Huntsworth PR shops 'holding their own'; Grayling performance 'stunning'

Huntsworth's PR businesses have "broadly held their own" in the COVID-19 era, although Grayling has had a "stunning year" with revenue up 30 per cent, CEO Paul Taaffe has told PRWeek.

Paul Taaffe also said Huntsworth has seen a "definite uptick" in agencies looking to be acquired.

The update follows Friday's news that Huntsworth, which owns PR agencies Grayling, Citigate and Red, had bought the 800-strong global medical comms group Nucleus. That was Huntsworth's second acquisition since being bought by private equity firm Clayton, Dubilier & Rice (CD&R) in May.

"They [CD&R] are very positive about healthcare, they're very committed to healthcare because they see the opportunities. We've had a pretty good year this year [in the healthcare division]. We've had good growth, as have our colleagues at Grayling – Grayling's had a stunning year."

He said Huntsworth's PR businesses have "broadly held their own", with mostly flat revenue growth year on year, but Grayling up 30 per cent.

In the healthcare arm, Taaffe said its marketing business has had a "phenomenal year", with growth of more than 20 per cent. Its immersive business, however, had a "very tough" period after COVID-19 halted live events.

"It's been a mixed bag, but overall we're growing, and we're growing at a reasonable rate."

He added: "Everybody in our group is pretty bullish about next year, not withstanding COVID-19 – that's still going to be around in the next half. And the PR businesses are doing quite well right now. We're taking a lot of comfort in that."

Taaffe was circumspect on the prospect of more agency acquisitions by Huntsworth.

"You never say never. We're pretty selective. I know it might feel like we've done a lot of acquisitions, but a lot of the companies we've acquired have been quite small – Nucleus is the largest one.

"It's not like we're out there chasing anything that moves. We're after a very specific type of company that can help us either use our business or we can use their business to make us more competitive with clients."

He added: "Most of the companies that we've acquired have approached us."

Taaffe said there's been a "definitive uptick" over the past six months in companies "at least exploring the option" of being acquired by Huntsworth. He suggested COVID-19 may have been a spur as it has encouraged agency owners to look at their options.

Nucleus

Founded in 1986 and with headquarters in London, Nucleus Global has a workforce of more than 800 people in 14 offices in the US, Europe and Asia-Pacific region. Taaffe said the acquisition probably makes Huntsworth the biggest medical communications company in the world.

He said it would largely be "business as usual" for Nucleus, although Huntsworth would look at opportunities for joint working.

"There's a lot of opportunity to collaborate across the group, which is one of the reasons why this was very attractive. But we don't see real changes on people on property or anything else, really, because there's no need. They're growing at a great rate and so are we."

Unlike the situation with some other marcomms holding companies, Taaffe said he didn't expect further consolidation in Huntsworth's office set-up. He pointed out that the group had consolidated its London offices, into two 'campuses', in recent years anyway. In addition, plans to move all its New York agencies into one "mega-office" have been put on hold due to the pandemic.

"If you're growing, even if you do a lot more working from home, you're going to need that office space," he said. "Even if that office space is 50 per cent full, if you're growing at 10 or 20 per cent a year, it's going to get pretty full up anyway."

Huntsworth was listed on London Stock Exchange prior to its £524m sale to CD&R. Taaffe described the relationship with the new owner as "really encouraging".

"The difference is that when you're publicly owned you have a whole range of shareholders and they all have different objectives. Some want dividends, some want growth, some don't want risk, some want to reduce the debt, some want to increase the debt. It's very hard picking a course between those. Now we have, effectively, one owner, so it's very easy to respond.

"They are very committed to the period of growth, they really do understand our marketplace, and us, and they're very supportive.

"Broadly, it's been a very constructive relationship."


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