Arun Sudhaman 05 Apr 2012 // 9:13AM GMT
Huntsworth's 2011 results have been eagerly anticipated, ever since a profit warning sparked a sell-off of the holding group's shares towards the end of last year. The company's stock price has since recovered, but results reported by the group over recent years do not make for pretty reading. In 2009, organic revenues declined by 4.7 percent, although this was hardly surprising given recessionary conditions, and the company's reorganisation of 26 brands into the quartet that currently exist - Grayling, Citigate, Red Consultancy and Huntsworth Health. There was little improvement in 2010 despite our calculation that the global PR market grew by around eight percent during this year. Huntsworth income declined by 0.7 percent. Which brings us to 2011, for which Huntsworth yesterday reported revenue growth of two percent, alongside a 28 percent drop in profits. The company also revealed that it had set aside £1m for "on-going legal cases against former employees in respect of restriction breaches." Meanwhile, in a PRWeek interview (sub reqd), Lord Chadlington has said that the international PR market has remained tough since late 2008. It is undeniable that, for 18 months or so, the worst of the recession hit the PR industry hard. Since then, though, there has been a clear recovery. We are still crunching global earnings for 2011, but there is little to suggest that growth was any lower than our eight percent figure from 2010. If anything, it is much easier to argue that conditions in Huntsworth's "home" markets of the UK and continental Europe have been tougher than the international market in general. Results from pan-European PR networks indicate that few have been able to crack double-digit growth, although fewer still have recorded worrying declines. Those that are prospering, importantly, appear to be doing so by evolving their capabilities into such areas as digital, content creation and research. In geographic terms, the key driver remains North America, given its disproportionate share of the global PR market. The past two years has seen sustained growth in the US in particular. Asia-Pacific and Latin America have also performed well, although their impact is less material. It is perhaps instructive to picture global PR growth as two peaks, with the higher one representing North America, and a lower one indicating emerging markets in Asia-Pacific, Latin America and elsewhere. The valley in between, meanwhile, is Europe. And Europe, unfortunately, continues to account for almost two-thirds of Huntsworth income. It is also worth noting that independent firms are out-performing publicly-owned players, explaining why results at Omnicom Group's PR unit, for example, have not been stellar. Indeed, Huntsworth is not necessarily alone in this predicament, once modest returns at some of WPP's networks are factored in. A continuing strand in every Huntsworth earnings release is the insistent focus on improvements in multi-office revenues and pipeline. This is not an unworthy goal,. But until Huntsworth's efforts to fully build out geographic coverage in North America and Asia-Pacific pay off, it appears that the double-digit growth enjoyed by some of its network rivals will prove elusive.