LONDON—Huntsworth is hoping that increased investment via a new joint venture with minority owner BlueFocus will help arrest a continued decline in revenues.
The UK PR group, which owns Grayling, Citigate, Red Consultancy and Huntsworth Health, will use the joint venture to expand its network, particularly in Asia-Pacific. The deal, which sees Huntsworth take on 51% ownership of the JV, comes after China's BlueFocus bought 19.6% of Huntsworth last year.
Huntsworth's 2013 results, announced today, reveal that revenues declined 1.3% at the group, sustaining a pattern of falling revenues that has persisted since 2011. Group revenues also fell 2.5% in the first quarter of 2014.
Revenues were £171.7m in 2013; the group's largest agency Grayling declined by 6.4% to £78.5m.
BlueFocus will invest as much as £50m in the joint venture, focusing in particular on acquisitions, after spending £36.5m on its Huntsworth stake last year. BlueFocus CEO Oscar Zhao yesterday told the Holmes Report that the he views the Huntsworth investment as a means of improving perceptions of his agency.
"When we said we want to go global, nobody paid attention to us," said Zhao. "So Huntsworth is the right choice — the most important thing is through investment in Huntsworth, all of the people in the industry see BlueFocus — they know a company named BlueFocus is coming."
Zhou also noted Huntsworth CEO Lord Chadlington's "passion" for China. The two companies have signed a three-year contract with UK Trade & Investment, which aims to persuade Chinese companies to invest in the UK.
Huntsworth has also announced Lord Myners as its new chairman, replacing Richard Sharp. Another board member, Joe McHale, is stepping down, amid reports of dissatisfaction with Lord Chadlington's remuneration.
Profits at Huntsworth also fell, from £22.5m to in 2012 to £20.1m in 2013. Chadlington said that this was "in line with expectations", given the group's ongoing investment programme in digital, growth markets and multi-office accounts.
Digital revenues grew by 10% in the year and now represent 26% of group revenues. Huntsworth's Middle East and Africa operations, furthermore, increased 34% in 2013. Multi-office accounts, now 50% of group revenues, saw a 4% growth in average fee.
Among Huntsworth's other agencies, only Huntsworth Health fared particularly well, growing 7.1% to £57.1m. Red Consultancy declined by 7.2% to £12.9m but did improve profits by 19.2%. Citigate improved revenues by 1.1% to £23.3m.