Inferno was established in 2003 by staff from Bite, but the decision to bring the agencies back together has been taken following a strategic review.
A joint statement from Will Whitehorn, chairman, and Tim Dyson, chief executive officer said: ‘Bringing the two agencies back together creates a very strong European management team for Bite and an enlarged agency better able to extent existing client relationships.'
The integration will result in a on-off restructuring charge of around £0.5m in the second half, primarily related to excess office space.
Releasing its interim first half results today, the firm said profits had been hit by a one-time cost associated with the deferred purchase payment of its subsidiary OutCast Communications Corp.
Profit before tax fell to £1.44m from £2m during corresponding period last year. However, taking into account the £1.84m cost associated with the OutCast acquisition, adjusted profit before tax increased 15 per cent to £3.55m from £3.08m.
Revenues increased 10 per cent to £33.5m from £30.4m.
Whitehorn said: ‘We are operating well in a challenging environment... As anticipated we did see a reduction in revenues levels in January and the group has taken resolute steps in response to these changes in its markets as demonstrated by reducing headcount and operating expenses.'
‘We remain optimistic about the medium- and long-term prospects for growth. The Group's strategy remains focused on improving margins and generating organic growth, but looking to supplement this with targeted acquisitions.'
During the year the firm acquired the remaining stake in Panther Communications Group Limited, parent of Lexis, making the agency a wholly owned subsidiary of the group.