AIM-listed Porta, whose PR agencies include Newgate, Redleaf, PPS and Publicasity, said that excluding acquisitions, its client base has grown by about 140 to more than 450 in the year. Average gross profit per employee rose from £75,000 to £100,000.

Organic growth at corporate and financial agency Newgate was "well over 70 per cent", with "strong" growth in London helped by the strength of the IPO market since the start of the year. Fee income grew nearly 200 per cent in the first full year of its Australia operation, while Newgate Hong Kong and Newgate Singapore were both "profitable in very difficult markets".

Financial PR agency Redleaf Polhill, of which Porta acquired 51 per cent in the first half of 2014, has "benefited significantly from its strengthening reputation, evidenced by the number of awards that it has won during the year", Porta said. "Under its impressive management team, the agency goes from strength to strength and is expected to become increasingly important to the group's overall performance."

Consumer agency 13 Communications is now profitable, Porta said, following new client wins.

Its other consumer PR agency Publicasity, acquired at the end of 2014, has "won a number of new clients since becoming part of the group, which augurs well for 2015".

Meanwhile, PPS, another late-2014 acquisition, "is also making a major contribution to both Newgate and the group". "Ranked number one by fee income in the PRWeek Public Affairs league table, PPS has not only become a major contributor to group profits but has also materially strengthened the Newgate management structure including its accounting, marketing and HR functions."

Porta's headline EBITDA, which excludes elements such as start-up losses, acquisition and restructuring costs, grew from £738,133 to £2.2m. Based on this figure, earnings per share doubled to 1p.

CEO David Wright said: "The growing maturity of all our start-up companies, together with the success achieved by marketing Porta as a fully integrated group, has again produced outstanding growth, particularly in the communications division.

"With the exception of France and China, the group has now completed its phase of start-ups with future growth expected to be from a mixture of organic and acquisition."

He said the group’s priorities going forward would be to widen the range of services and products; improve geographical coverage; double the size of the business through organic and acquisition growth, and improve the market perception and rating of the company.

Wright added: "The performance in the first five months gives the board every confidence that all the growth trends seen in 2014 will continue."

Speaking to PRWeek in February, Wright said acquisition opportunities in the PR and marketing sectors were better than during his time at Citigate from 1988 to 2003, although he would not look to raise money for purchases until the group's share price grew.

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