SEC Newgate reports 'solid' H1 as industry 'returns to pre-COVID-19 levels'

Trading at SEC Newgate in the first half of 2021 was "significantly ahead of pre-pandemic levels", the group said today as it announced a 53 per cent rise in pre-tax profit to €2.3m in the period.

CEO Fiorenzo Tagliabue: 'All the major businesses are ahead of budget'
CEO Fiorenzo Tagliabue: 'All the major businesses are ahead of budget'

Revenue at the London-listed group SEC Newgate, formed in September 2019 from the merger of Porta and Italian group SEC, increased 15 per cent to €36.3m in H1 2021 – a period that includes three month's trading of new German subsidiary Orca Affairs.

SEC Newgate chief executive Fiorenzo Tagliabue said: "All the major businesses are ahead of budget and, in several cases, are growing significantly on a like-for-like basis compared with the H1 2020 results.

"Our performance in the first half was solid and significantly ahead of pre-pandemic levels… and our new start-ups are performing strongly. We are implementing our ambitious growth plan and our industry is quickly returning to where it was pre-pandemic. Our focus is now on building the visibility of the SEC Newgate brand globally and awareness of the fully integrated, insight-led advocacy and communications services we offer."

Regional performance

SEC Newgate UK delivered "strong financial results" in H1, said deputy chief executive Emma Kane. "Gross profits and margins continued to improve month on month and cash generation was excellent. The team focused on building its core areas of expertise with many new business wins in areas such as Green & Good, financial services, energy, tech [and] real estate, as well as a significant number of IPOs and M&A transactions."

During the period public affairs specialist Newington merged into SEC Newgate UK and the group secured a new office in London's Farringdon. It will relocate there this autumn.

SEC Newgate US "traded profitably" and "performed ahead of its gross profit and profit before tax targets for the period", Kane said. SEC Newgate Colombia almost tripled its pre-tax profit compared to last year and was above budget target.

The Italian business had a "better start" to 2021 than in the previous year, which was impacted by the pandemic, said Italy general manager Paola Ambrosino. Revenue grew 13 per cent in H1 and the firm expects growth to continue until the year end. New clients included Bayer, Total, Porsche, Nescafé, Angelini Holding and PwC.

Across the wider EMEA region, the performance was more mixed.

SEC Newgate Central Eastern Europelaunched in the first quarter – "got off to a flying start", said deputy group chief executive Tom Parker, "with a team of 20 people already in place and break-even financials putting it well ahead of forecast".

Martis in Warsaw was ahead of gross profit budget but slightly down on profit before tax. After a "disappointing" Q1 in France, "very good new business performance" in Q2 resulted in the Paris office exceeding 2020 gross profit by the end of June, although it's still behind budget. Cambre of Brussels "enjoyed strong momentum" in the first half, while trading in Germany was "stable and strong". The situations in Spain and Abu Dhabi were "more challenging".

The Asia-Pacific region (Australia, Greater China and Singapore) reported a "very strong half-year performance", said deputy group chief executive Brian Tyson, with "significantly better-than-budget results on both revenue and profit forecasts". "While the region is dealing with a renewed outbreak of the Delta strain of the COVID-19 virus, our 10 offices in the region all reported high levels of business activity."

Net debt for the group, as of 30 June 2021, was €18.9m, including €7.8m lease liabilities. That compares to €13.1m, with €7.1m lease liabilities, at the same point last year.

Activities since the period's end have included the acquisition of 70 per cent of Twister Communications Middle East, which will rebrand as SEC Newgate ME (Middle East). The group also acquired an additional 40 per cent of Kohl PR & Partners GmbH (now SEC Newgate Deutschland), giving it full ownership of the German subsidiary.

SEC Newgate, which has about 600 employees in 15 countries, aims to rebrand all its PR agencies (excluding the consumer-focused Publicasity) under the SEC Newgate name by the end of this year. The UK business was the first to do so.

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