Edelman UK gross profit drops with Assembly spinout, but wage bill increases

Gross profit and staffcount in Edelman's UK office dropped slightly last year as some operations were transferred to a sister business, according to its annual results.

UK results for the year to 30 June 2017 were filed on Friday, following February's release of global results showing 2.1 per cent growth for the business as a whole, with the US outperforming.

The UK results do not include Assembly Media - a separate entity serving Microsoft and Xbox, created in the UK in April 2016 - or financial specialist Smithfield, a 2015 acquisition. As such, they are not directly comparable to the PRWeek Top 150.

UK turnover of £80.52m ($113.52m) was three per cent higher than the year before (following one per cent growth between 2015 and 2016), due to "a change in the mix of the type of business undertaken", according to the strategic report section of the results. The firm told PRWeek this was due to it undertaking more creative and production work.

Additional costs (£22.43m this year versus £19.63m the year before) were "due to expansion and taking on additional office space", the strategic report said. Gross profit was £58.09m, down from £58.51m in the year to June 2016.

Post-tax profit was £2.62m, down from £3.26m. Part of this profit drop was due to the "transfer of some business" to Assembly, which had profit after tax of £620,000 in the year, up from £317,000.


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Staff and pay

The firm's average monthly staffcount dropped from 491 to 467 over the 12 months, with the number of consultants ("professional staff") dropping 10 per cent from 421 to 379, while support staff rose.

This drop "can be attributed to the movement of staff from Edelman to Assembly Media", Edelman told PRWeek.

Meanwhile, the company's total wages and salaries bill rose, meaning the average wage rose from £57,500 to £62,300.

Competitive environment

Of 2016's Brexit vote, the report says: "The full impact of this decision on our clients and their budgets still remains unclear, however we are monitoring this risk on an ongoing basis."

Of the "business environment", the strategic report cites the PRWeek Top 150 in saying: "The public relations market in the United Kingdom is highly fragmented and competitive... within this competitive market, the company has cemented its position as the largest full-service agency, with five per cent of the total fees [£1.2bn] of the Top 150."

The report also says that charitable donations were made in the year totalling £8,219 (2016: £12,814).

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