EDITORIAL: Annus horribilis for Bell's empire

Chime Communications' Lord Bell was startlingly honest in laying bare the full horror of the company's 2002 performance this week. Although the legal requirements for disclosure are unambiguous, use of phrases such as 'major setback' and 'very poor year' are rare in results announcements.

His frankness may well have taken by suprise a UK media more used to attacking this sector for spin and obfuscation.

However, Bell remained characteristically upbeat this week, despite group results that confirm 2002 as an annus horribilis for his empire. These results are a disaster in many ways: eight years of solid growth came to a dramatic end as revenue shrank, the margin collapsed, earnings-per-share more than halved and there was a goodwill write-off equal to 50 per cent of income.

And yet Bell insists that - with a £7m operating profit on ordinary activities and a renegotiated banking facility - the analysts who cover the stock were right to mark it as a buy in the hours following the results announcement.

Indeed, there is an argument that, because of Chime's share price collapse last year - when the breaching of its banking covenants lost shareholders 75 per cent of their investment in a day - the shares now look cheap.

But the current global economic and political uncertainty, which Chime picked up on as a factor that had exacerbated its current plight, means it is a brave agency boss who claims the market has now bottomed out.

His beleaguered shareholders will be hoping he is right to do so.

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