Holmes Report 31 Aug 2015 // 4:59AM GMT
LONDON—A continued restructuring of flagship public relations operations Grayling and Citigate and a related “goodwill impairment” of £48.8 million marked another difficult half-year for holding company Huntsworth, which saw like-for-like revenues decline by 0.7 percent.
The group reported revenue before highlighted items £83.2 million, and a constant currency revenue decline of 2.7 percent. Operating profit was £6.3 million, down from £8.9 million in the first half of last year.
According to new chief executive Paul Taaffe, “Our focus in the first half of 2015 has been to improve the competitiveness of all operations in the Group. Every business has been reviewed to determine which businesses are delivering, or could deliver, sustainable profit growth.”
Grayling has been a particular focus, with a realignment of roles across the company, affecting more than 100 positions in an effort to reduce staff costs. The firm has closed five offices, while redirecting resources to fast-growing markets in the Middle East and Africa. Overall revenues declined by 8.8 percent on a like-for-like basis to £31.7 million, with margins of just 2.3 percent.
Financial communications specialist Citigate saw revenues decline 7.2 percent on a like-for-like basis to £10 million—due to intense price competition for transaction mandates, particularly in the UK—although margins were relatively health at 14.7 percent. Consumer-focused business Red, however, saw a return to revenue growth in the first half-year of 2015, achieving a 9.7 percent increase.
Huntsworth Health was the other bright spot. First half-year 2015 revenues grew 10.3 percent on a like-for-like basis to £35.2 million, with a margin of 18.7 percent.
Says Taaffe: “The impact of the restructuring actions already implemented, and the reinvestment of some of the savings, should see Huntsworth Health continue on its double-digit growth trajectory, and Grayling return to stronger profitability as it exits 2015.”