Speaking to PRWeek following's Huntsworth full-year results on Tuesday, chief executive Paul Taaffe said: "Most of the comms agencies finished the year quite strongly, and they’re seeing a reasonable strong first half this year. Most are fairly optimistic.
"Grayling in the UK had a very strong year in 2018, as they had in 2017, and they continue to grow around the 10 per cent mark, which is commendable."
Such an uplift would put Grayling’s UK business at around the £10.5m to £11m revenue mark, based on figures in last year’s PRWeek UK Top 150 Consultancies table.
Globally, like-for-like sales at Grayling fell 7.6 per cent in 2018, although profitability improved in both the UK and US.
Huntsworth’s financial agency Citigate "also had a very strong year in 2018 from a UK perspective", Taaffe stated. Overall revenue at Citigate was "broadly flat" at £21.9m but profitability "sharply" improved by 19 per cent.
Taaffe said Citigate’s performance across Europe varied, with more positive results in Spain, France and Poland against a "fairly flat" performance in the Netherlands.
"I keep on hearing about Brexit and lots of moans. The reality is we’re seeing more pressures in continental Europe than we are in the UK," he added.
"I think it’s very specific, country by country. I don’t know the reason. I feel continental Europe is quite sluggish now compared to say the UK and the US."
He said Citigate experienced "reasonable growth" in both IPOs and transaction briefs in 2018.
"Who knows what happens in 2019, because IPOs tend to work on a cycle and Brexit certainly has reduced that. For example the Dutch market place, where Citigate has a very good office, was down in IPOs this year."
Huntsworth added a one-off reorganisation cost of £1m to its Communications division for 2018. Taaffe said this related to the "unwinding" of "unprofitable" client contracts. He told PRWeek last summer that Huntsworth had stopped working with around five per cent of clients in its Communications arm where contracts were unprofitable.
"I think we’re out of all [unprofitable client contracts] now," Taaffe said. "You wind them out over a two or three year period. You can‘t take them all out at the same time because the agency will just fall over.
"It has been interesting that we’ve been able to replace those clients with much better clients in a fairly rapid period."
Asked if the ending of onerous contracts was linked to the fact margins at Huntsworth’s consumer-focused agency Red "continued to hold at strong levels", Taaffe said: "That’s not the case. It’s just a very well run agency.
"Many consumer agencies have lower margins but that’s on them. Broadly, a good consumer agency can make equal or higher margins to any other kind of agency and there are plenty of examples on the market of well run agencies that do quite well."
Recently Huntsworth has been moving its London staff from Citigate and other agencies into Grayling’s office near Holborn and Red’s premises in Soho.
Taaffe said he expects this process to be completed by June, when Citigate’s financial and investor relations teams are to move into Grayling’s building.
Citigate’s corporate and consumer teams have already moved into Red’s office. Meanwhile, Evoke, Huntsworth’s medical marketing shop, and Apothecom, its medical strategy consultancy, are also moving to the Holborn office.
Creative Engagement Group, the company’s experiential healthcare business, is moving from Fitzrovia to Tottenham Court Road.
Taaffe said: "All our London agencies, with the exception of Red and Grayling, will have moved in this year."
He cited two reasons: having better access to each other’s teams to co-operate on work where relevant - and simply being in better surroundings.
"To be honest, the previous buildings that these agencies were in were just horrible," Taaffe said. "It’s pretty hard to either impress clients or recruit staff in those building. We just needed more contemporary buildings.
"There are some advantages to being closer with each other either to share something as mundane as meeting rooms or video facilities or studio facilities. Or, for example, Grayling has a very strong public affairs capability that Citigate financial has been able to tap into on behalf of some clients.
"You’re just seeing that natural connection among people who have known each other for a long time."
Huntsworth made three acquisitions in 2018 and Taaffe said the company has a "small capacity" to do more. "We haven’t yet found something attractive enough," he stated. "We’ve got no definite plans."